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Asian Market Update – Monday: Bitcoin surges after futures debut; Asian stocks higher on improved sentiment

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Bitcoin futures

The Big Question: How will futures trading affect bitcoin?

Bitcoin posted a huge surge on Monday morning in Asia, after futures contracts began trading on the CBOE Futures Exchange in Chicago on Sunday evening US time.

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On Coinbase, the price of bitcoin gained more than $2,000 in a strong upswing to close to $16,800 before falling back slightly. At midday in Hong Kong, the cryptocurrency was still up about 9 percent to 16,670 in very active trading.

On CBOE, the front-month bitcoin futures contract surged past $17,000 on Monday morning Asian time, according to Reuters.

The debut of bitcoin futures on the CBOE Exchange marks a key step for bitcoin towards adoption in mainstream finance that could boost its legitimacy and acceptance. However, some are worried that serious fluctuations could follow now that the big boys are in on the bet.

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Meanwhile, ethereum was trending up nicely during the Asian trading session on Monday. The cryptocurrency gained 3.89 percent at midday to $464 after losing about $23 in overnight trading.

Litecoin surged nearly 5 percent to $158 at midday, after losing about $9 on Sunday.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,871 0.26%
China-Shanghai Composite Index 3,303 0.40%
Hong Kong –Hang Seng 28,784 0.50%
South Korea-KOSPI 2,466 0.12%
Australia-ASX 200 5,999 0.08%
S&P 500 E-Mini Futures 2,656 0.08%

Major Asian equities were pointing higher in somewhat subdued trading on Monday morning, led by gains in Hong Kong and on the Chinese mainland.

In Hong Kong, the Hang Seng Index edged up 0.50 percent to 28,784 at midday after opening flat. On the Chinese mainland, the Shanghai Composite Index also moved up 0.40 percent to 3,303.

Both Hong Kong and mainland markets have had a couple weeks of increased volatility and lower prices following tighter regulations from mainland officials. Still, recent data for foreign trade, consumer inflation, foreign investments, etc. suggested that the Chinese economy remains stable and sound, which could boost business sentiment.

Markets in Japan also moved up, though only slightly. The Nikkei 225 Index gained 0.26 percent to 22,871 before midday on Monday.

In South Korea, the Kospi was 0.12 percent higher to 2,466 at midday.

Down under, the ASX 200 was up a slight 0.08 percent to 5,999 at midday.

The S&P 500 E-Mini Futures was up 0.08 percent to 2,656.

Investors’ risk appetite appears to be improved by positive economic data out of China, Japan and other key economies, an agreement between US political parties that avoided a government shutdown, and progress in tax reform negotiations in the US, among other things.

Important events that the market is watching this week include meetings of the US Fed and the ECB, Brexit talks, NAFTA negotiations, and the first week of bitcoin futures trading.

Currencies

The Japanese yen lost 0.12 percent against the US dollar at midday Monday, changing hands at 113.58 per dollar.

The Chinese yuan firmed 0.06 percent against the US dollar to 6.6155 per dollar.

The Australian dollar added 0.17 percent on the dollar, changing hands at 1.3290 per dollar at midday.

Commodities

WTI Oil was down 0.4 percent to $57.07 per barrel.

Brent Crude was off 0.35 percent to $63.09 per barrel.

Gold was up 0.04 percent to $1,248 an ounce.

News across Asia

In China, Monday marks the 16th anniversary of the country joining the World Trade Organization, which opened the Chinese market to foreign goods and services as well as foreign markets to China. However, China has now filed a suit against the EU and the US for not granting China status as a ”market economy.”

Take away: China has pledged more market access for foreign companies, but the EU and the US are hardly satisfied. The WTO is now hearing the case filed by China, and its decision could have long-last implications for global trade.

In Japan, large Japanese manufacturing companies’ sentiment about economic conditions has improved in the fourth quarter of the year, the official Business Survey Index out on Monday showed. The BSI for large manufacturers came in at 9.7, up from 9.4 in the previous quarter.

Take away: Japanese manufacturing companies have taken a heavy hit after a series of data cheating scandals, but the latest data showed economic growth is robust, and largely held up by demand from overseas.

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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2 Comments

2 Comments

  1. sorinmax

    December 11, 2017 at 10:42 am

    “The Big Question: How the will futures trading affect bitcoin?”
    or maybe it’s the other way around, like
    How will the futures trading

    • Fredrik Vold

      December 11, 2017 at 12:35 pm

      Updated. Thanks for pointing that out!

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Market Overview

Crypto Proxy Stocks Follow Market Lower on ‘Bloody Tuesday’

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“Bloody Tuesday” wasn’t just limited to cryptocurrencies, but stocks with direct and indirect exposure to the digital asset class. These once celebrated companies posted sharp losses on Tuesday alongside the world’s biggest cryptocurrencies.

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The Decline of Crypto Proxy Stocks

In terms of losses, shares of Riot Blockchain Inc. (RIOT) were among the hardest hit. The firm plunged 16.5% to $18.28, the lowest since early December. Riot  is the first pure play blockchain company to be listed on the Nasdaq.

LongFin Corp (LFIN), a U.S.-based alternative finance company, shed 8.5% to close at $39.96.

Meanwhile, tZero parent Overstock.com (OSTK) plunged 11% to $70.25 for its lowest settlement in nearly a month.

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Other crypto proxy stocks to fall on Tuesday included chipmaker Nvidia Corp (NVDA), Canada-based Hive Blockchain Technologies Ltd. (HIVE) and Eastman Kodak Co. (KODK), the imaging company that has its eye on the mining enterprise.

These companies are no stronger to crypto-related volatility, having routinely been dragged around by the performance of bitcoin. Losses for these stocks were practically inevitable on Tuesday as the global cryptocurrency market declined by as much as $190 billion.

Virtually every cryptocurrency in the top 100 was down on rumblings that South Korea was considering extreme measures to eliminate speculation from the cryptocurrency market. At the time of writing, authorities were still weighing proposals to rein in speculation on domestic exchanges. Seoul announced Monday it would decide on a next course of action after “sufficient consultation and coordination of opinions.”

The Future of Crypto Stocks

Although it’s difficult to project where the crypto equity class is headed, it’s important to distinguish established technology companies from those looking to pivot into digital currency for some publicity. The likes of Overstock.com and Nividia are certainly some of the more promising businesses to venture into cryptocurrency. However, the lesser-known players will still be snatched up by investors given the relative dearth of traditional assets tied to cryptocurrency.

That being said, institutional investors are starting to get a taste of cryptocurrency. Last month, bitcoin futures hit the market, joining a small list of traditional assets with direct exposure to the crypto market. In addition to futures contracts, Grayscale operates the Bitcoin Investment Trust (GBTC), which recently launched a 91-for-1 stock split. This means that each investor in the fund will get an additional 91 shares for every one share they own.

GBTC also declined sharply on Tuesday, with the market price per share falling 11.8% to $1,731.50. The fund could be vulnerable to bigger declines on Wednesday as bitcoin prices continue drifting lower. The world’s biggest cryptocurrency touched a session low of $10,047.06 on Tuesday, its lowest since early October.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Market Overview

I Have a Dream Today: HK, Oil & Gold Up, ETC and Ethereum

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Today we celebrate the birthday of a true American hero. One who fought for freedom for all in a country that promised the world and delivered nothing.

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“In a sense, we have come to our nation’s capital to cash a check.”

King said in his famous speech, referring directly to the promise of freedom on which the United States was founded but “it is obvious today that America has defaulted on this promissory note…”

Indeed, the United States seems to enjoy writing checks that it cannot cash. Still, Martin Luther King Jr. was quite optimistic. He believed that his people need only demand payment on that check for its promises of freedom to be redeemed.

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By now many of Dr. King’s initial demands have been met but the fight has evolved. Victims of inequality are not necessarily defined by the color of their skin, nor do they reside solely within the borders of the United States.

We must press on in his symbolic shadow and demand freedom for everyone throughout this entire planet that we all call home.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Record Run in HK
  • Oil & Gold up on Weaker USD
  • Crypto Atmosphere

Please note: All data, figures & graphs are valid as of January 15th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The Asian markets have put on a fantastic show so far today. The China A50 index has now surpassed it’s highs from April of 2015 and is now the highest it’s been since 2008.

The gains in China were propelled further by what’s happening in Hong Kong. The founder and CEO of Alibaba, Jack Ma announced that he is considering listing Alibaba shares on the Hang Seng.

Alibaba’s shares in the US currently hold a record for most stocks sales in an IPO and the company’s daily turnover is about 30% of the entire Hong Kong Stock Exchange.

Furthermore, there are rumors that a subsidiary of the Chinese Insurance giant Ping An will be looking to raise $60 Billion from the Hong Kong market in April.

Money comes to money, and as we’ve seen so many times in the crypto market. More activity on an exchange means that everything listed on that exchange can see a boost.

Sinking Buck

The second strongest trend of 2017 was the declining US Dollar. The Dollar Index went from a high of about 103.50 in January to a low of 91.4 in December.

2018 hasn’t been great for the buck either and it’s gotten off to a rather rotten start.

Along with the weakening Dollar comes a strength in commodities. Gold and Oil are priced in USD so they have a very strong reverse corolation.

As we can see here, since Thursday morning the USD has declined 1.8% and Gold has climbed by the same amount.

Though Oil has been a lot more volatile than gold or the buck, it’s strength lately has been astounding. This strong breakout above $60 was certainly unexpected by many…

Don’t get me wrong, oil rising against a weaker Dollar is understandable, but oil rising against more production in the United States is baffeling.

Friday’s Baker Hughes report shows that 280 new rigs came online in the United States over the last year.

Very likely we could see those rigs really get going now that they can get $60+ a barrel for their output.

Crypto Market

It’s easy to make money when everything is rising but when thing get choppy like they are now it can start to get a bit frustrating, especially for beginning traders.

Over the last few weeks, we’ve seen a general pumping pattern where one specific crypto will dominate the market for a few days before flatlining or even pulling back.

Over the weekend, this momentum has been on Ethereum Classic, which went from $31 to $46 in about 60 hours but now may have lost the propulsion.

Ether Classic (ETC) is the hardest crypto for me to explain simply because I don’t see it as useful. It’s not a great store of value and is not meant to be a medium of exchange. So I’m scratching my head trying to figure out why crypto traders latched onto this one.

Of course, if we zoom out a bit we can see the incredible gains of ETC’s younger sister ETH. A platform that has hundreds of projects being built on top of it and currently processes more transactions than any other blockchain.

The present rise in ETC might just indicate that alternative investors are looking for a bit more risk at the moment, and if that’s the case we may see some of the altcoins or even the exotic cryptos gaining a bit. In the chart above we can spot a nice rising trendline (yellow) but if that fails to hold we should have a nice support level just below $900 a token.

Remember: Several of the traditional markets will be closed tonight for the holiday in the USA. Crypto trades 24/7. This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro. Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Market Overview

Asian Market Update – Monday: Asian stocks hits all-time high; cryptocurrencies decline

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punching

Slow morning for cryptocurrencies

The top cryptocurrencies, including bitcoin, ethereum, bitcoin cash, and ripple, all traded slightly lower on the first day of the week, with no significant news coming out to guide the markets.

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Bitcoin was nearly flat at midday in Asian trading; remaining below the $14,000 line that it has been hovering around in recent days.

On the positive side for bitcoin, US-based Kraken Exchange is back up after a system upgrade that was supposed to take only two hours instead lasted for two days.

Ethereum was also down as of midday in Asian trading on Monday, though much of the losses from yesterday were quickly recovered. In terms of technicals, the strong surge in ethereum that started on New Year’s Eve is still intact, as the price continues to form higher lows and higher highs, which is the typical wave-pattern we are looking for in good trends.

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As of midday in Asia, the price of ethereum is still below the $1,400 level. A break above the previous high of $1,420 would indicate a signal a new immediate surge in price.

Ripple XRP, the number three cryptocurrency in terms of market cap, continued to consolidate Monday morning, remaining below the $2 line for the second day. Since reaching its all-time high on January 4, ripple has now corrected by more than 40 percent to its current level.

Main Market Movers – Midday Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 23,715 0.26%
China-Shanghai Composite Index 3,419 -0.28%
Hong Kong – Hang Seng 31,582 0.54%
South Korea-KOSPI 2,505 0.33%
Australia-ASX 200 6,077 0.12%
S&P 500 E-Mini Futures 2,794 0.17%

Asian stocks reached for new all-time highs on Monday, as the US dollar continued to weaken, boosting both commodity prices and US export-driven industries. The MSCI index tracking shares in the Asia-Pacific region (excluding Japan) finally reached a new all-time high on Monday, as it caught up with its previous high from 2007.

The US stock market has also continued to make fresh gains with the S&P E-mini future rising once again. The uptrend in the S&P 500 has accelerated in a strong way since the beginning of the New Year, proving many bears wrong.

Currencies

The Japanese yen gained 0.14 percent against the US dollar as Tokyo trading ended on Thursday, changing hands at 110.88 per dollar.

The Chinese yuan gained 0.39 percent against the US dollar, trading at 6.438 per dollar.

The Australian dollar added 0.4 percent on the US dollar, changing hands at 1.2585 per US dollar as the Australian trading day was ending.

Commodities

WTI Oil consolidated slightly Monday morning despite the weakening dollar, trading down by 0.08 percent to $64.32.

Brent Crude Oil was flat for the day, trading at $69.80

Gold continued to rise as the dollar declined, adding 0.26 percent to $1,342.

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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