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Asian Market Update – Monday: Coins gain on positive news from government, tech giants

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Bitcoin bull run

The Big Question: Are coins ready for another bull run?

Prices of cryptocurrencies pointed higher overnight during the Asian trading session Monday, as positive news out of Canada, Estonia and tech giants such as Google and Facebook have likely eased investors’ concerns following blows from China last week.

Before midday, the price of bitcoin climbed 3.82 percent to $3,802. Having surged from around $3,660 during early morning trading, the digital coin was still pointing higher around midday in Asia.

The ethereum price saw an even larger increase on Monday morning, gaining more than 10 percent at one point before falling back to 8.60 percent to $279. The ethereum price surged from about $256 to $283 at one point. The digital currency has now been in an uptrend for two straight days.

The gain in bitcoin and ethereum prices on Monday morning followed scores of positive news from governments in Estonia and Canada.

In Estonia, officials struck a positive tone toward initial coin offerings, the exact opposite of what we saw out of Beijing, where officials banned ICOs. The Estonian government is reportedly mulling to raise funds through ICOs.

In Canada, while warned against risks, officials generally signaled that tokens are acceptable, as they advised that those who intend to issue ICOs to reach out to local securities regulators to discuss it. Though the Canadian government did not explicitly spell out its support, the move could be seen as a way of giving a green light to ICOs.

Also, some tech giants such as Microsoft, Google, Facebook, Apple and Mozilla have reportedly developed a browser interface that accepts cryptocurrencies when making purchases online.

If the companies went ahead with the interfaces, it would expand the use of cryptocurrencies and likely drive up the demand and thus prices.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
China-Shanghai Composite Index 3,363.40 0.29%
Hong Kong –Hang Seng 28,088.85 1.01%
Australia-ASX 200 5,725.90 0.54%
South Korea-KOSPI 2,411.43 1.06%

Major Asian indexes shrugged off earlier losses and started off the week on a positive note Monday morning.

In Greater China, the Shanghai Composite Index skidded 0.29 percent to 3,363. before midday. In Hong Kong, the Hang Seng Index surged 1.01 percent to 28,088.

In South Korea, the KOSPI index gained 1.06 percent to 2,411.

Down under, the ASX 200 climbed 0.54 percent to 5,725.

In Japan, the Tokyo Stock Exchange was closed Monday for a public holiday.

The gains in Asian stocks on Monday followed a week of turmoil, as geopolitical tensions on the Korea Peninsula continued brewing, with North Korea constantly threatening war with South Korea, the US and Japan, and firing off missiles.

Though investors should be used to North Korea missile launches by now, stocks still suffer for at least a short period every time the rogue regime makes a move.

However, it seems investors are now more concerned with monetary policies. This week all eyes are on the meeting of the US Federal Open Market Committee (FOMC), as markets are looking for clues on direction of US monetary policies. The meeting will be held on Thursday.

Currencies

The Japanese yen lost 0.44 percent against the US dollar at Midday on Monday. The USD/JPY rate was at 111.18. The greenback has been in an uptrend against the yen since Friday.

The Chinese yuan strengthened 0.04 percent to 6.5474 per dollar, shooting down expectations that the yuan would decline following adjustments from China’s central bank that allows the yuan to move more freely.

The Australian dollar gained 0.24 percent on the dollar, changing hands at 1.2457 per dollar at midday.

Commodities

WTI Oil was up 0.16 percent to $49.88 per barrel.

Brent Crude gained 0.4 percent to $55.70 per barrel.

Gold was also down 0.73 percent to $1,317 an ounce.

Business News across Asia

In China, a growing number of Chinese homebuyers are rushing into some Southeast Asian countries such as Thailand and Cambodia to buy houses. Though the US and Australia remain the top two most favored places for Chinese homebuyers, tight restrictions placed on the use of foreign currencies means more investors turn to Southeast Asia, which is covered by policy supports under China’s Belt and Road initiative.

Take away: With foreign exchange restrictions most likely to remain in place for the foreseeable future, expect more investment from China in real estate and other sectors in countries along the Belt and Road routes.

In India, a visit from Japanese Prime Minister Shinzo Abe still generates much of the news headlines in India. The visit took place last week, during which India and Japan signed a slew of deals on cooperation in India’s massive infrastructure sector, including Japanese investment in railroads and other projects.

Take Away: It is rare that a trip of foreign leaders receive such massive media attention. However, the laser-like focus on Abe’s visit highlights the close ties of the two countries, with Japanese companies enthusiastically discovering great potentials in India.

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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4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Market Overview

Dow Crosses 26,000 as Trade Optimism Lifts Stocks

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U.S. stocks advanced Friday, as the major benchmarks rebounded from their worst slide in two weeks on renewed optimism over China trade talks. Bitcoin and other cryptocurrencies rebounded from a midweek slump, strengthening the case for a larger short-term rally.

Dow Returns to Strength

The Dow Jones Industrial Average smashed through 26,000 on Friday and settled close to its intraday high. The blue-chip index closed up 181.18 points, or 0.7%, at 26,031.81. Twenty-three of 30 index members finished higher, led by Pfizer Inc. (PFE) and Intel Corp (INTC).

With the gain, the Dow extended its weekly winning streak to nine weeks, the longest since 1995.

The large-cap S&P 500 Index gained 0.6% to settle at 2,792.67. Nine of 11 primary sectors contributed to the rally, with shares of information technology companies leading the charge. The sector rose 1%. Health care and communication services also outperformed the broad average.

A strong performance for tech stocks sent the Nasdaq Composite Index sharply higher. The tech-laden average rose 0.9% to 7,527.54.

Trade Optimism Lifts Markets

Stocks returned to strength Friday on reports that officials from the U.S. and China held marathon talks aimed at resolving their trade dispute. Trade representatives met in Washington for nine hours on Thursday, where they discussed a range of issues including state subsidies and illicit technology transfers.

President Donald Trump was also said to be meeting China’s top trade negotiator, Vice Premier Liu He, on Friday. No further updates have been provided.

While a trade deal between the two countries remains highly unlikely, Trump has expressed willingness to extend the negotiating window beyond the March 1 deadline. He told reporters Friday that the deadline isn’t a “magical date” but a good barometer to measure progress from both sides.

Bitcoin Up 10%

Bitcoin’s price climbed back above $4,000 Friday, as momentum swung in favor of the bulls following a minor midweek slump. The leading digital currency by market cap reached a session high of $4,074 on Bitfinex and was last spotted in $4,050 range.

Via CoinMarketCap, bitcoin’s aggregate value was a hair below $4,000 at press time, enough for a gain of 1.3%. Over the past seven days, BTC gained 10.3%.

The top-20 coins traded higher on Friday and booked solid gains for the week. EOS was the top performer, gaining 3.87% for the week. Ethereum gained 22% and bitcoin cash was 18.5% higher.

Read our Week in Review: Crypto Spring? Bitcoin on Track to Snap Six-Month Losing Streak Following Spectacular Week.

The overall cryptocurrency market capitalization improved to $135.3 billion, having gained $15 billion over the past seven days. Trade volumes are down sharply from their early-week highs but are still well above the yearly average.

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Market Overview

MindChain Conference: ‘Blockchain Isn’t Our Saviour’; Romania’s Growth Says Different

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Blockchain was picked apart at the MindChain conference this week, where one prominent commentator said blockchain won’t make the world a better place, and that it won’t be our saviour.

Blockchain Won’t Make the World a Better Place

One of Forbes’ ‘30 Influential Europeans Under 30’, Cornel Amariei took aim at blockchain, which he said was a buzzword, and that there weren’t too many places it could be applied:

“I hate buzzwords because they give a false impression about what is happening. Blockchain is a buzzword – I’m not a big fan, and I’m not against it either – but it’s nothing more than an encryption and decentralization technology – there aren’t that many areas where it can really be applied well.”

The 22 year old inventor and author suggested blockchain’s reach will be more limited than most in the crypto space would like to believe. He said:

Blockchain will solve a lot of issues, but it won’t really make the world a better place. It’s not our saviour.

Romania: Blockchain and Crypto Tech Hub

Held by Business Review, the conference comes from Romania – the latest addition to the European Union having joined in 2007. Romania’s economy has grown at twice or even three times the rate of its larger EU neighbours in recent years. Its approach to tech innovation is a big reason why.

Sixteen blockchain and cryptocurrency startups have launched in Romania in the past year, while Google, Facebook, Amazon and Microsoft all have offices scattered around its major cities.

Those startups include a blockchain-based energy supplier, an augmented reality (AR) project, and many more, including the recently covered Ark (ARK).

Romania’s new role as a tech hotspot can largely be attributed to its encouraging tax policies – the country’s corporations are taxed at 16%, hence the arrival of Google, Amazon, et al. Meanwhile, low income earners only have 10% of their earnings taxed.

If that sounds good get this: if you work in the IT industry your income doesn’t get taxed at all. Same goes for R&D workers and those involved in technological development. (Side note: construction workers are also exempt from income tax).

Breakdown of Romania’s tax exemption policies – designed to encourage growth and worker participation.

New Transylvanian Silicon Valley

It’s thanks to policies like these that Romania recorded 5.7% growth year-on-year leading into 2017 – the fastest rate of growth in the European Union. Romania’s tech growth has been such that it has drawn comparisons with Berlin; while Techcrunch once referred to the nation as the ‘Silicon Valley of Transylvania’.

Blockchain is currently benefiting from this new wave of Romanian innovation and optimism. Sixteen crypto startups from a population of just 19 million – all within the past year or so – must be one of the strongest ratios in existence right now.

It’s true that blockchain didn’t have much of a hand in Romania’s glowing recent past, but it may yet have a big role to play in its future.

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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4.5 stars on average, based on 147 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Market Overview

How to Escape Inflation

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Hi Everyone,

After years of economic crisis and hyperinflation, it seems that Zimbabwe may finally be taking their first steps toward stabilization.

For more than a decade the African nation has been relying on a multi-currency system that relies heavily on the US Dollar. However, in a country of 16 million people, there aren’t always enough dollar bills to go around. Talk about a liquidity issue.

So most Zimbabweans receive their monthly paycheck by electronic transfer to their bank account, which they then need to figure out how to spend in the grocery store.

In 2016 the government issued a new currency called a bond note, the exchange rate of which has been controlled by the government. In a recent update, the Reserve Bank of Zimbabwe has ditched capital controls and is now allowing bond notes to trade according to the free market.

In a country that has full mobile penetration, it’s really a wonder to me how cryptocurrencies are not playing a larger role.

Hint hint, wink wink, to Dash, Bitcoin Cash, and Litecoin.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • US-China trade deadline: 7 days | Days to Brexit: 35
  • Crypto Changing Landscape
  • Ethereum’s Rate of Inflation

Please note: All data, figures & graphs are valid as of February 22nd. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks pulled back a bit yesterday but this morning investors are looking to reverse the losses. We’ve been counting down on geopolitical timers for so long that many market participants are already dreaming of a day when those counters get to zero and all is resolved.

The tricky one remains Brexit. At this point, analysts have identified three possible yet unlikely outcomes.

1. No deal Brexit
2. Theresa May’s deal, or some variation
3. A time extension

Each of the above seems to be extremely unlikely yet we know that one of them has to happen. Should option one materialize, it’s very likely that the British Pound will fall, and in the event of option two, the Pound should rise.

The Pound has been falling pretty steadily since May. Here we can see the GBPJPY kissing her 200-day moving average (blue line).

Also, the New York session today should be really interesting as we’ll hear from a slew of central bankers including Mario Draghi and no less than four Fed members as well as receiving a monetary policy report from the Fed.

Remember, these are the guys who drive the markets. So it pays to pay attention.

SEC Watchers

Just as traders in traditional markets watch the Fed, cryptotraders seem to be forming a habit of watching the SEC.

Today, we got some pretty astonishing news that an ICO called Gladius Network LLC received a pass from the SEC despite them selling $12.7 million worth of unregistered securities tokens. This is quite a different outcome than the SEC took with Paragon and Airfox just three months ago, who each needed to pay a fine of a quarter million dollars.

While the SEC is the most important regulatory body in the United States when it comes to securities, other regulators may be influencing policy as well. Our US Managing Director Guy Hirsch wrote me this morning…

How about the Crypto Rally?

Well, excitement is still high but seems to be fading. Volumes did peak out at $35 billion during the full moon on Tuesday, February 19th. Today we’re down to $23 billion traded across global crypto exchanges.

Some have pointed to the volumes on Wall Street’s bitcoin futures, provided by the CME group, which reached a new record high of 18,338 contracts during Tuesday’s madness. That comes out to a total volume of approximately $357 million, or approximately 1% of the amount traded on exchanges.

Also, the major price surge actually happened on Monday, when the CME was closed for President’s day. So, it’s clear that Wall Street is the passenger here and not driving.

So, to find out whether this rally is about to continue or claw back we need to look at the root. As we’ve been discussing, this entire rally seems to have been caused by a shortage in the supply of new Ethereum.

Historically, the Ethereum network produces about 20,000 to 30,000 new ETH per day. However, since the beginning of the year the amounts have been tapering off and as of last week, the new supply was more like 13,000 per day.

The Constantinople upgrade which is currently scheduled for block height 7,280,000 (approximately February 27th), is supposed to stabilize supply to about 5,700 blocks per day and reduce the block reward from 3 ETH to 2 ETH per block. So, by these metrics, we can deduce that new production after the fork will be about 11,400. Far less than the current rate mentioned above.

Now, another part of Constantinople is that it’s supposed to reduce the amount of gas needed per transaction. However, it’s not apparent how the new gas fee structure will affect demand.

So even though we know supply will be reduced drastically, we don’t know if this will affect bottom line inflation because we don’t know exactly what demand will look like under the new system.

Clearly, forward guidance on monetary policy is not the largest concern for Ethereum’s community leaders.

As far as the rest of the crypto market, this recent rally certainly has the big fish nibbling. We’ve been in the accumulation zone for a while now and this latest push off the floor might just be enough to bring the market out of a slump, but there are several technical levels that need to be broken before that happens.

Wishing you an awesome weekend!

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreen

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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4.6 stars on average, based on 152 rated postsSenior Market Analyst at Etoro.com.




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