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Asian Market Update – Wednesday: Bitcoin Remains Stable after Big Jump the Previous Day over North Korea Missile Test

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The Big Question: Are we approaching the end of the bull run?

Bitcoin prices remained stable overnight during the Asian trading session, after the cryptocurrency saw one of the biggest jumps in weeks, as investors appears to have been spooked by the latest North Korea missile test and turn to bitcoin.

The digital currency was changing hands at around $4,600, up about 0.5 percent overnight, with the lowest prices at $4,580 and the highest at $4,613.

The stable performance on Wednesday followed a huge surge in the previous day, when the price of bitcoin jumped from about $4,347 to as high as about $4,610, a new all-time-high.

Ethereum also maintained stability overnight, trading between $370 and $374. Ethereum also saw a huge jump in the previous day, when the price climbed from around $340 to a peach at $375. That’s the highest level in over two months since the digital currency’s price jumped to an all-time high of $410 in mid-June.

The bull run for digital currencies on Tuesday followed losses in global equity markets, especially in Asia, after the rogue government in North Korea fired away another mid-range ballistic missile, which flew over Japan’s territory.

The gains also brushed off recent regulatory tightening signals in Russia. In Russia, the local regulator said bitcoin should be limited to qualified investors and not the mass population.

The rally came even as the head of the Bitcoin Foundation cautioned investors not to invest more than they can afford and warned against risks from unsophisticated investors. But investors appeared to be more comfortable with the digital currency as equities rattled.

Financial research firm Autonomous Next has reportedly identified more than 50 crypto-related funds, indicating rising interest in the digital currency from institutional investors.

As the bull run seems to gain fresh momentum, the question is whether we are getting close to a temporary top in the bitcoin market? Goldman Sachs predicts $4800 could be the top of this run.

Main Indexes – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei Stock Average 225 19,473.43 0.57%
China-Shanghai Composite Index 3,364.32 -0.03%
Australia-ASX 200 5,658.00 -0.19%
Hong Kong-Hang Seng 27,979.55 0.77%
South Korea- KOSPI 2,366.27 0.06%

Most major Asian equities bounced back on Wednesday, shaking off losses from sell-offs in the previous day, when they stumbled over North Korea’s latest missile test.

On Wednesday, The South Korean stock market, which took a hit on Tuesday, edged up before midday. The benchmark KOSPI was up 0.06 percent to 2366.27 before midday.

In Japan, the Nikkei 225 added 0.57 percent to 19,473.43.

Hong Kong’ Hang Seng index gained 0.77 percent to 27,979.55.

However, down under, the ASX 200 dropped 0.19 percent to 5658.00.

In China, the Shanghai Composite Index dropped a slight 0.03 percent to 3,364.32.

The rebound in the Asian market followed calmer response from the UN over North Korea’s latest missile test, which the Japanese government called an “unprecedented and grave threat.”

US President Donald Trump who has previously threatened “fire and fury” remained silent on Tuesday, as he is presumably busy dealing with the consequences of the historic hurricane Harvey in Texas.

The United Nations “only” condemned the test but did not mention of any new sanctions or other tougher responses.

Asian stock markets also appear to have been boosted by a consumer confidence report from the US, which said consumer confidence is at the second-highest level since the year 2000.

Market-sensitive news to watch this week: 1. Impact of Hurricane Harvey off the US Gulf Coast, though so far the impact on markets appear to be limited; 2. Economic data from Japan, the US, Hong Kong and Australia later in the week; 3. NAFTA talks; 4. UK’s Brexit talks with the EU; 5. talks of tax reform in the US.

Currencies

The Japanese yen gained 0.04 percent against the US dollar at Midday. The USD/JPY rate was at 109.68.

The Chinese yuan strengthened 0.19 percent against the greenback, trading at 6.5816 per dollar. The yuan continues to break new highs as the dollar is plummeting, possibly providing trend traders with some golden opportunities for buying dips in CNYUSD.

The Australian dollar gained 0.54 percent against the US dollar. The Australian dollar was trading at 1.2509 per dollar before midday.

Commodities

WTI Oil was down 0.04 percent, trading at $46.27 per barrel.

Brent Crude gained 0.31 percent to $51.78 per barrel.

Gold gained 0.24 percent to $1,311.76 per ounce.

Business News across Asia

In China, State-owned China Aerospace Science and Industry Corp announced that it has started a research and development project for building a “high-speed flying train.” The train could travel as fast as 1,000 km/h and the company would go even further to explore higher speeds of 2,000 km/h and 4,000 km/h trains.

In Japan, news still focused on the North Korean missile test. The Japanese government said the missile, which flew over one of its northern islands, is a direct challenge to Japan’s sovereignty. Though the US and UN responded relatively calm, Japanese government officials are mulling other responses.

Take Away: Japan is in talks with South Korea, as both view North Korea as a direct threat to their national security. They might pressure the US to formulate a tougher response, but as evidenced on Tuesday, tougher sanctions haven’t deterred North Korea so far.

In India, the financial capital of Mumbai has been hit by the worst monsoon rain in years. Pictures online show the city being flooded and people are lining up to be evacuated from their homes. Public transport and other services have been shut down, according to media reports.

Take Away: The rain could impact India’s financial sector. However, the Mumbai exchange remained open on Wednesday, with the Sensex up 0.74 percent in early morning 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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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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Analysis

ETFs: What Is The SEC  Really Thinking?

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As a veteran Wall Street type, I was not surprised at Thursday’s SEC announcement on the VanEck-SolidX Bitcoin ETF.  Once again they gave a “no decision”. This pushes the deadline back to December 29, 2018. Don’t be surprised if New Year’s Eve comes and goes and nothing happens before the SEC is forced into a action by the end of February.

Back in August, when the first delay was announced, crypto investors’ reaction was swift and painful.  On Thursday, after a temporary hiccup, prices took a surprisingly positive turn. If we are to believe for just a moment that crypto prices act rationally (or just occasionally) then comes two obvious questions, are crypto ETFs good or bad? Secondly why can’t the SEC come up with an answer?

Never Say Yes

Let’s start with the easy question first: what’s up with the SEC?  Having dealt with this teflon organization for over 30 years, their actions with regard to VanEck-SolidX are the same pattern they have followed forever.  Practically never do they approve anything. Instead they provide two choices: reject or delay. By delaying the VanEck-SolidX application they are accepting the ETF concept in principle but laying out objections that must be corrected.

The result of this regulatory song and dance, don’t expect a decision until the last minute. The reason is that the main issues are not likely to be resolved in time. In fact, I doubt that the ETF proposal gets approval for perhaps as much as another year.  Here is why.

SEC Speak: Obfuscation

According to Jake Chervinsky, attorney for VanEck, the SEC asks “18 multiple part questions covering seven pages.” He adds: “It’s not encouraging to see the SEC ask if the bitcoin futures markets are “of significant size” despite having already concluded last month that they’re not.”

This is a tactic in obfuscation that the SEC loves when an applicant has not provided an adequate response.  In this case there is no objective answer to how liquid a market must be to meet the measure of significance.  Moreover, there is little or nothing that can be done in the short run to create greater liquidity.

The SEC is a political body as much as any agency of the Federal Government.  In raising the issue of liquidity, they can stand behind their role of protecting the public without at the same time hindering public access to a class of assets, even at current depressed levels, is worth $200 billion, more or less.

The SEC Is Right With Their Delays

Does the crypto world really benefit, as this stage of its evolution, by fostering a group of ETFs?  The argument in favor says that this is the way to simply and safely offer the individual investor a way to participate in a diversified portfolio of crypto.  That sounds noble – or is it just something that makes lots of money for those who create them?

But so far, at least from the viewpoint of the SEC, ETF applicants have not created a more secure domain.  More importantly, even if this were not the case, what does the investor gain from investing in a diversified list of crypto when Bitcoin overshadows about every other altcoin?

With nothing against those that believe in the benefits of ETFs, the benefits in current terms is far better for the ETF sponsor that it is for the investor.

Looking just at the math, an individual investor could be just as well off buying Bitcoin, Bitcoin Cash, Ripple, Ethereum and EOS. Admittedly, it is somewhat more complicated finding a place to buy and store Ripple, but with this small portfolio, you cover 75% of the entire crypto asset class. If security is an issue simply go to  blockgeeks.com/cryptocurrency-safe/ and select from a list of hardware wallets.

So whether the SEC gives their approval of VanEck-SolidX in December or February might make a difference if this were 2020 or sometime thereafter.  As for now, it really isn’t critical to the mass acceptance of crypto.

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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4.4 stars on average, based on 105 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Bitcoin

Bitcoin Shrugs Off SEC’s Delay of VanEck/SolidX ETF

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The U.S. Securities and Exchange Commission (SEC) has issued an order to launch proceedings on whether or not to approve the widely anticipated VanEck/SolidX bitcoin ETF on the CBOE. The announcement comes just days before what was supposed to be a Sept. 30 deadline for the Wall Street regulator to make a call on a proposed rule change that would clear the way for the product, a date that was also postponed. The market seems to be getting used to it with traders shrugging off the latest delay.

Shortly after the SEC updated its progress, the bitcoin price dipped modestly. But since then, top cryptocurrencies are higher in unison on something that has been missing in past rallies – robust volume. In the last 24 hours, bitcoin’s volume is at nearly $5.6 billion while No. 2 crypto Ethereum is trading on volume of $2.2 billion.

Source: TradingView

ETF Comments

Some 1,400 comment letters surrounding the passive investment product have poured into the SEC’s office. Rather than make a decision based on those, the regulator is seeking more context:

“[The] Commission seeks and encourages interested persons to provide comments on the proposed rule change,” according to the SEC document.

Chief among the regulator’s concerns is manipulation of the bitcoin price, which the CBOE believes it has mechanisms in place to reduce the potential for. If the bitcoin ETF were to launch on the CBOE, the exchange anticipates that it will bolster both the liquidity and transparency of the bitcoin market as hedge funds and other big investors jump in.

Michael Novogratz, a former hedge fund trader who is now running Galaxy Digital, believes it’s only a matter of time before banks enter the market as they catch “fear of missing out.” He said at the Yahoo Finance All Markets Summit” at which he was the “lone crypto voice:”

“I think institutions are moving towards investing. Its shocking how much has happened.”

Meanwhile, individuals have 21 days to make their case to the SEC about the VanEck bitcoin ETF, while any rebuttals must be submitted within 35 days. Should a bitcoin ETF get approved before year-end, it could have a similar effect on the market as the bitcoin futures inspired rally of 2017.

The market is either interpreting the SEC’s update as a positive sign or has become more immune to the slow process. It used to be that traders waited on pins and needles for the bitcoin ETF decision, as evidenced by the bitcoin price’s weakness over the summer in response to the Gemini bitcoin ETF product denials. But clearly, that’s not the case today, with the bitcoin price trading above $6,700 and the combined market value headed toward $222 billion.

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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4.6 stars on average, based on 61 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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Crypto Update: Surging Ripple Leads Strong Rally, Tops $0.50

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The last 24 hours saw a much-awaited bullish shift in the cryptocurrency segment, as finally, the rally of a major triggered a broad and sustained move in the other top coins as well. Ripple surged by 50% after the initial rally of the bear market lows, and it really took off after yesterday’s buy signal in our trend model, topping the weaker $0.3750 resistance level and the very strong long-term zone near $0.42, which also marked the dominant declining long-term trendline.

XRP/USDT, 4-Hour Chart Analysis

Despite the strong rally, a long-term trend change is not confirmed yet, and traders should reduce their positions here, as at least a re-test of the key zone near $0.42 is very likely following the surge, with resistance ahead at $0.54, $0.575, and $0.64. With the move, XRP also got close to take over Ethereum as the second largest coin, with currently around 10% separating the two currencies in market cap.

BTC/USD, 4-Hour Chart Analysis

Bitcoin is also significantly higher today, although the 5% move is dwarfed by Ripple 50% jump. BTC triggered a buy signal overnight, rallying past the $6500 resistance level, and it is currently testing the zone $6750.

The long-term signal is still only neutral, and although the current broad rally is encouraging, the segment is still not out of the woods. Further resistance zones are now ahead at $7000 and between $7200 and $7300, while support below $6500 is still found at $6275, $6000, and near $5850.

Altcoins Still Mixed but Rally Gaining Breadth

ETH/USD, 4-Hour Chart Analysis

Ethereum moved up to the recent swing high and got close to the key resistance level at $235 once again amid the broad rally, but for now a clear break to confirm a new upswing is not completed. That said, the coin is still on a short-term buy signal, and given the improvements in the segment, traders should hold on to their positions here.

A sustained move below $200 would still warn of a re-test of the lows near $170, but a move above $235 could lead to a test of the $260 resistance level and the strong $275-$280 zone.

XMR/USDT, 4-Hour Chart Analysis

The outlook for the major altcoins improved, but there are still relatively weak coins, with the likes of ETC, IOTA, LTC, and NEO still not being in good technical positions. That said, Stellar, Cardano, Dash, and EOS also joined the rally, and Monero maintained its short-term buy signal too.

XMR is still below the recent swing low and the $125 resistance level, and well shy of the key long-term zone near $150, but the stability of the coin is encouraging.

Dash/USD, 4-Hour Chart Analysis

After the bullish consolidation period below $200 that we pointed out, Dash moved above the key level following Ripple and the broader market higher. Dash could be part of a bullish leadership, should the current move continue, and although the long-term downtrend is still intact, the coins is now on a short-term buy signal in our trend model, with further support at $190 and $170 and resistance ahead at $215, $225, and $265.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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 350 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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