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Let’s Be Optimistic Here

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Today we witness history.

Just about every government and bank on the planet has toyed with the idea of making their own cryptocurrency. Today, of all people and places, Nicolas Maduro will make this a reality in Venezuela.

This new experiment is actually a milestone in blockchain technology and could very well provide an excellent case study for economists for generations to come.

Big thanks to the author of this excellent article for his praise of my analysis…

Wait a second… am I the only one? Maybe I’m being naive…

Indeed, everybody, I speak with and everything I read about this seems to indicate that this project is doomed to fail. However, the more I think about it, the more I can’t help but be tempted by the possibility that a plagued nation may finally be on the cusp of salvation and a stable economy.

To me, this just doesn’t seem to be a Kodak moment or just another ICO scam. Of course, if it is it won’t take long before it’s completely exposed.

By putting the entire economy on a decentralized blockchain, Nicolas Maduro is actually opening up the books. Every person on the planet will have the option to scrutinize every transaction with indisputable evidence.

Maduro is plagued by a lack of trust from his people. He’s made many efforts to change his image but they have often been met with skepticism. This effort is really a Hail Mary for him and if it doesn’t work there will be consequences.

As with many other ICOs I’ve seen, information on the website isn’t exactly clear or organized. Of course, as with any other ICO the risk element is through the roof and there is a high probability that this will not work. However, that doesn’t always stop alternative investors from participating.

Personally, I will likely put a small amount of Ether on this project. Not because I think the price will go to the moon (this is highly unlikely given that this will be a commodity-backed currency) but because I would like to be part of this fascinating experiment.

Ultimately the success of this project will depend on the people of Venezuela. If they choose to adopt the new currency then it will actually have a fighting chance of survival.

@MatiGreenspan
eToro, Senior Market Analyst

(Reminder: Today’s Webinar will be at 15:00 GMT. If you haven’t registered yet, please do so now: eToro.tw/Webinar)

Today’s Highlights

  • Back in Business
  • $250 Billion Bonds Coming
  • Crypto Momentum Building

Please note: All data, figures & graphs are valid as of February 20th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

China is still on holiday until Thursday, so it will be Europe leading this session. The ECB’s minutes from their last meeting will be released at 12:30 GMT, which should kick things off nicely several hours before Wall Street returns from their long weekend.

During the stocks downtime, we did see a bit of movement in the currency markets. Especially on the US Dollar, which recovered a bit from the extreme lows of last week.

Lots of Bonds

For those of you who have been paying attention to the markets over the last 3 weeks, you’ve probably noticed that the bond market has been holding an increased significance in the global investment narrative.

So it should be noted that about $250 Billion worth of new bond notes will be put auctioned off by the US government over the next three days.

It will be very interesting to see how much appetite the market has for these treasures at this time. Who knows, perhaps oversupply really does spark demand.

Here we can see the US 20 Year Bond, which has fallen sharply since December.

Now for Crypto

We’re well off the lows now. Bitcoin is rallying and finally, we’re seeing some very welcome divergence in the crypto-market.

Since the lows two weeks ago (February 6th), we can see a massive difference in the performance of some of the top cryptocurrencies with Ethereum gaining 51% while Litecoin has rocketed 109%.

This is an excellent sign and one we’ve been waiting for.

However, the main downward trendline (purple) on Bitcoin has not yet been broken. If we do see that broken soon, there’s a fair chance the next leg could take us above $15,000.

As always, please feel free to send me any questions, comments, feedback, or resources. I’m always happy to receive them. 🙂

Have an amazing day.

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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9 Comments

9 Comments

  1. elcloche

    February 20, 2018 at 2:11 pm

    Hi Mati,

    I’m going to star saying that I’m Venezuelan.

    The people in power are thugs, criminals, scam artists, they have kidnaped every institution in the country and has been declared a dictatorship by many countrys.

    Since 1999 when Chavez took over, they have only looted the country for personal gains.

    They are pulling this out just to keep robbing people because USA block them from getting new or negotiate their debt .

    They are not there to “try to make things better for the people”, people in Venezuela are starving and they do not care.

    You wrote “However, the more I think about it, the more I can’t help but be tempted by the possibility that a plagued nation may finally be on the cusp of salvation and a stable economy.”, but I’m sorry to disappoint you by telling you that they are going to take all your money (and anyone’s who invest in it) and will waste it all up, and then make another emission and keep it up until they bleed everybody’s trust and money (just as they did with their national bonds, that they just missed their payments by the way).

    I’m not saying it might not be good to buy some coins and sell them for some gain later as some people did with the bonds (maybe the Russian and Chinese government buys it too), but beware that at the end somebody will get ripped off, when the coin tumbles and the Venezuelan Government refuses to pay with the reserves (there is no enforceability whatsoever compared to the bonds).

    Maybe Russia and China will be the new owners of the Venezuelan’s Oil, who knows?.

    • Mati Greenspan

      February 20, 2018 at 2:18 pm

      Thanks a lot for the unique insight elcloche. It’s highly appreciated.

      Yes, you’re probably right. It is very likely to be a scam, but if it is, it will be exposed very quickly. Over many years in the markets, I’ve learned that in many cases it pays to be an optimist.

      • elcloche

        February 20, 2018 at 2:46 pm

        As investor/trader yes, you could be optimistic.

        As for me and my country, I just see more debt and robbery on the long run. We are just doomed while this f*ers have the power.

        • Mati Greenspan

          February 20, 2018 at 2:48 pm

          In fact, as an investor I don’t feel there is potential here. Though the downside risk is astronomical there is very little potential for upside. If the project works well, the price of the coin should be stable, so no moon potential for the Petro.

          My optimism is purely to see the robbery exposed by an open-book system.

  2. westgarthwines

    February 20, 2018 at 5:35 pm

    My Venezuelan friend confirmed elcloche’s comments.

    He also added that he simply doesn’t trust their technical, financial or management capabilities. This is the same group of individuals that has basically destroyed the oil production and associated with the colombian drug trafficking FARC to stay afloat. The US is also toying with the idea of cutting their oil via sanctions due to their dictatorial practices.

    Venezuelan oil production: https://www.bloomberg.com/gadfly/articles/2018-01-18/venezuela-s-oil-production-collapse-bad-news-worse-news

  3. jhmblvd

    February 20, 2018 at 6:02 pm

    I think it’s a great idea. It could have impact we don’t expect. It should certainly raise awareness about how blockchain can provide a transparent system. I know little about the situation in the country except that it’s bad and people are hurting. Governments have power, power must be checked and when it’s not checked people suffer. I don’t see much investment potential here, but who knows. I may buy in a bit just to be part of the story and in support of blockchain.

  4. douglash

    February 20, 2018 at 9:23 pm

    Petro is just an effort by the Maduro regime to hold out a bit longer and wring more money from their people and country. They are thoroughly corrupt. They laugh at their “investors”. Anyone buying the Petro is helping prop up this cruel dictatorship.

    Ask yourself, if you support petro, where would you draw the line? SyriaCoin? NorthKoreaCoin? These totalitarian regimes that murder their own people will soon launch crypto projects to fund themselves and evade economic sanctions.

    Crypto is supposed to be the people’s money. What a cruel reversal to let it prop up murderers and despots. Please revise your article, since few will read the comments. Your optimism is misplaced here. Any investment gains from petro will be blood money.

    • Mati Greenspan

      February 20, 2018 at 9:30 pm

      Thanks Douglash. My point here is that if this is a blockchain project it carries the possibility of making the economy transparent. That is all.

      I hope it was clear that this is not a great investment idea.

      • douglash

        February 21, 2018 at 9:39 am

        But you still seem to miss the point. Who cares if it is potentially profitable or not, this is quite clearly blood money. Any money contributed to petro helps keep this murderous, illegitimate regime in power and allows it to bypass sanctions and continue to starve its own people.

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Market Overview

U.S. Stocks Rise as Fed Confirms Dovish Pivot

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U.S. stocks extended their gains Wednesday after the Federal Reserve offered further reassurance that it will hold off on raising interest rates for the time being. Cryptocurrencies reported a mixture of modest gains and losses as volumes backed off from their yearly highs.

Stocks Extend Rally

The Dow Jones Industrial Average climbed 63.12 points, or 0.2%, to close at 25,954,44. The blue-chip index has risen in five of the past six sessions and looks poised to reach 26,000 this week.

The broad S&P 500 Index finished up 0.2% to 2,784.70. Materials stocks led six of 11 primary sectors higher, with most of the gains concentrated in primary industry.

Meanwhile, the Nasdaq Composite Index pared gains to finish flat at 7,489.07.

Stocks are in the midst of an eight-week rally, but the following chart spells trouble for the S&P 500 Index.

Fed Puts on the Brakes

The Federal Reserve on Wednesday provided more details as to why it decided to be patient with normalizing monetary policy. In the official transcript of last month’s meeting, Federal Open Market Committee (FOMC) members cited stock market volatility and weaker global economic growth as the main obstacles standing in the way of policy normalization.

According to the minutes, there were a “variety of considerations that supported a patient approach.” Additionally, “a patient posture would allow time for a clearer picture of the international trade policy situation and the state of the global economy to emerge and, in particular, could allow policymakers to reach a firmer judgment about the extent and persistence of the economic slowdown in Europe and China.”

The Fed’s dovish pivot last month allowed the stock market to extend a bullish revival that began just after Christmas. Central bankers will hold their next policy meeting next month. The March interest rate statement will be accompanied by a revised summary of economic projections covering GDP, unemployment and inflation.

Crypto Markets Flatline

The combined value of all cryptocurrencies hovered north of $135 billion on Wednesday, where it was little changed compared with the previous day. Markets succumbed to a fresh wave of selling overnight, as bitcoin and the major altocins reported modest declines. By the early morning, most of the losses had disappeared.

Trading volumes dipped below $30 billion but were well off the highs from Tuesday. An influx of capital into the crypto ecosystem could make for volatile trading conditions in the near term.

Bitcoin was last seen trading at $3,983.49, according to CoinMarketCap, an aggregate data provider. The bitcoin price is trading hands well north of $4,000 on Bitfinex.

Ethereum’s price was little changed at $147.83. XRP edged down 1.7% to $0.30275. EOS extended its rally, climbing 5.3% to $3.84. Read more: Litecoin, EOS, Binance Coin, Maker: Altcoins Leading the Charge.

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

USA is Ready to Invest in Crypto

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Hi Everyone,

In our ongoing effort to bring crypto to the general public, we’ve done yet another survey, this time focusing on online traders in the USA.

The results are clear as day, the United States is more than ready to invest in crypto.

Definitely make sure to read the full report with all the jaw-dropping stats and the methodology of the poll. This is extremely encouraging.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • US-China trade deadline: 9 days | Days to Brexit: 37
  • Unsustainable Trajectory
  • Crypto Rally Stalls

Please note: All data, figures & graphs are valid as of February 20th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Everyone will stop what they’re doing at 2:00 PM New York time today to take in the FOMC‘s meeting minutes. During their last meeting, the Fed did a complete 180 on policy, which many have pointed to as a complete capitulation to the market’s desires. So, when they release the minutes of that meeting it will be extremely interesting to hear what they have to say.

It’s becoming increasingly clear that there will not likely be any final deal between the US and China by March 1st. It’s also becoming increasingly clear that this deadline was never very significant in the first place. Trump has indicated that he’s willing to let the deadline slide if significant progress is being made, and many feel that it is, however, until we get final confirmation of that it will remain in our countdown above. It wouldn’t be the first time Trump changed his mind at the last moment.

As well, I’ve decided to leave the Brexit countdown timer set for March 29th, the day Article 50 kicks in, rather than the new self-imposed deadline that Parliament put on their Prime Minister.

Markets are now returning to their normal levels of volatility.

Trajectory Unsustainable

After crashing in January and making a huge comeback in January, financial markets are now remarkably average.

The 200-day moving average (blue line) shows us the average price of the last 200 days and is one of the most widely watched indicators among technical analysts. Here we can see that the Nasdaq 100 is now at this level.

Many analysts were quick to point out that if we ignore 2018 and look only at the stock market performance from January 1st, we’re actually seeing stellar results.

Some pundits even take this a step further. Here’s a graph posted by @StockCats who pointed out that the current trajectory of the markets does look a bit unsustainable.

Crypto Rally Stalled – Where to Next?

Let’s face it, these last few days have been amazing. However, even within this longest crypto bear market of all time, there have been rallies before that ended up fizzling out. So, even though it’s possible we go to the moon from here, it certainly pays to be cautious.

One thing that’s interesting to me is the different spins that some of the mainstream media are putting on this. The Independent is saying that it’s because of the Galaxy S10 Crypto Wallet…

…while Bloomberg is saying that…

Forbes, on the other hand, seemed to focus on the altcoin markets.

For me, it’s pretty clear that this whole thing began due to a shortage in Ethereum creation. As I explained in an interview with BlockTV yesterday, the creation of new Ether tokens has been severely limited lately. Especially for those of you who are less inclined to look at graphs and charts, feel free to watch the recording here.

For hose of you who do like charts, check this out. This supply shortage while demand remained consistent caused Ethereum’s price to rise dramatically and the rest of the cryptos followed. By today, we’re going on sheer momentum. After months of depressed prices, it’s about time we had a real rally in this market.

As I’m writing, it does seem that we may be getting a continuation of the rally but it’s still too early to tell. Let’s see where the day brings us.

Wishing you an excellent day. As always, please continue sending in your valuable feedbacks, questions, comments, and insights. It is always useful and always appreciated.

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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Market Overview

Walmart Earnings Propel Stocks Higher; Crypto Market Cap Hits $135 Billion

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U.S. stocks extended their rally on Tuesday, as a positive earnings surprise from Walmart Stores Inc. (WMT) propelled the major indexes higher. Cryptocurrencies maintained their upward edge with EOS, Stellar and Binance Coin leading the gainers.

Relief Rally Continues

The major indexes overcame a tepid start to finish sharply higher on Tuesday. The broad S&P 500 Index rose 0.2% to 2,779.76, its seventh gain in the past eight sessions. Eight of 11 primary sectors finished in positive territory, led by materials. Consumer stocks also outperformed.

The Dow Jones Industrial Average gave up most of its gains to finish only moderately higher. The index closed at 25,891.32, having gained 8.07 points, or 0.03%.

Shares of Walmart Stores rose 2.2% after the retail giant reported better than expected quarterly results. For its fiscal fourth quarter, the Bentonville, Arkansas-based company reported per-share earnings of $1.41 on sales of $133.79 billion. Both figures topped analysts’ median estimate.

Steady performances for information technology and communication stocks lifted the Nasdaq Composite Index to higher ground. The tech-heavy benchmark climbed 0.2% to 7,486.77.

The Dow extended its winning streak to eight weeks on Friday. Read more: Stocks Surge on U.S.-China Trade Optimism; Dow Notches Eighth Consecutive Weekly Gain.

U.S.-China Trade Talks Resume

China’s trade envoy has arrived in Washington to resume high-stakes negotiations with the Trump administration this week. Both the U.S. and China are upping the ante ahead of a self-imposed trade-deal deadline on Mar. 1. President Trump says he may let the deadline “slide” if both sides make progress toward a new deal.

The latest round of talks between the U.S. and China wrapped up on Friday in Beijing. The White House said the two-day meeting was “detailed and intensive.”

“Both sides will continue working on all outstanding issues in advance of the March 1, 2019, deadline for an increase in the 10 percent tariff on certain imported Chinese goods,” the White House said Friday in a statement.

Return of the Crypto Bulls?

Crypto markets flashed green on Tuesday, as bitcoin clawed back above $4,000 for the first time since early January. The largest cryptocurrency by market cap and trading volume reached a session high of $4,083.50 on Bitfinex. To negate the downtrend, bitcoin’s price must cross above $4,200.

In terms of percentage gains, Binance Coin was the best-performing major on Tuesday. It rose 12.7% to $10.88, where it held firm to tenth spot on the market-cap index.

EOS climbed 5.5% to $3.66. Stellar Lumens advanced 12.7% to reach $0.0912.

At the time of writing, the total market capitalization of all cryptocurrencies is $135.5 billion. Trade volumes have surged to $33.9 billion, with all major exchanges reporting a significant increase in turnover since Sunday.

Read more: Crypto Markets are Up $16 Billion Since Sunday; What’s Behind the Rally?

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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