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Money Leads to More Money – Power to More Power

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Every 5 years the Central People’s Government of China has a grand political event to reshuffle the distribution of power in the world’s most populated country.

In today’s 19th National Congress the most powerful man in the world just became even more powerful. President Xi delivered an eloquent three hour speech stressing the importance of globalization and China’s role of leadership going into the future.

The reaction from financial markets in Asia was rather muted given the recent gains in global markets.

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of October 18th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

A brand new record high for the Dow Jones and a huge milestone of 23,000 points. The index is now up approximately 25% since Donald Trump was elected last November!!

Though Donald Trump might make a comment or tweet on this fact later today the rally may not be entirely Trump related.

Correlation does not equal causation!!

The Trump election did indeed wake the markets from a deep slumber that it was in with little movement between 2014 and 2016. However, if we zoom out and take a look, we’ll see that since the bottom of the market after the crash of 2008 we’re up 228%.

Many analysts agree that earnings ratios are at their peak yet investor sentiment remains extremely bullish on stocks.

Why are stocks going up?

The reasons are simple. First, there’s still plenty of cash ready for investment left over from the central bank injections over the past decade. Rates for borrowing money are still very cheap, which allows investment firms to borrow money easily and put it in the stocks.

Furthermore, any portfolio manager currently sitting on the sidelines is getting squashed. Try explaining to your clients that you missed out on a 25% rally because you think the markets are overvalued and watch them leave and go to a competitor.

This circle can indeed go on for a while as money does have a tendency to lead to more money.

In this cycle particularly, due to the ample assistance from the central banks, I’m not even certain that historic PE ratios are even a factor.

Bitcoin Volumes

The Crypto Market is pulling back a bit. After the incredible highs we saw over the weekend it only makes sense.

Specifically regarding bitcoin, we need to understand where the excitement and the action are coming from. Sure, many people are fed up with government backed money and I do believe that the financial revolution is well underway. But besides grandiose ideology, there is one country that stands above the rest as far as bitcoin adoption.

According to an article in bitcoin.com 60% of all volume on bitcoin is coming from Japan, with an additional 25% coming from the USA and 9% from South Korea.

Well, that makes sense. After legalizing bitcoin as a currency in April, Japanese vendors and businesses are adopting it at an incredible rate.

We continue to watch other interesting countries that seem to be on the verge of this type of adoption particularly Russia, Australia, and hopefully someday soon, India.

Many thanks to a local band that I’m fond of for the title of today’s update. And many thanks to everyone who continues to send me your comments, feedback, and relevant articles. Keep tagging me!!

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.

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 114 rated postsSenior Market Analyst at Etoro.com.




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Altcoins

Cryptocurrency Market Hits One-Week High as Volumes Spike 38%; Bitcoin Cash Jumps 10%

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The cryptocurrency market booked solid gains on Monday, as coin values and trading volume reached their highest levels in a week.

Market Update

With the exception of Tether’s USDT stablecoin, all major cryptocurrencies in the top-ten reported gains. In percentage terms, bitcoin cash was the strongest performer, rising more than 10% to a high of $804. That was BCH’s highest reading in nearly a month, according to CoinMarketCap.

The value of bitcoin reached a high of $6,691 Monday for a gain of nearly 5%. At press time, BTC/USD was trading at $6,674 on daily trade volumes of $4.6 billion. As Hacked previously reported, the $4 billion volume mark is closely associated with uptrends for the bitcoin price. Bitcoin is now eyeing resistance between $6,800 and $6,900, which is the upper end of last weekend’s rally.

Ethereum also notched one-week highs with gains of more than 5%. The second-largest cryptocurrency by market cap was last seen trading just above $476. The clean break above $450 is an encouraging sign for the bulls, who continue to target$500 as a critical inflection point for ETH/USD.

Ripple XRP showed positive momentum Monday as prices rose to fresh one-week highs. The so-called “banker’s cryptocurrency” is up 6.1% at $0.474. Ripple has been in the spotlight for all the wrong reasons lately as the San Francisco-company fends off another lawsuit claiming XRP is a security.

Market Sentiment Improves

A sudden shift in investor sentiment underpinned the market’s $20 billion gain on Monday. That shift was fueled by reports that BlackRock, the $6.3 trillion asset manager, is exploring entry into the cryptocurrency market.

Sometime over the past 12 months or so, the company has gone from vilifying crypto to treating it as a potential value driver. According to CNBC, BlackRock has been researching cryptocurrency since at least 2015.

At the time of writing, the total cryptocurrency market was valued at $270.5 billion. It notched $271 billion earlier in the day, the highest in seven days.

Trading volumes shot up 38% to $14.2 billion, with Binance and Huobi each processing more than $1 billion in transactions.

Coinbase – a company betting big on firms like BlackRock entering crypto – has also been a source of optimism after it announced Friday that it has short-listed five coins for future consideration. The five coins in question are Stellar (XLM), Cardano (ADA), Zcash (ZEC), Basic Attention Token (BAT) and ox (ZRX).

Coinbase remains non-committal about whether it will eventually add these cryptocurrencies to its exchange listing. However, their mention was enough to spur double-digit percentage gains early Saturday.

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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4.6 stars on average, based on 497 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bitcoin

Bitcoin Price Gains Momentum as BlackRock Gets Serious About Crypto

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After a week of lateral moves, the bitcoin price rose Monday on reports that one of Wall Street’s biggest asset managers was assembling a team to explore cryptocurrency adoption.

Bitcoin Price Update

The largest cryptocurrency by market capitalization peaked near $6,620 at 08:49 UTC, the highest in six days. At the time of writing, bitcoin was trading near the intraday high of $6,620 for a gain of 4%, according to CoinMarketCap.

Bitcoin held relatively steady over the weekend, with prices hovering between $6,300 and $6,400. The coin’s successful defense of $6,000 – a key technical and psychological threshold – has encouraged bids after trading volumes plunged to their lowest levels of the year.

As Hacked reported Sunday, turnover in the cryptocurrency market fell to $8.8 billion over the weekend. Bitcoin accounted for roughly a third of that total. On Monday, bitcoin’s trading volumes were back up to around $4.9 billion, the highest in two weeks.

Bitcoin is likely to run into resistance north of $6,800 – a region that capped last weekend’s rally. BTC/USD peaked at $6,866 on July 8.

Institutional Bull Run?

Bitcoin’s gains were fueled by speculation that BlackRock, one of the world’s largest asset managers, is planning an entry into the cryptocurrency market.

London’s Financial News, citing unnamed sources, said BlackRock has assembled a working group to investigate blockchain technology and cryptocurrencies. Sources also indicated that the team of exports is looking at what other asset managers are doing with cryptocurrencies and how it can impact BlackRock’s underlying business. The findings of the research will be presented to senior management.

“Like most financial institutions, BlackRock has a working group that meets periodically to exchange information on blockchain and consists of employees from various parts of the business,” a spokesperson for the company said in a statement, according to CNBC.

“We have been looking at blockchain technology for several years, recognizing potential for shared processes and data across market participants, clearing, settlement and reconciliation and simplified securities issuance.”

CNBC believes the working group was first assembled in 2015.

While cryptocurrencies continue to polarize Wall Street, major financial institutions are slowly changing their tack. It was only last year that BlackRock CEO Larry Fink said that bitcoin was merely a “speculative” instrument used for anonymity and money laundering. Now, his company may be on the cusp of entering the market.

Exchanges like Coinbase are betting big on institutional adoption and have created a suite of custodial services aimed at luring this segment of the market. Industry experts believe that the next major bull market for cryptocurrencies will be driven mainly by institutions, marking a significant departure from the retail-dominated surge of 2017.

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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4.6 stars on average, based on 497 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Altcoins

Cryptocurrency Market Rebounds as Trade Volumes Recover from Yearly Low

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Cryptocurrency prices were seeing green Sunday, as market activity rebounded from the lowest level of the year with bitcoin and the major altcoins making tepid progress.

Crypto Market Update

Every cryptocurrency in the top-20 by market capitalization was trading in positive territory Sunday. As a result, the total market capitalization of all digital currencies rose by $6 billion to $254.5 billion. Bitcoin’s share of the pie remains roughly 43%.

The bitcoin price edged up 1.7% to $6,363, with the bulls continuing to defend the critical $6,000 level despite repeated downturns.

Ethereum, the no. 2 cryptocurrency by market cap, rose 2.4% to $447.

Bitcoin cash jumped 3% to $719. BCH has shown poise over the past five days even as accusations of node centralization continue to grow.

Ripple XRP rose 1.9% to $0.445. Meanwhile, EOS gained 2.4% to $7.13.

Volumes Hit 2018 Lows

Daily turnover in the cryptocurrency market bottomed fell to around $8.8 billion on Saturday, the lowest since November, according to CoinMarketCap data. Daily trade volumes rose by as much as 20% Sunday, reaching $10.5 billion. At the time of writing, 24-hour volumes were valued just under $9.9 billion.

Since the April downturn, trading volumes have thwarted multiple rally attempts for cryptocurrency prices. Daily turnover has crossed the $20 billion mark only once since June.

As Hacked previously reported, tepid volumes reflect a general decline in retail trading activity on major digital currency exchanges. This is further corroborated by the sharp drop in Google search results for terms like “bitcoin” and “cryptocurrency.” Basically, the half-year market downturn has spooked new traders from entering the market.

Amid the downturn, exchanges like Coinbase have reported a drop-off in app downloads as fewer traders show interest in buying cryptocurrency. Meanwhile, trading apps like Robinhood are still growing thanks to a suite of service offerings that extend far beyond cryptocurrency. Robinhood began offering cryptocurrency back in February but still maintains a thriving platform for traditional markets, such as stocks and ETFs.

Several leading exchanges have announced plans to relocate to jurisdictions with friendlier policies toward cryptocurrency. Malta, a tiny Mediterranean island state, has managed to lure Binance and OKEx to its shores thanks to favorable regulations.

As Hacked’s James Waggoner recently showed, much of the downturn in crypto trading activity has been associated with fears of a regulatory clampdown in jurisdictions like the United States and South Korea. In the case of China, those fears were realized last September when policymakers issued a blanket ban on cryptocurrencies and initial coin offerings.

However, a “tectonic shift” in regulatory thinking is currently underway, which could pave the way for a renewed uptrend in cryptocurrency markets. Case in point: the U.S. Securities and Exchange Commission (SEC) has declared bitcoin and Ethereum to be non-securities. So long as there is no conveyance of ownership, ICOs may also fall under this favorable regulatory purview.

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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4.6 stars on average, based on 497 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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