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New Diversification

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One of the keys to sustainability in any investment is diversification. Even if you’re dealing with extremely risky assets, just having an even mix of them is enough to bring your level of risk down drastically.

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This is why index funds and ETFs work so well. They invest in lots of different assets within a specific sector so as long as that part of the economy keeps growing at a normal pace, you’ll see decent returns.

After the recent “Tech tantrum” that saw the Nasdaq fall 238 points in a single day, investors want to take this opportunity to find out how to strengthen their respective portfolios.

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Mostly, what they’re finding is that the big tech names have been dominating investment portfolios. Such that a single investor may have lots of different investments that all hold the same four stocks as their main holding.

For clients in eToro who have many different types of investments in copytrading and copyfunds, Every once in a while, it pays to check for unnecessary correlations in your portfolio. You can do this quite simply by using the portfolio pie chart, which is available at this link: etoro.com/portfolio/chart/

Take a look at your allocation and risk. Let me know what you find.

Mati Greenspan
eToro, Senior Market Analyst

 

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

Market Overview

Wall Street is celebrating the return of the tech stocks after their recent fall and are now booking in new record highs for the Dow Jones and the S&P 500.

This as volatility remains near all time record lows.

Watch out for China?

The MSCI has a lot of ETFs in it, most of them are quite stable and steady. One, that is specifically for emerging markets will face a big decision today.

You can find the index at: etoro.com/markets/eem

The decision is simple, whether or not to add stocks from mainland China inside this index. Chinese stocks have been performing well lately, so adding them into the diversification pool could be seen as a good thing.

However, Chinese stocks have a way of reporting back to the Chinese government, who tends to exert a certain amount of pressure on the companies themselves. They also are exposed to currency risk related to the Renminbi.

“I think that this would not be a good decision for the MSCI to make. Adding these Chinese stocks may be good in the short term but it will make the entire index more risky for long term investors.”

Macy Ma
eToro, China Analyst

Bitcoin Scale-ability

The big debate about bitcoin may be coming to a head. A solution that was agreed on in New York called, you guessed it, the New York Agreement has recently reached a milestone of 70% of miners who agree to implement it. Once 80% consensus is reached, the protocol will begin locked and loaded and begin to take effect.

The idea is similar to the segwit solution that was implemented on Litecoin recently and hopefully will be strong enough to process 8000 to 10,000 transactions per block in the chain.

The great news is, that if this happens, the hard fork will likely have no impact on regular bitcoin users. The main bitcoin that we know today will continue to exist as normal, and any miners who did not signal for segwit2x will be forked off the network.

The price of Bitcoin is reacting nicely to this news and is up up up today. If we see a break above $2,700, we could certainly see a fresh wave of interest from all sorts of new and old investors.

This is going to be interesting to watch. Wishing you an amazing day ahead!!

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.

Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Bitcoin

Bitcoin Hits $100 Billion as Record Rally Continues

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Bitcoin’s epic rally intensified Friday, as the token reached $6,000 for the first time in its history, bringing the total market value above $100 billion.

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Bitcoin’s Fresh Intraday High

BTC/USD touched an intraday high of $6,064.14, bringing its total market cap to $100.8 billion. That’s roughly $85 billion higher than where the market started in January.

At press time, bitcoin was trading around $5,993, up more than 5% on the day. From a technical perspective, the digital currency is considered overbought. However, the technicals are typically less reliable during extreme price movements like we’ve seen in recent weeks. The world’s leading cryptocurrency has added a staggering 520% this year.

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Bitcoin’s rally didn’t really extend to other cryptocurrencies Friday. Ethereum continued to trade just north of $300, while Ripple (XRP) consolidated a hair below 21 U.S. cents.

The cryptocurrency market’s combined market cap is roughly $173.4 billion, which is roughly $3 billion less than the Monday’s peak.

$10,000 Bitcoin?

Bitcoin could be heading north of $10,000 a unit in the not-too-distant future, according to a survey conducted by CNBC. About 49% of the 23,118 people who voted in the CNBC poll said the digital currency will reach the five-figure threshold.

Roughly 16% of respondents said bitcoin prices are heading to between $6,000 and $8,000. About a third selected the Jamie Dimon option by calling bitcoin a fraud.

Though unscientific, the survey clearly shows that the mainstream is paying attention to the rapid acceleration of cryptocurrency. At least a portion of them will investigate the matter further, and likely conclude that digital assets are a welcome addition to their portfolio.

It’s impossible to associate bitcoin’s success with just one catalyst, but it’s clear that institutional support, the allure of the blockchain and favorable regulation in markets like Japan are feeding the rally. An anticipated November hard fork is also helping to shore up price.s

A Day of Milestones

Bullish sentiment also rubbed off on U.S. stocks Friday, with the Dow Jones Industrial Average extending its rally above 23,000. The blue-chip index climbed tacked on 165 points to close at 23,328.63 after the U.S. Senate passed the 2018 budget by the narrowest of margins.

The S&P 500 and Nasdaq Composite also set fresh all-time highs, with financials and industrials leading the rally.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Analysis

Cryptocurrency Analysis: Bitcoin Tests $6000 as Market Settles Down

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Bitcoin is in the center of attention yet again, as the most valuable coin is knocking on the door of the $100 billion level in market capitalization. The coin touched our long-term target at $6000 on several exchanges, but it’s now trading slightly below the historic level.

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While the rest of the market is quiet, BTC is very active, and it could be in for a volatile weekend, as despite the long-term overbought readings, the short-term uptrend is clearly intact. That said, investors should avoid opening new positions here, and consider lowering their exposure further, while traders should only trade with smaller than usual sizes. Support levels are found at $5400, $5000, and near the $4650 level.

BTC/USD, 4-Hour Chart Analysis

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As the rest of the majors are still recovering from the recent correction, the total value of the segment is below its all-time high, with BTC’s dominance now standing at 57%. Most of the largest coins are little changed, with Monero and Liteocin showing considerable strength and IOTA still being the weakest of the majors. With all attention on BTC let’s see how the most traded altcoins look before the weekend.

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Cryptocurrencies

Trade Recommendation: Ethereum

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The price bounced from 300.00 level. RSI and a reversal candlestick pattern confirmed price reversal. MACD supports upward movement and DMI allows opening long trades. Pending orders for buy should be placed above the local swing at 318.00 level. Stop orders should be placed below 300.00 support at 286.00 level. Profit targets are 350.00 and 390.00 levels. If you don’t use leverage, recommended trading volume for this trade is up to 10% from your deposit.

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Market: ETHUSD
Buy: 318.00
Stop: 286.00
Profit Targets: 350.00 and 390.00

The trading signal is based on Poloniex chart.

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Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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