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Retailers Looking to Cash In on U.S. Black Friday

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In the United States, the day after Thanksgiving marks the unofficial start of holiday shopping season. This year, “Black Friday” looks to deliver solid revenues for a retail sector struggling with declining foot traffic.

Black Friday

For the uninitiated, Black Friday is a 24-hour bonanza of special deals and heavy discounts designed to lure shoppers to the mall. Industry data presented by the National Retail Federation (NRF) show that nearly seven in ten Americans are planning to shop over the weekend. This is expected to lead right into Cyber Monday, which is promoted heavily by online retailers as a day for massive bargains. Nearly half of Americans plan to be active during the Monday sale.


Source: National Retail Federation.

For retailers, Black Friday is a great way to unload overstock inventory and boost overall sales. It’s often said that big box retailers jack up prices all year long so they can reduce them in time for the holidays.

Of course, the sale won’t just be limited to physical retail outlets. Major e-commerce platforms, such as Amazon, are also ramping up their holiday marketing efforts to lure shoppers.

E-commerce sales have spiked in recent years, but retail spending continues to be dominated by the brick and mortar stores (the following chart provides an illustration).

Source: Bloomberg.

Retail Looking to Cash In

The retail sector has been hit especially hard in recent years by declining foot traffic and generally weaker consumer appetite. However, things appear to be looking up, with brick and mortar stores coming off a mostly positive earnings season. Retailing giant Wal-Mart put up especially strong results as share prices climbed to new all-time highs.

Investors can expect retail spending to rise in November and December as consumers prepare for Christmas. Retail receipts have risen in each of the last two months, according to data provided by the Commerce Department. Over the past 12 months, sales have been mostly positive.


Source: Trading Economics.

According to Bloomberg, overall holiday spending is expected to climb 4% year-over-year thanks to healthy labor market dynamics and rising property values. The Washington-based NFP expects the U.S. economy to generate $680 billion in sales during November and December.

Although retail spending is trekking higher, plenty of bix box stores are languishing. Compare sales declined 17% during the last quarter.

Consumer Sentiment Rises

U.S. consumer confidence came in higher than expected in November, a positive sign for retailers ahead of the holiday shopping season. The University of Michigan consumer sentiment index rose to 98.5 this month. It was still below October’s decade high.

According to survey director Richard Curtin: “Increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases.”

With the exception of a weather-related disruption in September, the U.S. economy has been churning out jobs at a steady pace for several years. The jobs market added 261,000 workers to payrolls in October, the Labor Department reported earlier this month. The unemployment rate dropped to 4.1%, its lowest point since December 2000.

A solid labor market backed by steady wage gains feeds into retail spending. Although the narrative has held up fairly well, average incomes aren’t growing fast enough. For economists, this signals more profound issues in the labor market that the official jobs numbers do not capture very well. Things like underemployment and quality of jobs remain key issues that may describe the slower wage acceleration we’ve seen over the past eight years.

On Thursday, the Labor Department said weekly jobless claims declined after back-to-back gains. The number of workers filing for unemployment benefits declined 13,000 to a seasonally adjusted 239,000 in the week ended Nov. 18, official data showed.

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 647 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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Pantera Capital’s CIO Predicts 10x Growth in Next “Huge” Crypto Bull Run

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Bull pattern

Joey Krug, who is the co-chief investment officer at Pantera Capital, believes cryptocurrency prices have bottomed or at least come close to it, but that doesn’t mean institutional capital will flood the market right away. Pantera Capital, which is a crypto investment fund that oversees approximately $700 million in AUM, participated in Bloomberg’s recent crypto conference in which Krug gave the temperature of the market.

While the bitcoin price may have bottomed, it has been stuck in a trading range, something that Krug doesn’t expect will change until a couple of catalysts take hold. The market drivers will be two-pronged, including the scalability of decentralized apps and the high cost of converting fiat into cryptocurrencies, the latter of which Krug expects is “going to change a lot over the next six to nine months.”

Pantera has been backing blockchain startups that are designed to solve the scalability issue. For instance, while the Bitcoin network can handle seven transactions per second (TPS) compared to “tens of thousands” TPS for Visa and Mastercard, Krug isn’t convinced that Bitcoin will ever reach a similar capacity. “But I do think we will see blockchains as fast as Visa or Mastercard in the next couple of years,” he added.

Incidentally, Spencer Bogart, who is a partner at Blockchain Capital, a crypto and blockchain investment firm that is similarly based in San Francisco, seems to be focused on a similar theme, saying today –

Meanwhile, Pantera’s Krug pointed out that to convert fiat to crypto on U.S.-based crypto exchange Coinbase, the cost is 150-400 basis points via a debit card or ACH bank transfer. “I think within the next year, that will be down to 50 basis points,” said Krug, adding: “Maybe not Coinbase, maybe some upstart.” For instance, the proliferation of crypto trading institutions like Bakkt and Fidelity should drive costs lower.

Market Rally

Fidelity’s move into crypto custody, meanwhile, didn’t make a splash in terms of prices because these days the market is more interested in “actual adoption,” a phenomenon that first requires scalability. While real scalability may remain a couple of years away, that doesn’t mean investors need to wait that long for the next Bitcoin rally. “We could see a rebound before then, but I think that’s going to be the real catalyst that drives the huge next bull run in my opinion,” said Krug, adding: “The crypto space overall [could grow] a good 10x from here.”

Pantera’s bitcoin fund has been performing similarly to the BTC price, while the broader digital asset fund is down more severely as investors flee altcoins and flock to bitcoin as a safe haven. Meanwhile, Pantera Capital is in the process of raising a $175 million crypto fund, the first close for which occurred over the summer and the next close for which is expected by year-end.

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 68 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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Nouriel ‘Dr. Doom’ Roubini Argues Against Crypto at Senate Hearing

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Economist Nouriel Roubini is kicking cryptocurrencies while they are down. In his testimony today before the Senate Banking Committee today at a crypto and blockchain hearing, Roubini argued that cryptocurrencies are “the mother of all scams and (now busted) bubbles.”

The timing of today’s hearing before skeptical U.S. Senators couldn’t have been worse, with the broader cyrpto market having shaved billions of dollars from its value overnight.  Roubini took advantage of the current sell-off, using it to his advantage and pointing to double-digit declines in leading coins like “ETH, XRP and other key cryptocurrencies.” The ETH price is currently barely holding above $200, while XRP is down by 13%, with the total value of the market hovering at $201 billion.

Chief among Roubini’s argument is that cryptocurrencies aren’t scalable and that there is “massive centralization” in an “oligopoly” that’s extremely risky. In fact, in recent days, he accused Ethereum Co-Founders Vitalik Buterin and Joseph Lubin of being “criminals” for their ETH holdings and wealth. Buterin fired back, hitting Roubini — who earned the nickname Dr. Doom for predicting the housing crisis of 2008 — where it hurts.

Skeptical Senators

Senators peppered Roubini and Peter Van Valkenburgh, who is the director of research at Coin Center, a nonprofit dedicated to protecting the open blockchain networks, with questions about bitcoin. They were seemingly looking for a way to distinguish between opportunities for technological innovation, e.g. crypto derivatives, and challenges surrounding regulation and scams.

U.S. Senators are open-minded about hearing about use cases for crypto and blockchain technology that can help the unbanked but appear skeptical about profit potential in light of this year’s 70% downturn in the BTC price and the ability to stamp out scams.

Meanwhile, Roubini may be an expert on the economy, but he knows enough about cryptocurrencies and the community that he refers to as “crypto land” to be dangerous. The blockchain, he stated is “nothing more than a glorified database.” He complained about the blockchain only being able to handle five transactions per second, adding that 80% of mining is controlled by an oligopoly.

But in defense of the crypto market, Van Valkenburgh frequently gave Mr. Roubini a wake up call on topics like TPS in which he rebutted:

“We can do a lot more. There are multiple layers being built on top of Bitcoin today that do [robot-powered] batch settlement” in which thousands of transactions can be completed.

As for Roubini’s argument about centralization, Van Valkenburgh quipped that miners with power “can’t do much.” For instance, the number of bitcoins in circulation is fixed, so they can’t change that. Also, they “can’t reallocate or move other people’s funds on the blockchain.” The worst they can do, he stated, is to “slow down the network” via a denial-of-service attack, which is the internet is similarly vulnerable to.

Market Volatility

The instability in cryptocurrency market prices this year was the elephant in the room. But as investors in any emerging asset class could attest to, there can be a “struggle to price something new,” said Van Valkenburgh, pointing to “irrational exuberance” that had, in fact, gripped the market. But institutional capital beginning to come off the sidelines, into bitcoin first and eventually other digital currencies, which is a sign of a maturing market. “We could use ETFs regulated by the SEC. We could use better [custodial solution] in general,” he added.

U.S. Senators questioned Roubini and Van Valkenburgh about the risks for Main Street investors. One Senator described that while the Winklevoss twins may be able to shoulder the risk, families risking their savings may not.

The profile of the average cryptocurrency investor, however, is someone who is “technologically sophisticated” as they must know how to manage public and private keys, Van Valkenburgh explained. The market is attractive to millennials, which reflects the ideal time to take investment risk in someone’s life.

Meanwhile, crypto exchanges have adopted “know-your-customer” standards for consumer protection. One shortfall is these companies must gain a money transmission license on a state-by-state basis, which is a cumbersome process. As a result, a federal license that encompasses a solution for market manipulation “would be a wise choice to make America a leader and protect our consumers,” Van Valkenburgh said.

While the Senate hearing on crypto may have taken place on a tough market day, the price declines are rivaled by the fact that bitcoin, while imperfect, is working.

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 68 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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Public Sale of Venezuela’s Oil-Backed Petro Cryptocurrency Slated for November

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After much controversy and speculation, the government of Venezuela has announced plans to take its state-backed petro cryptocurrency public.

Public Sale Announced

According to RT News, the public sale will commence Nov. 5, 2018, giving investors the opportunity to own a piece of Venezuela’s natural gas reserves. Government authorities describe the petro as an “instrument to consolidate Venezuela’s economic stability and financial independence, coupled with an ambitious and global vision for the creation of a freer, more balanced and fairer international financial system.”

President Nicolas Maduro claims the new cryptocurrency will not only strengthen the domestic economy, but revolutionize the global blockchain industry.

In addition to a public sale, Venezuela is incentivizing the usage of petro domestically by requiring all passport fees be paid in the virtual currency. This was confirmed on Friday by Venezuela’s Vice President Delcy Rodriguez.

Through a combination of public and private funding, the petro is intended to shore up Venezuela’s finances and give the government an additional source of revenue. The token sale could also help the South American country circumvent U.S. sanctions following its most recent election. The country hasn’t produced regular GDP data since 2015, but according to TradingEconomics, Venezuela’s economy shrank 13.2% in 2017. That followed a whopping 16.5% contraction the previous year. The economy has been in deep recession since mid-2014 as oil prices began to tank.

No Shortage of Controversy

To suggest that investors and market participants are skeptical of the petro would be an understatement. As Hacked reported last month, Venezuela has produced little evidence that the petro exists or that it raised $5 billion via pre-sale – something Maduro claimed back in March.

Reuters also visited the tiny hamlet of Atapirire – the supposed site of a booming oil industry that will be used to back-stop the petro – to investigate the government’s claims. At the time, no evidence of the petro was found.

The controversy continued last week after Joey Zhou, one of Ethereum’s developers, accused the Venezuelan government of plagiarizing parts of the petro whitepaper. In a tweet that appeared Oct. 2, Zhou said petro was a “blatant Dash clone,” referring to the Dash cryptocurrency. The whitepaper not only took an algorithm from Dash but provided a near-identical description of its proof-of-work specifications.

Nevertheless, these concerns haven’t stopped the government from doubling down on the petro and what it has to offer. Back in August, the Central Bank of Venezuela devalued its national currency, the Bolivar, by 95% and created a new petro-backed currency called the sovereign bolivar. The currency devaluation follows years of hyperinflation and economic chaos that has strangled the socialist republic.

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 647 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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