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Market Overview

The Revolution is Here

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One of our clients from eToro China is on a trip to Japan and has just sent us this spectacular picture…

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Almost made my eyes water.

This is one of the largest retail electronic stores in Japan and they are now accepting bitcoin.

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As we’ve discussed, the tipping point for Bitcoin will come from Japan first. The government has already removed all barriers by making it a legal currency and over the next few weeks more and more of these signs will start to appear across the country.

Analysts and traders of traditional assets are pulling their hair out and screaming things like “bubble” and “tulip.”

They simply don’t realize that this is more than a spike on a chart, it’s a changing of the guard. Money has value because people assign it value. The people of Japan are currently on a mostly cash system in a currency that is designed to depreciate in value over time.

The Japanese economy currently has approximately $11.6 Trillion worth of M3 money floating around.

The total amount of money on the bitcoin blockchain has just crossed $40 Billion. Though this is double what it was worth a month ago, is still nowhere near the size it would need to be to support even 10% of Japanese commerce.

We eagerly await India’s decision on digital currencies. A decision that Prime Minister Narendra Modi is taking very seriously. A green flag here would mean an additional 1.3 billion potential blockchain users in the span of a few months.

Mati Greenspan
eToro, Senior Market Analyst

Market Overview

President DJ Trump will be visiting Nato today for the first time. The organization that he has called “obsolete” while on the campaign trail. This would certainly be an uncomfortable visit but at this point seems like no sweat for the president.

He seems to have patched things up nicely with the Muslim country of Saudi Arabia, and possibly make progress in the middle east, not so much with the Pope though.

Let’s wish the President well today. After all world peace is literally at stake.

Rates are Risin’

The US Federal Reserve has indicated that they are indeed prepared to raise rates in June despite a distinct lack of inflation. In addition, the Fed seems to be getting serious about finally winding down their massive balance sheet.

Despite the seemingly good news, the US Dollar did take a dive as the meeting minutes were announced.

In addition, ECB President Mario Draghi made a statement yesterday that seemed to stick out. It seems the European Central Bank is considering to raise their interest rates even before winding down the stimulus program. Meaning, they’ll continue printing money but at the same time raise the cost to borrow that money.

Stock markets are doing fine today. In fact, couldn’t be better. The S&P500 ended the day yesterday at a fresh new all time high.

Asian markets are full steam ahead today with gains of nearly 3% in the China50…

The BIG Meeting

The main event of today will no doubt be the much anticipated OPEC meeting. Leaders of the East have made big promises of huge production cuts through Q1 of 2018.

The price of oil has been rising over the past few days in preparation for this meeting but it will be difficult for OPEC to deliver even better news than the already circulating knowledge that big cuts will be announced.

For now, Oil is in the top half of it’s range from $42.50 to $55 a barrel. A disappointment here could easily carry it down hard, whereas there seems to be a bit less room for growth if they manage to deliver on their promise.

The Russian Ruble is also being affected by all this. We can see the USDRUB is quite close to her lowest point in 2 years. The level of 56 Rubles to the Dollar is currently providing massive support.

If OPEC delivers today and the Ruble starts to celebrate, it could serve to break that strong psychological support.

Please note: Today is a public holiday in the Eurozone so volumes on some markets may be muted throughout the afternoon.

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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Market Overview

Asian Market Update – Monday: Bitcoin flirts with $8,000; Asian stocks in red

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The Big Question: Are investors’ confidence in bitcoin growing?

Prices of main cryptocurrencies were pointing higher during early trading on Monday, with bitcoin flirting with the $8,000 level throughout the morning.

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The price of bitcoin was down slightly for the day to trade just above the $8,000 mark at the time of writing.

Overnight, bitcoin took a strong upswing, rising from about $7,700 to reach as high as $8,020 at one point, before heading back down. The big surge could indicate that investors are again gaining strong confidence in bitcoin is back in play after recent setbacks, as CCN reported yesterday.

Still, there are new reports, citing supposedly leaked government documents, suggesting that the government of Xinjiang, China has urged local governments to “support bitcoin mining more cautiously.”

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The leaked document, which was reviewed by Hacked, said that bitcoin mining is not actually a cloud computing service, which the government there supports, and that bitcoin mining does not leave any product behind to benefit local economy.

The document reveals an overall negative attitude from the Chinese authorities towards crypto mining, although it also says that the activity will not be banned outright as of now.

The price of ethereum, meanwhile, gained 0.87 percent to about $357 before midday.  Ethereum surged on Saturday from about $326 to as much as $364 on Sunday. Ethereum has shown some strong momentum that prompts some to predict it’s ready for a catch-up run with bitcoin.

Litecoin Monday morning added 0.77 percent to about $72, following strong performance over the weekend. Litecoin has broken out of its trading range on the daily timeframe on Thursday and appears to be consolidating before the next run-up in price.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,271 -0.56%
China-Shanghai Composite Index 3,354 -0.84%
Hong Kong –Hang Seng 29,161 -0.13%
South Korea – KOSPI 2,530 -0.15%
Australia-ASX 200 5,950 -0.11%
S&P 500 E-Mini Futures 2,569 -0.24%

 

Asian equity indexes were in red territory on Monday morning, following big losses on Wall Street on Friday.

The Nikkei was down 0.56 percent to 22.271 before midday.

In China, the Shanghai Composite Index was down 0.84 percent to about 3,354 before midday. In Hong Kong, the Hang Seng Index was 0.13 percent lower at around 29,161.

The Chinese financial sector is on notice from the government, as top officials started to push for more coordinated, tougher regulations to fend off systemic financial risk – a top priority by the Chinese government.

The latest indication is sweeping guidelines announced on Friday to rein in risks in the asset management sector, which has been growing fast but problematic due to lack of uniform standards and regulatory loopholes. Analysts say this is just the beginning for what they call “an era of big regulations.”

In South Korea, the Kospi fell 0.15 percent to 2,530 before midday.

Down Under, the ASX 200 was down 0.11 percent to 5,950 before midday.

The S&P 500 E-Mini Futures was down 0.24 percent to 2,569.

As things are relatively quiet on the economic data and earnings front, investors’ focus is on the US tax reform developments. The latest news reports said that US Treasury Secretary Steven Mnuchin hinted that a Republican tax reform bill could reach President Donald Trump’s desk by Christmas.

But many remain cautiously optimistic as at least two Republican lawmakers voiced skepticism about the plan.

Currencies

The Japanese yen gained 0.07 percent the US dollar at midday Monday to 112.01 per dollar.

The Chinese yuan lost 0.15 percent against the US dollar at 6.6346 per dollar.

The Australian dollar also lost 0.19 percent on the dollar, changing hands at 1.3235 per dollar at midday.

Commodities

WTI Oil was down 0.07 percent to $56.74 per barrel.

Brent Crude lost 0.21 percent to $62.58 per barrel.

Gold was down 0.15 percent to $1,291 an ounce.

Business News across Asia

In China, online giants are going offline. E-commerce giant Alibaba Group on Monday announced that it would invest about $2.9 billion for a major stake in China’s top grocer Sun Art Retail Group Ltd.

Take Away: This is part of a broad strategy that Alibaba has called “New Retail,” which is a huge project aimed at integrating online with offline retail. Unmanned physical retail stores have already been set up in Shanghai as part of this push.

In Japan, the latest trade data showed that the world’s third-largest economy is set to see economic recovery in the last quarter of 2017. Official data showed on Monday that exports grew 14 percent in October from last year.

Take Away: The Japanese economy grew 1.4 percent in the third quarter, beating the forecast because of strong external demand from China and elsewhere. Demand is set to remain strong in the fourth quarter, reports say.

Featured image from Pixabay.

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Market Overview

Week in Review: Bitcoin Returns to Record Highs, Stocks Falter Amid Volatility

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The battle of the bitcoins raged on this week, with the original blockchain gaining the upper hand en route to new highs. Bitcoin’s record-setting run took the broader cryptocurrency market to new peaks, with the total market cap surpassing $230 billion for the first time.

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Equity markets were choppy this week, as investors mulled a controversial debate over U.S. tax reform. Earnings have been mostly positive, with Wall Street wrapping up another quarter of solid year-over-year gains.

Energy markets rebounded sharply on Friday after a soft week. Precious metals also popped as the dollar lost ground against a basket of world currencies.

Bitcoin Hits $8,000

Bitcoin once again dominated the spotlight this week as prices crossed $8,000 for the first time . BTC/USD reached an intraday high of $8,011.19 on Friday, and was last seen trading at $7,716 for a weekly gain of 17%.

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Bitcoin Cash (BCH) settled at $1,185 on Friday for a weekly gain of 21%. Most of the advance occurred on Friday as bitcoin’s alternative regained momentum. At this time last week, BCH was trading near record highs after backers of Segwit2x abandoned their hard fork. Since the hard fork was shelved, BTC and BCH have had multiple instances of inverse trading.

Altcoins Gain Momentum

The market’s leading altcoins also made a move higher this week, with Litecoin reaching two-month highs. LTC/USD broke above $73 on Thursday before paring gains over the next 24 hours to trade around $66.72. The coin returned more than 13% for the week.

The ether blockchain also caught a tailwind, with ETH/USD reaching a high of $345. By Friday, Ethereum was trading at $331 for a weekly return of 11%.

Ripple, another highly active altcoin, spiked more than 45% in the week through Thursday before it too pared gains the following session. XRP/USD climbed 10% over the five-day period to settle around 0.2221.

Stocks Slip in Volatile Trade

U.S. stocks booked narrow weekly losses as the threat of a technical reversal loomed large for investors. Concerns about President Trump’s tax bill also weighed on investor sentiment amid signs that corporate tax cuts will be phased in gradually over a two-year period.

The large-cap S&P 500 Index closed down 0.3% on Friday to settle at 2,578.85. The Dow Jones Industrial Average fell 100.12 points, or 0.4%, to 23,358.24 on Friday. That was its second triple-digit loss of the week.

Both indexes recorded their second straight week of declines.

A measure of 30-day volatility known as the CBOE VIX spiked to three-month highs during the week, but eventually settled relatively flat. Vol briefly traded above 14.00 on Wednesday, before reversing most of those gains in the back half of the week. The VIX, which trades on a scale of 1-100, closed at 11.43 on Friday.

Commodities Return to Strength

Commodity markets finished the week on a positive note thanks in part to a weaker dollar. The U.S. dollar index (DXY) settled down 0.3% in the final session of the week.

U.S. West Texas Intermediate (WTI) crude for December settlement rose 2.6% on Friday to close at $56.55 a barrel, largely overcoming a three-day skid. Brent crude, the international futures benchmark, closed up 2.2% on Friday to settle at $62.73 a barrel.

Precious metals surged on Friday, with December gold fast approaching the all-important $1,300 price level. The futures contract climbed $18.30, or 1.4%, to settle at $1,296.50 a troy ounce on Friday.

Comex silver futures also shot up on Friday, adding 30 cents, or 1.8%, to $17.37 a troy ounce. Gold’s premium over silver declined sharply as a result.

In addition to a slumping dollar, speculation that the Federal Reserve may hold off on raising interest rates next month also appears to have factored into the rally in precious metals. Although the chances of a rate hike are extremely high, traders are lowering their bets slightly in anticipation of economic data. The 30-day Fed Fund futures prices imply a 91.5% likelihood of liftoff next month.

Earlier this month, President Trump appointed Jerome Powell to head the Fed at the conclusion of Janet Yell’s  term in February. Although Powell will provide a sense of continuity, he is also looking to reform the Fed’s communication process. This could mean adjusting or doing away with the now infamous “dot plot” chart of interest rate expectations.

The Week Ahead

With bitcoin continuing to flirt with all-time highs, investors can expect another active week for the crypto market.

On the economic calendar, a steady stream of market-moving events headlined by European and U.S. data will make headlines Market volumes are expected to dip somewhat during the latter half of the week as U.S. investors break for the Thanksgiving long weekend.

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. 

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Cryptocurrencies

Robbing from the Poor to Feed the Rich

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As we see the astonishing rate of bitcoin adoption accelerate throughout the globe, one of the key things to watch are region specific updates.

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Japan is already well on their way to full integration but several small countries have already outlawed it outright. In my opinion, the key region to watch right now is India.

It’s been one year since Prime Minister Modi took the drastic step to basically outlaw cash and the citizens are still struggling to adjust. So far they’re mainly relying on credit cards but some are still using old bank notes on the black market.

So this headline is particularly interesting at the moment.

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Of course, the government doesn’t necessarily have to respond to the court’s wishes with any real action but it’s comforting to know that they’re pushing it forward.

The price of bitcoin climbed to a new all time high of $7,965 following this announcement before pulling back slightly this morning.

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of November 17th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

All stocks are green this morning. Wall Street gave an appropriate salute to Washington DC and the stocks went higher.

Republicans were easily able to get their new tax bill through the House of Representatives and now face a tough battle when the bill reaches the Senate. House Republicans have now proved that they’re willing to sell their souls for a win. This bill, on the face of it will have the effect of depriving 4 million of the poorest Americans of their healthcare in order to drastically reduce taxes on the wealthy.

This is the definition of robbing from the poor to feed the rich.

Of course, many souls on Wall Street are already involved in a long-term lease with the Devil. We can see here that the S&P500 was able to erase five days of losses in about five hours.

Ripple + American Express

Ripple caused waves yesterday as two major financial firms announced that they will now start using their service. American Express and Santandar Bank will use the Ripple blockchain to open a blockchain payments wormhole between the US and the UK.

The price of Ripple’s XRP tokens spiked on the announcement. However, the excitement wore off pretty quickly when it became clear that the new payments channel will likely not use XRP in the initial stages.

Here we can see the initial spike from a stable rate of 20.5 cents per token to as high as 27.1 cents per token in just under an hour.

Still, the fact that these two very large financial institutions are partnering with this particular startup is astonishing and should be seen as a positive step both for the Ripple network and the entire crypto community.

Astonishing growth continued…

Over the past 24 hours, including a slight pullback, the value of all crypto-assets has risen by an additional $5 Billion. Over the past month, the total market cap figure has gone from $173 Billion to $225 Billion this morning for a total industry growth of 30%.

The weekends have proven to be particularly volatile in the crypto-markets so I’d like to wish you an astounding weekend ahead.

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 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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