The Revolution is Here

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

Almost made my eyes water.

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

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.

Author:
Senior Market Analyst at Etoro.com.

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