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Week in Review

Week in Review: South Korea Triggers Crypto Meltdown; Stock Rally Reaches Epic Proportions

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It was a roller coaster week for cryptocurrencies, as investors misread South Korea’s aim to regulate the market as an all-out ban on crypto exchanges. Meanwhile, U.S. stocks put up huge gains as earnings season kicked off.

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Commodities rallied on a weak U.S. dollar, with crude futures climbing above $70 a barrel for the first time in three years.

Cryptocurrencies Plunge as South Korea Mulls New Regulations

Cryptocurrencies suffered a brisk selloff on Thursday on reports that South Korea was considering new reforms to stamp out speculation from the market. Investors had initially believed that regulators were looking to ban crypto exchanges all together. It would later surface that the government was actually looking to ban anonymous trading and ensure banks do not settle unverified cryptocurrency transactions.

Local media group Yonhap News agency provided more clarity on the proposed legislation:

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“Under the new measure, only real-name bank accounts and matching accounts at cryptocurrency exchanges can be used for deposits and withdrawals, while the issuance of new virtual accounts to cryptocurrency exchanges will be banned.”

The cryptocurrency market briefly fell more than $100 billion on Thursday, as investors exited their bitcoin and altcoin positions. At one point, all but five of the top 100 cryptocurrencies were trading in the red, based on data provided by CoinMarketCap. (It’s important to note that CoinMarketCap now excludes South Korean exchanges from its daily volume and pricing data.)

Markets were in recovery mode on Friday, with the total coin value climbing back above $711 billion.

Stocks are Sizzling as Earnings Season Begins

Wall Street put up huge gains this week, as the major indexes closed at new records in four of five sessions. This culminated in back-to-back 200-point gains for the Dow Jones Industrial Average.

On Friday, the blue-chip index closed at 25,803.19, with all but six of its 30 components registering gains.

The broader S&P 500 Index rose 0.6% to 2,786.24. Meanwhile, the Nasdaq Composite Index added 0.7% to close at 7,261.06.

With the most recent gain, the major indexes have added between 4.2% and 5.2% since the new year.

Interestingly, the CBOE VIX Volatility Index has increased in six of the last seven weeks. The so-called “fear index” closed at 10.16. Despite the recent string of gains, it’s still too early to conclude whether volatility is making a comeback.

Fourth-quarter earnings season is also off to a good start, with more than two-thirds of S&P 500 companies reporting better than expected profit results, according to FactSet. While only 5% of S&P 500 companies have reported so far, their blended earnings growth rate is 10.2%.

Oil Hits $70

Oil prices extended their recovery over the past five days, as prices rose to their highest levels in three years.

Brent crude for February settlement briefly traded above $70 a barrel in the latter half of the week before settling at $69.88 a barrel on London’s ICE Futures exchange. The West Texas Intermediate (WTI) benchmark for U.S. crude also put up strong gains, eventually settling at $64.48 a barrel on the New York Mercantile Exchange.

Crude markets on Friday were unfazed by U.S President Donald Trump extending sanctions relief to Iran. One of the primary catalysts for oil prices had been the threat of new sanctions on Tehran, which would have likely affected its crude exports.

NAFTA on the Rocks

One of the world’s largest free trade agreements appears to be in limbo after two Canadian government officials said they were increasingly convinced President Trump will exit NAFTA. The North American Free Trade Agreement (NAFTA) has guided continental commerce for more than two decades.

President Trump has called NAFTA a horrible treaty for the United States given the country’s ongoing trade deficits with both Canada and Mexico. It is unclear whether Trump intends to pull the plug on the deal or use it as a bargaining chip.

The sixth and penultimate round of negotiations between Canada, the U.S. and Mexico will take place in Montreal later this month.

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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4.5 stars on average, based on 417 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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Week in Review

Week in Review: Cryptocurrency Freefall Erases $40 Billion in Market Cap

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Cryptocurrencies headed for their third consecutive down week Friday, with some major coins shedding 10% or more. Bitcoin and the major altcoins fell to their lowest levels in about six weeks as institutional traders awaited regulatory clarification before entering the market.

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Geopolitics and strained trade relations between China and the U.S. triggered a flight to safe havens, with gold prices reaching their highest level in ten days. Stocks finished slightly higher after Federal Reserve meeting minutes showed no urgency on the part of policymakers to hasten the pace of interest rate hikes.

Crypto: The Great Unwind Continues

Cryptocurrency prices collapsed this week, with the total market cap bottoming near $326 billion as bitcoin threatened a bearish reversal and altcoins suffered a brisk selloff. By Friday, the market had recovered near $330 billion, having declined more than $55 billion from its recent peak.

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Bitcoin bottomed below $7,300, with bounces limited to the mid-$7,500 range. The world’s largest cryptocurrency saw its share of the total market rise above 38% as other coins fell.

Compared with seven days ago, BTC prices are down more than 7%, according to data provider CoinMarketCap.

Cardano was the biggest decliner in the top ten, falling more than 15% week-on-week. Bitcoin cash plunged more than 12% and Ethereum shed 11.5%.

Crypto Bulls Maintain Their Optimism

Bitcoin bull Tom Lee described the recent slide in prices as “typical market volatility” as he held firm to his long-term price forecast. Fundstrat’s head of research still believes bitcoin will reach $25,000 this year as institutional interest heats up and mining remains profitable.

Lee also reminded investors that the vast majority of bitcoin’s yearly gains are concentrated over a ten-day period. Without those days, bitcoin is down about 25% each year.

“So as miserable as it feels holding bitcoin at $8,000, the move from $8,000 to $25,000 will happen in a handful of days,” Lee told CNBC earlier this week.

John McAfee has bet on bitcoin reaching $15,000 by the end of next month, a virtual doubling of today’s prices. The technologist has also predicted huge gains for bitcoin cash and EOS.

Geopolitics Drive Markets

Geopolitical tensions weighed on investors this week after U.S. President Donald Trump cancelled a planned summit with North Korean leader Kim Jong-un.

The mood improved on Friday as Pyongyang expressed its willingness to still go ahead with the meeting, which was scheduled for June 12 in Singapore.

“Very good news to receive the warm and productive statement from North Korea,” Trump tweeted Friday. “We will soon see where it will lead, hopefully to long and enduring prosperity and peace. Only time (and talent) will tell!”

Stocks resumed their slide on Friday as gold prices held near ten-day highs. Meanwhile, oil prices plunged after Russia said it was content with $60 a barrel oil.

“We’re not interested in an endless rise in the price of energy and oil,” Putin told said at the International Economic Forum in St. Petersburg, adding that Russia and OPEC do not plan to extend output cuts. “If you asked me what is a fair price, I would say we’re perfectly happy with $60 a barrel.”

The Week Ahead

After a thunderous rally in April, the month of May is shaping up to be a dud for crypto traders. It remains to be seen whether the downtrend will continue heading into June or whether a bounce back is in order. There are no major events scheduled in the cryptocurrency market next week, although developments concerning regulation and institutional adoption will continue to sway investors.

In terms of economic data, revised U.S. nonfarm payrolls and revised GDP figures will be in the spotlight next week. The Commerce Department will also issue the latest reading of core personal consumption expenditures, the Federal Reserve’s preferred measure of inflation.

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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4.5 stars on average, based on 417 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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Week in Review

Week in Review: Another Down Week for Cryptocurrencies as Consensus Summit Fails to Inspire Rally

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Digital currency prices headed for their second down week in a row, as the Consensus blockchain summit failed to spark its annual rally despite being the largest crypto event on record. Altcoins shouldered the heaviest burden of the decline, while bitcoin briefly fell below $8,000 for the first time in a month.

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Commodities and currencies were the other big stories this week, as oil prices surpassed $80 a barrel for the first time since 2014 and the U.S. dollar rose to fresh five-month highs.

Stocks struggled for direction this week, as rising bond yields and geopolitical tensions undermined risk sentiment in the financial markets.

Crypto Prices Sink

Cryptocurrencies were down as much as $20 billion in market cap over the past seven days despite a virtuous news cycle shining a positive light on blockchain adoption.  The total market capitalization bottomed near $361 billion on Friday, mere days after the market hit highs above $411 billion.

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At the time of writing, crypto assets were collectively valued at $376 billion, according to CoinMarketCap.

Altcoins incurred heavy losses this week, with bitcoin cash experiencing a brisk sell-off in the wake of its most recent hard fork upgrade. Ripple XRP, EOS and Litecoin also booked losses for the week.

Bitcoin briefly fell below $8,000 Friday but has since recovered to trade around $8,250. BTC now accounts for roughly 37.4% of the total crypto market.

Consensus Fails to Inspire Rally

Over 7,000 blockchain enthusiasts crowded Midtown Manhattan this week for the annual Consensus conference. The three-day event, which featured panelists from industry, government and academia, was well receive by the crypto community. However, unlike previous years, the 2018 summit failed to inspire a price rally that many had anticipated.

Bitcoin values had risen between 10% and 69% during the last three Consensus summits, leading several analysts to forecast even bigger gains for 2018. Tom Lee of Fundstrat Global Advisors told clients before the event that Consensus 2018 will likely see a crypto-price rally that exceeds the previous three summits.

Though the event failed to generate price gains like many had predicted, the “post-Consensus” rally usually takes months to peak.

There has been no shortage of positive developments from the crypto industry in recent weeks. On Wednesday, Goldman Sachs-backed Circle announced it was launching a cryptocurrency pegged to the U.S. dollar in an effort to streamline merchant payments through digital currency. IBM and fin-tech startup Veridium Labs have also announced a joint cryptocurrency that seeks to monetize carbon credits.

Rising Bond Yields Boost Dollar

The U.S. dollar dominated the currency markets this week, as investors continued to rally behind expectations of faster rate-hikes by the Federal Reserve. The dollar index (DXY), which tracks the performance of the greenback against a basket of six currencies, reached its highest level in five months.

DXY closed at 93.67 Friday, its highest settlement since Dec. 18.

Rate-hike expectations are firmly embedded in U.S. government bond yields, which rose this week to their highest levels since at least 2011. The yield on benchmark 10-year U.S. Treasuries peaked above 3.1% for a gain of about 14 basis points this week. Yields rise as debt prices fall.

A stronger dollar couldn’t contain the continued rise of energy prices, as Brent crude futures topped $80 a barrel for the first time since 2014. The international futures benchmark has added more than 12% over the past month, with recent gains driven by geopolitical concerns tied to the Iran nuclear deal.

U.S. President Donald Trump exited the nuclear deal last week, putting Iran back under sanctions.

The Week Ahead

Crypto prices have faltered for two consecutive weeks, putting investors on high alert for a possibly bigger reversal in the short term. However, the balance of news coming out of crypto space has been overwhelmingly positive, which suggests that a recovery could materialize.

Economic data, Federal Reserve speeches and the minutes of the most recent FOMC meetings will also generate market-moving headlines next week. Developments on the geopolitical front involving Iran and North Korea could also influence markets.

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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4.5 stars on average, based on 417 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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Week in Review

Week in Review: Cryptocurrencies Surrender Gains as Stocks Surge

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Stocks and cryptocurrencies diverged sharply this week, as capital poured out of the digital asset class following a month of gains. Stock markets received a boost from strong corporate earnings, the easing of geopolitical tensions and tamer than expected inflation for the world’s largest economy.

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Cryptocurrencies Give Back Gains

The combined value of cryptocurrencies plunged more than $65 billion this week, with the bulk of the decline occurring Friday after Korean prosecutors raided the country’s largest digital currency exchange.

South Korea’s UpBit has been raided by federal authorities over suspicion of fraud, Reuters reported Friday, citing local news sources. The company issued a formal statement on its website informing traders that it is complying with the investigation and that all transactions and withdrawals are operating normally.

UpBit is the world’s fourth largest crypto exchange by volume.

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Bitcoin prices plunged to three-week lows after spending most of the week above $9,000. Bitcoin bottomed near $8,500 Friday but later recovered to trade at $8,620.

The vast majority of coins in the top-100 lost double digits on Friday, including Ethereum, Ripple XRP and bitcoin cash. The combined value of all cryptocurrencies reached a low of $379.8 billion Friday before recovering near $392 billion.

Despite recent declines, cryptocurrency prices are still being underpinned by positive fundamental drivers, including greater institutional adoption and key acquisitions of major exchanges. That said, the bulls have certainly lost momentum with the recent UpBit news souring investor sentiment.

Stocks Book Solid Gains

U.S. stocks capped off one of their best weeks since January, with energy shares leading the market higher.

All of Wall Street’s major indexes finished in the black, with the Dow Jones Industrial Average notching its seventh consecutive daily advance Friday. The blue-chip index closed at 24,831.17, its highest since March. For the week, the Dow added 2.4%.

The broader S&P 500 Index gained 2.6% for the week to close at 2,727.72. Meanwhile, the technology-focused Nasdaq Composite Index surged 2.7% over five days to finish at 7,402.88.

Wall Street’s impressive rally was accompanied by a sharp fall in volatility. The CBOE VIX, commonly known as the “fear index,” fell to its lowest level since January.  The index, which trades on a scale of 1-100, closed at 12.65 on Friday.

Geopolitics in Focus

Developments on the geopolitical front were front and center for commodity traders this week after President Trump decided to exit the 2015 Iran nuclear deal. U.S. fallout from the deal means Iran will once again be subject to economic sanctions, which includes limitations on crude exports.

U.S. companies were also hit hard by the resumption of Iranian sanctions, with Boeing and Airbus said to have lost a combined $40 billion in contracts with the Islamic Republic.

However, on the subject of North Korea, investors had much more to be optimistic about after President Trump confirmed that he would meet with Kim Jong-un at a summit in Singapore next month.

The two Korean nations have pledged peace and denuclearization on their peninsula following U.S. and Chinese diplomatic intervention.

The Week Ahead

A stalled cryptocurrency rally will have some speculators concerned about the voracity of the spring recovery. Last week, crypto assets appeared poised to test the $500 billion market cap level. Price action over the last five days showed relative stability with the bulk of the declines concentrated on Friday.

Equities have returned to health following a prolonged period of volatility. However, the real test will come after corporate earnings season as investors contend with rising interest rates. The yield on the benchmark 10-year U.S. Treasury note exceeded 3% this week, signaling renewed concern over the health of the U.S. economy.

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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4.5 stars on average, based on 417 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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