The Voyager Weekly Round Up
The US-China trade war escalated to new highs this week as China let its currency fall under 7 Yuan to the dollar after announcing a ban on all U.S. agriculture imports. The latest move by China has many, including President Trump, accusing China of manipulating the Yuan to an 11-year low to offset the United State’s most recent round of tariffs.
The trade showdown Monday dealt a blow to the U.S. economy. The DOW closed down 767 points, the S&P 500 lost 87 points, and the NASDAQ fell 278 points, resulting in the largest one-day sell-off in more than a year.
A Safe Haven
As the stock market sent shivers down the spines of investors, Bitcoin climbed more than 7 percent on Monday, breaking $11K for the first time in nearly a month.
Bitcoin’s negative correlation to the DOW, S&P, and NASDAQ is becoming harder to ignore, and crypto is rightfully gaining a reputation as a “safe haven” investment. A new report from SFOX found that amidst the China-US trade war turmoil this week, Bitcoin showed a stronger negative correlation to the traditional market than Gold. The chart below shows the S&P 500 in comparison to Gold and top cryptocurrencies over the last 30 days.
Some experts believe Bitcoin’s latest rally is in large part because Asian investors are flocking to the crypto market as a hedge against economic instability in China.
With the yuan over 7.0, an FX war, instability in HKG and the beginnings of capital flight, $Btc rally could have real legs.— Michael Novogratz (@novogratz) August 5, 2019
Bitcoin’s global reach makes it less likely to be negatively affected by political turmoil like the trade wars. It’s also important to acknowledge that Bitcoin can’t be manipulated the way the Yuan allegedly has.
Currency manipulation, the act of raising the price of imports and subsidizing exports to make an economy more internationally competitive, has been done by governments throughout history. Because Bitcoin is a decentralized network and is not back by a government, it would be nearly impossible to manipulate. There’s also a set supply of Bitcoins, making it scarce in the same way a precious metal like Gold is.
Bitcoin has the fundamentals of a “safe haven” investment, but the young currency has yet to live through a true recession. Only time will tell for sure if crypto is negatively correlated to the traditional market.
The Bitcoin price soared from $10,506.38 to $11,774.50 over the weekend, an increase of roughly 12%. Most of the price action took place early Monday morning, as the Chinese yuan dropped sharply against the U.S. dollar, trading at 7 yuan per dollar for the first time in more than a decade. Read more.
Crypto Rally Sparked by Investors Seeking Hedge Against Rising Global Risks, says Bitcoin Bull Tom Lee
Bitcoin bull Tom Lee told CNBC on Monday that cryptocurrency is a hedge against global risks, amid the U.S.-China trade conflict and currency war. The founder and head of research at Fundstrat explained on “Fast Money ” that “bitcoin has done something very interesting this year. Read more.
The market for crypto ATMs has been growing steadily. Last month crypto ATMs experienced their largest net increase in a single month with 292 installed globally. To date there are 5,353 ATMs across 81 different countries. Read more.
Despite being an economic leader, many within the crypto industry argue that the United States in particular has not yet gained a leading position among governments actively working to regulate this new technology. Read more.
One of the biggest arguments in favor of cryptocurrencies is that they are hard to forge. It's possible - throw enough computation power at it and you could in fact do it, but the salient point is that the cost to do so likely outweighs the value of the coin. Read more.
The cryptocurrency market is in the middle of a recovery phase from the extreme volatility in July. The total market capitalization is back above $300 billion. In fact, it is standing only $1 billion lower from $311 billion recorded on Monday. Read more.
Kevin O’Leary, the judge of the popular business reality show Shark Tank, has slammed Anthony Pompliano for allocating half of his wealth to bitcoin. “Shame on you,” the television personality told Pompliano on the sidelines of a CNBC Squawk Box debate about bitcoin’s performance against gloomy macroeconomic periods. Read more.
This Bank Gave Bitcoin to Its Entire Staff. Now It’s Taking Crypto Clients
A small bank in New York City has started doing business with cryptocurrency firms, joining the very short list of U.S. financial institutions to embrace the sector. Read more.
About 15 global jurisdictions, including the G7 countries, will reportedly develop a system for tracking crypto transactions to prevent illicit uses of cryptocurrencies. Read more.
Ripple price is struggling to hold a key support against the US Dollar, while bitcoin is trading with a positive bias. XRP price might bounce back as long as above $0.3150. Read more.