Financial markets in turmoil, Bitcoin up 17%

6 Aug 2019 15:00
Independent Reserve Trading Desk

Market Update 30th July – 6th August 2019

Welcome back to another Australian crypto market update.

With stock markets around the world falling - $38 billion was wiped from the ASX yesterday - this week's spike in the Bitcoin price has reinforced its value as a hedge against distress in traditional markets. Bitcoin has outperformed the S&P 500 by a factor of ten so far this year.

In Markets

It's been a massive week for Bitcoin after a rocky July, with the number one cryptocurrency increasing 24% over the past week to trade above $17,400. It's up more than $1200, or 7.7%, in the last 24 hours alone. Altcoins are also rising, albeit more slowly: Ethereum is up 11.2% this week, Ripple (4.8%), Bitcoin Cash (13.3%), Litecoin (8.7%), EOS (7.9%). Stellar lost 0.3%.

In Headlines

Bullish news for bitcoin

This week the US Federal Reserve cut interest rates by 25 basis points for the first time in Bitcoin's history. President Donald Trump announced 10% tariffs on another $300 billion of Chinese goods and the Chinese yuan fell to its lowest level against USD in a decade. Many analysts attribute the Bitcoin spike to Chinese investors seeking out safe haven assets like BTC and gold. However, analyst Alex Kruger argues the price rise may actually be a 'self-fulfilling prophecy'. Either way, Bitcoin is up 17.6% since Trump's tariff tweet on Friday.

Opportunity cost of not holding digital gold

Delphi Digital has shared a few key take aways from their recent quarterly macro update. The quick version is that amidst market turmoil, slowing growth, weak inflation and negative interest debt, Bitcoin is cementing its value proposition as 'digital gold'. "The opportunity cost of not holding at least a small allocation in Bitcoin grows by the day," they note.

Litecoin halving

The Litecoin block reward halved in the past 24 hours to 12.5 LTC. The price has increased around 330% this year, but those who jumped in recently in expectation of a post halving surge may be disappointed. Last time around it faced a post halving sell off and it's down 18% over the past month. Founder Charlie Lee predicts a week of turmoil as some miners become unprofitable and close down.

Women make up one in five investors

Women are starting to enter the traditionally male dominated crypto space in large numbers, if a new survey from Europe is any guide. It found women make up 22% of investors and they're more likely to be in the top 10% of earners than their male counterparts.

Mining difficulty and price

Analyst Willy Woo has developed a new Bitcoin price indicator called the Bitcoin Difficulty Ribbon. He hypothesizes that miner capitulation in the wake of increasing difficulty reduces selling pressure and enables bullish price action. Mining difficulty is currently at record highs over 9 trillion hashes per second - very difficult indeed.

That's all from us. Until next week, happy trading!

Independent Reserve Trading Desk

Subscribe to our weekly market updates

Follow us on WeChat to get our weekly updates in Chinese.