The Bigger the Hit to a Country’s GDP, the Higher the Stock Market Jumps

The US economy shrank by an annual rate of 32.9% between April and June, the sharpest contraction triggered by the coronavirus pandemic since the second world war.

This economic shock in April, May, and June was over three times as sharp as the previous record of 10% in 1958 and about four times the worst quarter during the Great Recession.

“This is something we have never seen before,” said Jason Reed, assistant chair of finance at the University of Notre Dame.

“At first I felt it was like a natural disaster that had hit the entire country at the same time. Now it is evolving into something worse than that.”

The record-settling fall in the gross domestic product, the broadest measure of economic activity compared to the same time last year after for the second week in a row following a four-month decline 1.43 million Americans filed for unemployment benefits last week.

Economists expect the economy to recover sharply later this year, but the recent rise in infections across the US is clouding that outlook.

Interestingly, during this time, the S&P 500 jumped 24% thanks to all the money printing the Federal Reserve did. After the initial $3 trillion stimulus package, another trillion-dollar aid is expected soon. For now, Congress is struggling to strike a deal on the new round of financial support.

On Wednesday, the Fed said the US economy is facing significant challenges from the coronavirus pandemic and vowed to continue to take aggressive action to support the economy to recovery.

The US’s GDP report came as Germany, Europe’s largest economy, recorded a slump in economic growth, contracting by 10.1% in Q2, the most significant decline since 1970, while its stock market DAX jumped 28%.

The fall in GDP came as parts of the US economy shut down in an attempt to halt the spread of coronavirus across the country. The closures led to a historic number of layoffs that sent unemployment soaring to levels not seen since the 1930s Great Depression.

Now, as the first month of the third quarter comes to an end, the S&P 500 jumped 3.6% in July. But it was precious metals that stole the show.

Gold jumped 10.6% this month and broke the 2011 record to hit a new all-time high in Q2. This has been in part due to a 1.6% decline in the US dollar index, which further hit over two-year low with a 4% decrease in July.

Meanwhile, bitcoin the ‘digital gold’ woke from the slumber just last week and spiked 23.6% in July, after a 68% jump in Q2, now trading above $11,300.

“Gold, Silver, Bitcoin all hitting, or going, to new ATH,” said Max Keiser adding the bad news is all of this is because,

“global central banks are staging a debt-for-equity coup disenfranchising 7.6 billion people who will be left for dead unless they have some Gold, Silver, Bitcoin.”

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Author: AnTy

Bearish Catalysts for Bitcoin Price

This week, Bitcoin is ranging between $9,050 and $9,500. Currently, we are trading just above $9,200 after yesterday, Bitcoin’s price dropped $150 in seconds on Bitstamp, trading well below the rest of the market.

On the weekend, the bitcoin market has gone quiet, with just about $700 million in ‘real’ trading volume.

This ranging is not good for bitcoin but is bullish for altcoins that are already feeling the greens.

According to trader Crypto Michael, until BTC breaks out of the range, “anything between $8,500 and $10,500 is playground time for altcoins, and that could last a few months longer.”

Currently, the digital asset is holding support above the $9,000 barrier, and a breakthrough of $9,300 could push it towards $9,600.

However, Bitcoin futures aren’t looking good, and their position on CME is identical to the time when BTC crashed in March.

However, analyst FilbFilb doesn’t think “there will be a dump anything like last time.”

In March, bitcoin crashed in line with the rest of the global markets during the spreading coronavirus pandemic. Currently, the markets are flying with tech stocks in the lead.

Tail Risks

Some people are still tracking the S&P 500’s movement during the 1929 crash with the ongoing one, which is still in sync.

Although markets are surging, the risk of inflation and spike in coronavirus cases remains a tail risk.

There have been many days that some states in the US continue to see a record number of new infections. This further puts a smooth reopening at risk.

With the Fed using extraordinary measures to stimulate the economy, inflation is also on the radar of experts. Although a sudden spike is not called, UBS strategist Bhanu Bajwa feels it could be a potentially damaging long-shot scenario.

“We think the economy is currently far from unleashing these inflationary forces, but with COVID-19 cases globally and in the US still rising, we cannot yet completely rule out this tail risk,” he said. “Further, the inflation surge could happen quickly and with little warning.”

The additional round of stimulus checks, tax reductions, PPP loans, and enhanced unemployment insurance benefits may aid the inflation outlook. And an inflation spike is not good for stocks. Rather could be disastrous. In the 1970s, inflation doubled to about 11% that resulted in a 40% decline for the equities market.

However, it would be interesting to see how such a scenario, if it happens, would affect bitcoin, which has been called an inflation hedge by the likes of billionaire investor Paul Tudor Jones but remains in high correlation with SPX.

Tether Debacle

Another bearish catalyst for bitcoin is Tether, whose sister company Bitfinex must face NY suit in an $800 million stolen funds, as ordered by an appeals court this week.

Tether co-founder Brock Pierce, who recently announced that he is running for US President, said he is unsure whether the stablecoin will be able to weather the latest assault from regulators and government officials.

“Tether is, I think, one of the most important innovations in currency, but it also seemed like one of the higher risk businesses,” Pierce told Bloomberg. He hasn’t been involved with Tether since 2015.

Just this week, international regulators also recommended that stablecoins have to take greater steps to prevent money laundering and terrorism financing.

“We will work with and listen to the FATF (Financial Action Task Force) in order to continually improve our compliance function as these markets develop,” said Stu Hoegner, general counsel for the Bitfinex crypto exchange.

He also said the existing compliance practices are already the best in the industry. About the lawsuit, he just said Bitfinex “respects” the court’s order.

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Author: AnTy

Chinese Shipping Giant, COSCO, to Use Alibaba’s Ant Group Blockchain for Maritime Logistics

  • Following a successful partnership between the shipping giant, Maersk, and IBM to set up an enterprise blockchain.
  • Ant Group and COSCO become the latest shipping-tech partnership to integrate a blockchain to ease logistics in maritime transport.

According to a report by Technode, a partnership between Ant Group, a subsidiary of Alibaba and China’s shipping line, and the third-largest global shipping line, COSCO has been announced. The two giants will begin an exploration of how Ant blockchain, the former’s blockchain solution, can be integrated into shipping to track and trace goods in a bid to reduce the clog in logistics across ports.

Blockchain technology provides a digital transparent ledger that reduces the costs associated with logistics across maritime businesses. The platform will connect the maritime cargo industry, which accounts for 90% of trade across the world, networking cargo owners, customs agencies, vessel operators, ports, and logistics companies.

Ant Group is heavily invested in the blockchain field, providing different industry sectors with decentralized technology solutions. At the tail end of 2019, Ant Financial announced it had processed over $6 billion in medical bills on blockchain in a year since its partnerships with big pharma companies, including Bayer.

The entry into the shipping industry will see the blockchain platform compete with IBM and Maersk’s blockchain platform named TradeLens. The blockchain-based maritime logistics platform has seen exceptional growth over the years since launch in 2018, adding top shipping ports including Oman’s top port and India’s top private port operator, Adani Ports and Special Economic Zone Limited (APSEZ).

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Author: Lujan Odera

Bitmain Power Struggle: Truce is Over & Fight for Control Resumes; Bitcoin Miners Could Suffer

The struggle between the co-founder of bitcoin’s biggest miner manufacturer is not looking to end anytime soon. It hasn’t even been two weeks, and they are back at it.

The fight restarted when Bitmain co-founder Micree Zhan or Zhan Keutan attempted to redirect customer payments to a new bank account in a Wechat post at midnight. Dovey Wan, founding partner at Primitive Crypto tweeted,

“This marks the DEATH of Jihan in the Bitmain power struggle IMO: Bitmain just announced it will change the miner sales payment bank account & wiring info into a company Micree serving as legal representative. Micree now financially takes over Bitmain’s core business.”

It may not be a death blow to Jihan yet, but sure seems like a hard blow to the bitcoin miners who are awaiting their big orders.

The infighting between the co-founders could interrupt the product deliveries as it affects the shipments and supply chain. While some are reluctant to buy bulk orders, it is not stopping others from buying machines from Bitmain.

Last week, Core Scientific announced that the hedge fund Horizon Kinetics extended its partnership with the US-based blockchain hosting provider and upgraded its crypto service to Bitmain Antminer S19 and S19 Pro models.

Recently, Core Scientific purchased 17,000 of the latest generation crypto miners from Bitmain.

Source: Twitter

On Monday, Hive Blockchain technologies also announced that it had ordered 200 Bitmain Antminer S17e 60 terahash per second (TH/s) SHA 256 mining machines to scale up its mining power at its bitcoin mining operation in Quebec.

With the cost for the S17e machines approximately US$950 per unit, the purchase was just under US$0.2 million, and the company is anticipating delivery in July, but that’s to be seen. F2Pool noted,

“The slowdown in hashrate growth may continue, as many of the large hardware orders reported recently won’t deliver until late in the summer.”

So far, both the co-founders are claiming to be the company’s real CEO. While Zhan controls the Shenzhen headquarter and factory Wu has the bank accounts and support of the board.

The rivals did reach an agreement to resume deliveries less than two weeks ago. On June 23, the company even published an article to reassure its customers that they have resolved the issue only to delete it within a few hours.

It hasn’t been 24 hours to Zhan’s document with changed sales information, (including the bank account for payments, after-sale service website, and e-mail address) that another official Bitmain WeChat account associated with Wu revoked the document stating it contained false information.

In the new document also posted on the website, citing “abnormal conditions,” Zu said “criminals” are trying to impose Bitmain representations.

It looks like Wu is here to fight, and customers will also have to pay the price.

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Author: AnTy

Billion-Dollar Craig Wright- Dave Kleiman Case Moves To Court In July; 1.1 Million BTC at Stake

  • The famous “one million Bitcoin” case between self-proclaimed Satoshi Nakamoto, Craig Wright, and Ira Kleiman, brother to deceased, Dave Kleiman, is finally set for trial starting July 6.
  • However, the court is extending the deadline till July 3rd, 2020 for the parties to resolve their claims and present the resolution to court.

The long-running battle between Craig Wright and Kleiman’s estate is taking a swift turn to the courts after a two-year battle of the courts bore no resolutions.

According to the latter, Dave and Craig mined together a stash worth 1 million BTC (~$9 billion) and wished Craig, who has previously admitted to holding the private keys to this mega stash, to relinquish half the BTC the two mined.

However, Craig has come out strongly denying the claims; stating that he mined the whole stash of BTC alone.

On May 1, 2020, U.S Southern District of Florida judge, Reinhart Bloom, declared the trial date is set for July 6, with both legal teams announcing their readiness in participating in the trial.

The set trial will be held during the Court’s two-week trial calendar beginning on July 6, 2020, at 9:00 a.m. at the United States Courthouse, 400 North Miami, Avenue, Courtroom 10-2, Miami, Florida.

Dr Wright’s attorney, Andres Rivero, argues that his client is eager to prove in court his BTC stake.

Rivero further claimed the plaintiffs must be able to prove their 50% stake claim, given Dave and Craig were just friends, which did not entitle any case of sharing the mined BTC. He further said,

“It’s always possible for the cases to be delayed, they could be motions, more requests by the plaintiffs […] But we have opposed all the delays and we’ve always wanted to go to trial.”

A source from Kleiman’s legal team also showed their readiness in presenting evidence and witnesses in court come July 6, brushing off the claims that they were slowing down the process as “absurd.”

The statement from Roche Cyrulnik Freedman LLP, the firm representing Kleiman’s estate reads:

“Any comment that Plaintiffs are responsible for any delays to the trial date is absurd. As Judge Bloom found on January 10, 2020, Craig’s ‘antics and conduct delayed and obstructed the discovery process of this case, wasted valuable time and resources […] and prevented the Plaintiff from obtaining evidence.”

Despite the case moving onto a court date, Craig has yet to provide proof on the claimed 1.1 million BTC coins.

Earlier in the year, reports that the Tulip Trust documents containing the private key to the stash would arrive in a bounded courier never materialized. This led to Craig’s attorneys claiming he does not own the private keys to the coins.

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Author: Lujan Odera

Paxful P2P Exchange Rolls Out Bitcoin Trading With Gold After High User Demand

The Peer-to-Peer (P2P) crypto exchange Paxful has launched trading between Gold and Bitcoin (BTC) in response to customer demand.

The service offers a transfer procedure and a swap option. The parties need to negotiate terms first, after which the transfer of gold will take place in person. The BTC holder has to send the funds into a Paxful escrow until the gold seller confirms the transfer and the receipt is approved. This is when the BTC gets released by Paxful. The process has to take place in 21 days since the payment has been initiated. In case it doesn’t, the parties go through dispute arbitration.

KYC Transfer Protocols to Be Respected

The trades with gold must respect the exchange’s Know-Your-Customer (KYC) transfer protocols if they’re valued at more than $50, says a press release. Paxful has recently started using crypto intelligence tools from Chainalysis. Its CEO, Ray Youssef, says the procedure for gold trading is formal and similar with bank transfers because it’s executed by listing the payment method, whereas the payments are not negotiated on the platform. Here’s what he said on how the service is evolving:

“Our users were already starting to do this on quite a large scale. We weren’t aware of it because it was difficult to track. We actually had to go in and talk to people.”

No Other Crypto Exchange Offers the Feature

The new gold feature is unique among crypto exchanges, putting Paxful on the list of go-to crypto firms when it comes to services that are rather ignored in the industry. Countries like Venezuela, Nigeria, Ghana and Malaysia will be able to benefit from it. Youssef says these countries are usually neglected by companies that only focus on the US and Europe. His exact words about this were:

“The west is not the entirety of the world. The vast majority of humans are outside of the west in emerging markets and they are hungry, they’re not going to let anything stop them – COVID-19, Ebola, they don’t give a damn, they’re going to continue to do business.”

He also predicted that trading goods between people in person is going to be irrelevant in the long run in case of a pandemic, especially in Africa. Meanwhile, Paxful didn’t have a problem with the global shutdown and had in March a 27% increase in registrations.

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Author: Oana Ularu

Bitcoin Demand to Rocket as Fed Pumps $6 Trillion Stimulus to “Bolster” the Economy

US stocks are swinging between gains and losses today after the announcement that White House and lawmakers have reached an agreement on a $2 trillion stimulus package to combat the novel coronavirus. Over 400,00 cases have been reported globally with more than 55,000 in the US and over 69,000 confirmed cases in Italy.

After yesterday’s historic surge of 11%, the Dow Jones Industrial Average was up 0.3% Wednesday. The S&P 500 meanwhile slid 0.7% along with Nasdaq Composite that dropped 1.2%.

Bitcoin mirrored the stocks and surged to $6,990, only to come back down to about $6,600 level which economist and trader Alex Kruger said, “is not a coincidence.”

$6 Trillion needed to “bolster the economy”

The legislation that is to be enacted within days involves $350 billion in loans for small businesses and $500 billion to aid airlines and other large corporations. This biggest fiscal stimulus package in American history is double the one passed in 2009 to fight the Great Recession that further involves $1,200 payment for each adult and $500 per child, for households earning up to $75,000 per year or $150,000 for couples.

The emergency package to bail out the US economy amidst the coronavirus pandemic totals at $6 trillion, said Trump administration economist Larry Kudlow.

This package includes a $2 trillion aid from Congress and $4 trillion in lending from the Federal Reserve.

“This package will be the single largest Main Street assistance program in the history of the United States,” said Kudlow adding it was “urgently” necessary to “bolster the economy.”

“No way your dollars can keep their value”

The crypto community took this money printing by the Fed as an opportunity to point out how this won’t help with the pandemic that has taken over 790 lives in the US.

This isn’t the first time something like this has happened, Zimbabwe went through money printing madness and ended up printing one hundred trillion dollar note that is worth about $60 USD only for them to abandon their own currency to go for the US Dollar.

Interestingly, Rep. Rashida Tlaib’s recent proposal talked about minting 2 one-trillion dollar coins.

Now, the crypto community is pointing out how the stimulus means, “creation of nearly 50 Bitcoins worth of dollars out of thin air. Not 50 BTC, but 50 Bitcoin networks.”

According to the community, this bazooka means demand for Bitcoin. “There is no way your dollars can keep their value after pumping $6 trillion into the system. It’s time to move your fiat into hard money. Bitcoin,” said blockchain consultant Luke Dash.

Bitcoiner Mike Novogratz also pointed out that in the event of “debasement of fiat currencies, monetization of trillions of dollars of debt,” it would be the time for bitcoin.

And if even a portion of this makes it way into Bitcoin, the world’s leading cryptocurrency could easily reach about $100k peak this time.

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Author: AnTy

Securitize and LIFULL Partner to Tokenize the Rural Japanese Real Estate Market

  • A partnership between two companies has announced the completion of a Blockchain Crowdfunding solution in an attempt at solving Japan’s Vacant house crisis.
  • With an almost aging workforce and most of the youth migrating to urban areas in search of job opportunities leaving the countryside properties deserted.
  • It has been reported that two companies have jointly come up with a Blockchain solution in a bid to help solve Japan’s vacant house problem in rural areas.

A partnership between Securitize a compliance platform offering expertise in digital securities, fixed income, and real estate and Social Funding Co has announced the successful completion of a funding platform using digital currencies for real estate investments.

The project was launched by LIFULL and Securitize subsidiary BUIDL. This was before Securitize acquired BUIDL in December 2019 but gave commitments to carry on with existing partnerships. In the course of the project, they were able to prove how more efficient and cheaper crowdfunded Real Estate Funds based on Blockchain turned out to be in comparison to more traditional alternatives.

Securitize CEO Carlos Domingo has expressed excitement at the potential a comprehensive crowd-sourced Real Estate Funds in modernizing Japanese real estate markets.

Rural-Urban Migration

Getting a house for free might sound like a con however Japan faced by an uncommon housing quagmire, the fact that it has more homes than the people expected to live there. With an already aging population (more than 20% of its population aged 70 and older and the birth rate declining), most of the young people have more often than not ended up migrating from rural to urban areas where they can get jobs.

As they move away they leave the countryside deserted with houses abandoned without heirs or new owners dubbed ‘Akiya’. In 2018 a record high of 13.6% properties across Japan was declared Akiyas.

This is seen as a move to attempt to revitalize Japan’s real estate in less desired countrysides as LIFULL explained in a statement. They are positive that renovating and upgrading the homes would prove essential in addressing the vacant housing issue in the country.

“Regional revitalization of real estate crowdfunding is being promoted as a solution to this problem.”

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Author: Lujan Odera

Analyst Calls for More Altcoin Gains Up Until Bitcoin’s FOMO Breakout

  • Bitcoin to see a “relative period of calm movements between $9,500 – $11,500,” says trader Crypto Michaël
  • Bitcoin ranging is good for altcoins, will give them another opportunity to jump higher but only till the BTC gets the FOMO (fear of moving out) breakout

After the 88% surge in 2019, Bitcoin has already surged about 40% in 2020 so far. Last week, the world’s leading cryptocurrency broke above $10,000 level but only to see a healthy retracement to $9,730 and is now trading around $9,800.

Ever since BTC breached $9,000 level in late January, the price has been having green days which has been right at the 3 million range point of control (POC) “what was the most agreed upon fair value for that period,” notes trader Cantering Clark. He added,

“I expect 10.5k but I also expect 9.5k again at some point. If I was climbing a rock wall I would want to constantly re-anchor. Same Idea with assets, build a base.”

Bitcoin to Range in $9,500 – $11,500

Bitcoin has already broken the downtrend channel and the 200-day moving average and now the golden cross is approaching which according to former eToro analyst Mati Greenspan who is the founder of newsletter Quantum Economics says this could be expected to happen this week. This long term bullish indicator points towards a bull market on the horizon.

But before we jump into this party, it is a possibility Bitcoin will see a “relative period of calm movements between $9,500 – $11,500,” said trader Crypto Michaël. A similar opinion was shared by Mike McGlone, an analyst with Bloomberg Intelligence as we reported.

He points out that “nothing goes up in a straight line,” which is why Bitcoin could experience some weeks of relative calm movements. During this period, Bitcoin “accumulates back again on a higher level before it continues to move towards the next resistance,” said the trader.

The important level of $10,000 couldn’t provide “substantial support” this time as we have dropped below yet again. The move according to him has been “a bit overextended” as well.

However, $9,300 and $9,000 are long zones and if these areas hold support, Crypto Michaël said we could see a continuation to the upside, targeting $11,000 and $12,000. He said,

“There’s no reason to be bearish at all, retracements are healthy and should provide a nice buy the dip opportunity.”

An Opportunity for Altcoins

This range would be good for altcoins that according to Crypto Michaël are showing “significant strength” and outperforming Bitcoin.

With 300% gains in 2020, Lisk is leading the market gains followed by Bitcoin SV (255%), Dash (188%), Ethereum Classic (155%), Zcash (140%), Bitcoin Gold (137%), and Bitcoin Cash (110%).

A resistance in bitcoin price would give altcoins another opportunity to jump higher, says trader CryptoWolf.

However, these good times for altcoins are only till Bitcoin gets the FOMO (fear of moving out) breakout before the halving in May 2020 to $17,500, said Crypto Michaël.

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Author: AnTy

Bitcoin-Gold Correlation Near Record High, Investor says BTC Will ‘WAY Outperform’ the Metal in 2020

  • The (Peterson) correlation between gold and BTC climbed to 0.217, last seen in October 2016
  • Are we seeing the emergence of a new safe haven asset?

Last week, the tension between the US and Iran that rose resulted in Bitcoin showing signs of being “digital gold.”

It all started with the announcement of the Iranian general Qassem Soleimani’s death. Gold and bitcoin both jumped shortly after the news. A couple of days later, both digital gold and gold spiked together when the news about Iran bombing Iraq broke out.

Lastly, when President Donald Trump gave his de-escalation speech, the price tumbled at about the same time.

This isn’t something that happens very often. The rare occurrence of such events led industry commentators to believe that this could mean Bitcoin is becoming a “safe haven.”

Interestingly, Bitcoin’s correlation with gold has risen to 2016 levels. The (Peterson) correlation between gold and BTC climbed to 0.217 on Jan. 10. This level was last hit in October 2016 and before that in April 2013. The highest this correlation has ever been was in early October 2016 at 0.22.

The correlation between both assets was below zero about half a year ago but these levels haven’t been seen since August 2016 and strengthen the “digital gold” narrative for bitcoin.

Although, it can’t be ignored that this is just short-term price action which could be a spurious correlation. So, a long term evaluation is necessary to see if this holds any merit.

But Bitcoin has started to make a transition from a risk-on asset to becoming a safe haven as the leading cryptocurrency finds a place in the world market and investors’ portfolio.

Bitcoin already offers more crucial benefits over gold in today’s world of censorship, lack of privacy, and fear and threat of confiscation.

When it comes to being an investment with better returns, Bitcoin beats gold, with a wide margin.

In 2019, while gold surged 18%, Bitcoin price saw an increment of 90% in its value. Investor Preston Pysh expects the same trend to follow this year as well. Pysh said,

“Since March 2019, Gold has started to outperform the S&P500. I expect that trend to persist moving forward. But, I think Bitcoin will WAY outperform gold. Bonds are a disaster – they are all denominated in fiat – good luck with that long-term.”

Currently, gold is making a retracement, down at $1,550 per ounce after reaching its nearly seven-year high on Jan. 10 at $1,562 per ounce. The yellow metal could see more downside from here, according to analysts.

Bitcoin, on the other hand, has fallen from $8,450 last week to $8,080. Just like the price, trading volume has also declined from over a billion to about $533 million.

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Author: AnTy