FDIC Urges People to Not Pull Money Out in a Desperate Attempt to Avoid A Bank Run

In the past weeks, investors have fled out of risky assets that resulted in equities, oil, cryptos to even gold and bonds falling in prices. The risky assets along with traditional safe haven assets were left out in favor of cash.

As usually happens in times of crisis, investors turn to hoard cash by selling everything they can get their hands on. However, people stockpiling indicates a cash crisis might be brewing. Interest rate cuts to zero percent and even in negative territory isn’t helping the case for banks either.

Yesterday, the Federal Deposit Insurance Corporation took to Twitter to advise people against withdrawing money and hoarding, cash emphasizing that “the safest place to keep your money is in the bank.”

In this less than a minute long video, FDIC talks about how in the current unprecedented times of novel coronavirus, people are fearful about what they should be doing with their money when they needn’t be because “your money is safe at the banks.” FDIC said,

“The last thing you should be doing is pulling your money out of the banks now thinking it is going to be safer someplace else. You don’t want to be walking around with large wads of cash and you certainly don’t want to be hoarding cash in your mattress. It didn’t pan out well for so many people.”

The corporation said, “no depositor has lost a penny of their insured deposits since 1933 when the FDIC was created,” as such “if you’re talking about having your money in a safe place, please keep it in an FDIC-insured bank.”

“You nervous about something?” is what Nik Carter of Coin Metrics responded with.

Bank Runs

In times of economic hardship, everyone makes a dash for cash and this time as it is happening, banks are struggling to provide liquidity.

According to reports, the likes of Bank of America, JPMorgan, and Chase are limiting the withdrawals. These banks have capped the limit between $3,000 to $10,000 in some of the areas.

“We don’t keep large amounts of cash in big bills in the branches because it’s dangerous for our employees and there is low demand,” said BoA.

However, there are no such limits on withdrawing crypto, as long as you are the one that owns your keys. But during the recent market carnage, the fact that cryptos also crashed hard has some in doubt.

However, it must be noted that so did gold just like it fell in 2008 during the financial crisis but only to emerge as the winner. And the same is expected of the deflationary Bitcoin with a hard cap of 21 million, unlike the US Dollar, that the Federal Reserve keeps on printing more and more.

As BitMEX in its recent report noted, “Where the Bitcoin price may shine is in the volatile inflationary aftermath of the response to the crash.”

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Author: AnTy

Has Bitcoin Found its Bottom or Is More Pain Ahead?

  • “The moment equities shit the bed again Bitcoin will follow” – trader Cantering Clark
  • In the short-term, BTC price is expected to rise only to yet again drop below $5,000

In a massive and violent sell-off in Bitcoin resulted in the crypto asset losing more than 50% of its value to fall to $3,850, a level last seen in March 2019. On crypto derivatives exchange BitMEX, the price of BTC went as low as $3,600.

The worst day in crypto has been the third biggest drop ever in bitcoin’s history. Does this mean, the world’s leading cryptocurrency has found its bottom of this cycle?

According to some like pseudonymous bitcoin maximalist, Loomer, bitcoin has printed a bottom and is likely to consolidate in a range for a while now.

However, others like trader Cantering Clark believes this isn’t the end of pain for the flagship cryptocurrency.

“Bitcoin has not bottomed because equities have not bottomed,” said Clark.

Equities haven’t bottomed so Bitcoin hasn’t too

Crypto market along with stocks, bonds, gold, and other assets have been in a downturn for the past month amidst the concern about the economic impact of the spreading coronavirus (Covid-19).

The US stock market recently had its worst day since 1987 while gold saw its highest weekly fall in eight years.

But equities haven’t bottomed yet because “We essentially just went from Bull market to Bear market in under 20 days,” argues Clark. Not to forget the true extent of the effect and damage from coronavirus is yet to be revealed.

“This began as an exogenous event and turned into something that now permeates the largest & most fundamentally important industries in the global economy. The financial industry, the travel industry, the oil industry,.. everrrryttthinnggg.”

The current scenario he said is a combination of 9/11, ‘08 crisis, and dot-com bubble.

“Bitcoin will be free to put in whatever positive price action it can when the major markets idle,” but “the moment equities shit the bed again Bitcoin will follow.”

Bitcoin will emerge from current calamity stronger than ever

In the short term bitcoin is expected by traders to test the $6,200-$6,400 region but only to short BTC at that point. The digital asset could very well revisit $4,500 which will be the point we will find if the bottom is really in or not.

According to economist and trader Alex Kruger, once BitMEX is done with its liquidations, prices will go up, a lot. However, he doesn’t expect this rally to continue for much longer time-wise as it’s a short-term play.

“A counter-thesis is that once Bitmex is done with liquidations and funding goes back up, it will again become attractive to short. That may not be very relevant though, as credit risk has now become a real issue and not as many traders want to keep funds at exchanges,” said Kruger.

All in on, the faith in bitcoin hasn’t been shaken as Tyler Winklevoss, co-founder and CEO of crypto exchange Gemini said,

“Bitcoin was born in 2008, during the winter of our financial discontent. It has already weathered much to be here, and it seems unlikely to give up anytime soon. It will emerge from this current calamity stronger than ever. Decades are not measured in days.”

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Author: AnTy

Bitcoin Is ‘Trading’ Like a Risk-On Asset But Gold’s Also Feeling the Selling Pressure

  • Bitcoin, oil, overseas equities, Treasury yields plunging
  • US President Donald Trump promises fell short of what investors were hoping
  • Gold also feeling the pinch from the fall in financial markets

Bitcoin started the day at a deeply red note, tanking to $5,713, a level last seen in May 2019. Overall the crypto market lost more than $50 billion, as altcoins followed bitcoin down.

The rout deepened on Thursday for the stock market as well as S&P 500 opened the market at 6.6% losses and the Dow Jones Industrial Average plunged 1,700 points.

CME Group meanwhile is closing its Chicago trading floor on Friday “at the close of business,” as a precaution due to the coronavirus.

Coronavirus also led the National Basketball Association to suspend its season indefinitely after Utah Jazz players tested positive for the new virus. Academy Award-winning actor Tom Hanks and his wife Rita Wilson also tested positive for the coronavirus.

Investors’ expectations not met

From bitcoin, oil, overseas equities to Treasury yields everything plunged today after the World Health Organization declared Coronavirus a “pandemic”. Coronavirus (Covid-19) has infected 126,000 people globally while the US death toll was at 38 early Thursday with over 1,310 confirmed cases.

On Wednesday, US President Donald Trump restricted travel from Europe to the US for 30 days starting Friday. Trump pledged to provide financial aid and promised liquidity and capital but offered few details.

“Donald Trump’s public address fell short of what investors were hoping for,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Today, European Central Bank decided not to cut interest rates despite the market expectations for a 10 basis point cut to stimulate the euro economy amid fears that a recession is about to hit the region. Both the Bank of England and the Federal Reserve cut rates over the last week.

Though the rates weren’t cut, the central bank did expand its asset purchase program by 120 billion euros ($135 billion) and announced measures to support bank lending.

Investors looking to de-risk

Gold, on the other hand, rose on worries about the economic impact of the coronavirus. Spot gold rose 0.5% to $1,642.46 per ounce, but down from the 7-year high $1,702 hit on Monday.

However, on the flip side, traders are selling gold to fund margin calls which are capping the yellow metal’s gains. Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade said,

“Gold is now feeling the pinch from the fall in financial markets and travel ban. So, investors will keep money out of the markets for some time or book profits from the high levels, because of which we’ve seen some selling pressure in gold.”

Bitcoin meanwhile continues to follow the stock market which indicates the cryptocurrency is a risk-on asset.

“Bitcoin is trading like a risk-on asset. Not a safe haven, but the exact opposite,” said economist and trader Alex Kruger. However, the trader explained that the flagship cryptocurrency is trading like a risk-on asset and not being one as “investors are now looking to de-risk.”

However, Gabor Gurbacs, a digital asset strategist at VanEck maintains that both bitcoin and bullion are “safe-haven competitors against negative yielding government debt.”

The recently turned negative-yielding government bonds are relatively new, and “the next decade may redefine fundamental investment axioms about safe-haven assets.”

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Author: AnTy

Crypto Market Lost $136B in Past Month, LINK Drops to $0.0001 & XRP to 2020 Lowest

  • “Equities right now are a systematic risk to crypto,” said trader Cantering Clark
  • In the last 15 days, the S&P 500 has lost $5.6 trillion of market cap, 40x the current market cap of bitcoin
  • Crypto streets are running red with the bloodbath it is experiencing today.

In a sudden and violent crash in the price of bitcoin wiped out all the profits that the world’s leading cryptocurrency made in 2020 so far. From above 10,500, the 2020 peak Bitcoin reached on February 13, today, we fell as low as $5,720.

Today, Bitcoin price has been on a free fall on the back of heavy volumes however, for now, the digital asset has moved back above $6,000.

“Equities right now are a systematic risk to crypto. Forget the Rah Rah Pomp type talk before you lose money. Stay objective, stay vigilant. BTC is trading at the whim of what the ES allows it to do. It is like a dog chasing a bus and forgetting it is on a chain still,” said trader Cantering Clark.

A drop of 24% in bitcoin price in the past few hours means altcoins dropped harder. This resulted in the overall market losing more than $50 billion.

Source: Coin360

Altcoins’ Rout

Coronavirus, which is now declared a pandemic by WHO has triggered a wave of historic measures that resulted in a steep drop in US stock futures and crypto market Thursday.

In the last 15 days, the S&P 500 has lost $5.6 trillion of market cap, 40x the current market cap of bitcoin, while the crypto market has lost $136 since Feb 15.

The second-largest cryptocurrency Ethereum has dropped to $140 while XRP has gone to its lowest level of 2020 at $0.164.

Chainlink (LINK) is leading the losses with 37.52% that momentarily dropped to $0.0001 on Binance after the exchange’s system got overloaded 5x the previous peaks.

Binance CEO Changpeng Zhao reported on Twitter that the spot depth push experiencing delays, futures UI 500 errors, and some futures ADL and margin calls, which has been now all fixed.

Tezos (XTZ) follows LINK close behind with 34.18% losses. Among the low cap altcoins, Super Bitcoin (SBTC) is down 60.84% trading at $0.355 while Crowd Machine (22.11%) and Blit Predict (7.91%) are the only ones in the green beside a few stablecoins.

Getting more bearish on the economy

These losses came on the back of the US President Donald Trump announcing a 30-day European travel ban, however, “The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” said EU Council President Charles Michel and European Commission President Ursula von der Leyen in a joint statement.

The situation of the market is not expected to turn for good yet as economist and trader Alex Kruger says, “I’ve been getting more bearish on the economy by the minute, based on increasing odds of countries going into lockdown.”

In China, the epicenter of the virus, the situation is under control now which has been the result of extreme measures taken by the country that involved shutting down the affected regions and the economy.

As the coronavirus continues to spread around the world, outside of China, the governments would be required to implement similar extreme measures nationwide, as did Italy, which means, “small business and large corporations going bankrupt.”

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Author: AnTy

PAX Stablecoin Issuer Paxos Settles First US Equity Trade Using Blockchain

The first blockchain-based settlement of US equities was claimed by Paxos, the New York-regulated cryptocurrency startup, Instinet, the broker dealer owned by Nomura, and Credit Suisse.

The announcement that the Paxos Settlement Service is live has been made on Wednesday. This service allows the simultaneous exchange between cash and some of the Paxos’ Ethereum US-listed equities. The Paxos Trust Company made last year the announcement about the pilot that involves Société Générale and Credit Suisse being given the approval of the US Securities and Exchange Commission (SEC).

US Equities Settling Automatically in an Outside System

At the moment, the pilot stage may be running for 24 months and allow only 7 participants to handle 100,000 trades per day. Melayna Ingram, who is a Director Securities Product at Paxos said Société Générale should be integrated and go live until this quarter ends. Ever since the Depository Trust and Clearing Corporation (DTCC) has been formed, it’s the first time for US equities to settle automatically in an outside system.

As Ingram mentioned, most of the US equities innovations from the past 20 years have been in trading market venues and trade execution. Here are her exact words about what’s going on at Paxos:

“The back office has largely stayed the same, running on mainframe codebases and involving a complex system of reconciliation which is out of step with new technology.”

Paxos Will Apply to Be Fully Registered with the SEC

Paxos said it’s looking forward to apply this year with the SEC in order to become a registered clearing agency. At the moment, such licenses are given to only 7 US companies. Paxos doesn’t use an enterprise Ethereum client such as Besu, Quorum or BlockApps. Instead, it uses a private blockchain Ethereum code-based network.

Trying to explain the Paxos Settlement Service, the Credit Suisse’s head of digital asset markets Emmanuel Aidoo said:

“Paxos Settlement Service introduces blockchain technology that’s compliant with regulations and allows us to take important strides towards evolving market structure and unlocking capital that is tied up in legacy settlement processes.”

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Author: Oana Ularu

Tom Lee Says This Bitcoin Crash Solidifies His ‘Unpopular’ Opinion About BTC

  • BTC followed the risk-off sell-off in equities – Tom Lee
  • BTC crash was simply driven by stops.
  • Upper 7000s is first ideal spot for longs – Alex Kruger

Since Bitcoin first started sliding down from $10,000 hitting $8,025 on Sept. 24, Bitcoin price has been stuck around $8,300. Though yesterday it went up yet again to $8,640, today, BTC has crashed yet again, dropping to almost $7,730.

At the time of writing, BTC was trading at $7,936 with 24 hours loss of 4.62%, as per Coincodex.

This crash Bitcoin bull and Fundstrat’s Tom Lee says “followed the risk-off sell-off in equities,” reinforcing his ‘unpopular’ opinion that Bitcoin doesn’t do well in a trendless macro environment. For BTC to blast off, new highs are needed in S&P 500, he said, adding, “crypto is retail and thus, risk on.”

Bitcoin Misery Index is saying “risk-off”

A couple of weeks back, Lee first shared this idea stating that Bitcoin won’t make a new high until the stock market makes a new high. Since 2019, he notes, the best years of Bitcoin has been when the S&P 500 was up over 15%.

The reason for the leading cryptocurrency being range-bound was because of macro trendless. This he further said is confirmed by the Bitcoin Misery Index.

Even currently, the index is saying “risk-off” that has been the case since July. The index needs it all to 40-53 reading to see better risk/reward and start surging.

BTC crash was simply driven by stops

However, economist and trader Alex Kruger begs to differ as he explains the reason behind Bitcoin’s plunge.

Larger time frame consolidation with stops consolidating at the edges of the range and range awaiting resolution to see who wins drove this fall.

Then, Bakkt disappointment acted as a trigger to a move lower. Once the momentum starts kicking in, large sellers come in at 9300, prior higher low, going for the break. Then, the bottom of the range at 9080/9000 breaks running the stops over in the process and all leveraged positions getting liquidated.

As such the liquidity vanishes and price first tanks to 8500, then to 8000, fast which he says was “expected.” Bitcoin price is plunging for a number of reasons but has nothing to do with stocks crash that responded to US President Donal Trump UN speech about China and impeachment news.

BTC crash was simply driven by stops. As for what’s next, according to him, bears will be in control until either price moves higher and sets in a bear trap, starting at $9,300 but no later than $9,500, or next flush is lower.

“Upper 7000s is first ideal spot for longs (all the 7000s for larger time frame longs),” he added.

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Author: AnTy