Cryptocurrency analyst, Saxo Bank
Summary: This week the entire crypto market cap rose by 7.5%, bringing the market cap to $260 billion. Ethereum also rose by 7.5% to a market worth of $28bn, while Bitcoin surged 14%, bringing this cryptocoin to more than $9,000 apiece, a level not seen since May, 2018.
This week Facebook revealed what is arguably the most important thing in the crypto sector since the ICO mania. Libra is Facebook’s digital currency project which has now been left in the hands of a Swiss Foundation under a similar name. The Libra Association aims to launch a stable coin backed by a basket of fiat currencies and low-risk assets, to enable users to transfer value globally at little to no cost. The project will be governed by members of the Swiss foundation, which includes Facebook, Visa, Mastercard, Paypal, and Uber. This currency will have massive implications for digital commerce, remittances, and monetary policies of nations. Regulators from the US to the EU are calling on Facebook to answer questions about the project, regarding intentions and privacy concerns. The world will be watching these discussions closely as this represents the most substantial foray into financial services in recent history. We’ll be publishing a longer article albout Libra on home.saxo insights soon.
Report suggests Bitcoin as a global hedge
Grayscale Investments recently released a report claiming that Bitcoin ought to be considered a strategic position in any portfolio with a long investment horizon. The report states that financial crises are becoming more commonplace. To support its conjecture that Bitcoin could serve as a possible hedge in a global liquidity crisis, Grayscale cites five global events ranging from Grexit to Brexit to the US/China trade war and Bitcoin’s performance during those crises. Despite Bitcoin being a relatively new investable instrument, the firm believes, with the reinforcement of some in the investment management industry, that Bitcoin can serve well in the construction of more efficient portfolios as adoption increases.
Bloomberg and Reuters are adding a new cryptocurrency index to their platforms. This index ranks the top 100 coins based on over 200 factors to derive a ranking. This index incorporates sentiments expressed on social media and news coverage to calculate the performance of the top 100 coins. The index is rebalanced monthly and is designed to spot artificially inflated volumes.
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Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.