The US Stock Market Drops While the Crypto Market Takes a Small Leap

The US Stock Market Drops While the Crypto Market Takes a Small Leap

Yesterday the US stock market took a downward spiral. It is said that this month is set to become one of the lowest December performances by the US market since the Great Depression. Meanwhile, on the obverse, the cryptocurrency market takes an upturn

The Federal Reserve (Fed) is soon expected to bring in a verdict on whether they will raise interest rates. This caused unease among investors and it might have caused the market downturn. Nasdaq fell by 2.3%. The S&P 500 plunged 2.1%, its lowest point in 14 months. The DJIA (Dow Jones Industrial Average) lost 2.1%.

Stocks in Europe also took a tumble. Index provider, Stoxx, fell 12% this year.

Asset allocation strategist, Stefan Keller, remarks that asset groups are down, lower than 2008.

Cryptocurrency Markets Turn Green But is Still Not Green Enough

Last October, the cryptocurrency market lost $16 million in valuation following the DJIA, S&P 500, and Nasdaq’s dive.

History did not repeat itself. The cryptocurrency market has seen an 80% decline this year from its 2017 highs. But today the market’s capitalization is up 8.84%. As US stocks take a hit, Bitcoin climbs 8.39%, priced at $3,784. Ether is also up by 10.72%, priced at $103.04.

While the greens of the crypto market give investors hope, it still needs to gain more momentum to be able to reach a fair height worthy of its peak.

The Fall: Did Excessive Regulations Pull the Market Down?

Peter Du of Du Capital, a blockchain venture fund, thinks that the Securities and Exchange Commission (SEC) with their ‘heavy-handed over-regulation’ and the bear market created obstacles for an ecosystem that is still under development. He remarks that Ethereum is an example of how too much regulation can arrested growth. He follows that the preceding bull run was in nature speculative and was not of help to ‘Ethereum’s technology or ecosystem development’.

To circumvent the regulatory obstacle field, Du Capital and other venture funds have deviated to security tokens.

The market is seeing potential signs of a new initiative, technical developments, and foreign investments. Du is taking the ‘wait and see’ track nonetheless.

BTC

7,892 USD
-1.59%

ETH

248.24 USD
-2.05%

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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise

Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off. A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency. Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards. Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop. Source: Bloomberg It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise. Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing. The analyst added: “Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.” With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past. Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated: “Great to see JPM finally admitting that Bitcoin has intrinsic value. Now wait till they understand that miners who run a surplus tend to begin hording.” Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee. This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations. The post JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise appeared first on AMBCrypto.
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