- Bitcoin Mining Stock Surges
- Economic Slowdown
The economic fallout from the Coronavirus is starting to be felt across the world. China’s economy has been the hardest hit but contrary to wider market movements, bitcoin mining stock is rising.
BITCOIN MINING STOCK SURGES
According to a report from local media outlet 8BTC bitcoin mining hardware giant Canaan has seen its stock prices rally in recent weeks.
CAN stock rallied over 80% yesterday topping $8 according to NASDAQ as over 11 million shares traded hands. The Chinese bitcoin mining firm went public in November becoming the first of the ‘big three’ Chinese bitcoin miner makers to float on US markets.
Since then performance had faltered with a plunge of over 50% since the IPO dropping prices to an all-time low of $4.31. Analysts believe that the recent resurgence has coincided with bitcoin prices topping $10,000.
Miners have been scaling operations by purchasing newer hardware, possibly in anticipation of greater competition following the halving in less than three months.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!
The report added that many miners have been phasing out their old hardware which generates higher demand for machines that deliver better hash rates and energy efficiency.
Blockchain and crypto related stocks on markets in the US, Hong Kong and Mainland China, have all been performing well recently as digital asset markets continue to strengthen.
According to Canaan sales director, Chen Feng, hardware prices have been rising due to increase demand due to delayed shipments.
A bitcoin hash rate surge has also been expected as the outbreak comes under control, some manufacturing industries may work overtime to make up for the two week production break.
Rallies in stock prices for bitcoin related companies are also expected as the halving nears and market momentum continues.
The Coronavirus outbreak has disrupted Chinese economic output and Alibaba Group’s CEO Daniel Zhang has warned of a possible ‘black swan’ event that could impact the global economy.
According to reports demand for goods and services have declined, and the delay of the workforce getting back to work could further hinder economic growth.
The Washington Post added that the ‘financial hangover’ from the outbreak could last for months even after the virus is finally neutralized.
According to Capital Economics in London the epidemic’s after effects will probably cause the global economy to shrink this quarter for the first time since the depths of the 2009 financial crisis.
This is all coming at a time when central banks are scrambling to bolster their economies by flooding financial markets with newly minted money.
We Shouldn’t Want Buffett to Invest in BTC Right Now
Yesterday, we reported that Berkshire Hathaway CEO Warren Buffett was again bashing bitcoin, and for not taking it seriously, he’s potentially missed out on some big profits.
We Shouldn’t Want the Presence of Buffett in Crypto
Now, one source claims that if Warren Buffett were to ever change his mind about the world’s number one cryptocurrency by market cap and become a serious investor, that might be a sign that it’s time to sell one’s stash.
It’s interesting because Buffett recently sat down to lunch with Justin Sun, the CEO of TRON – one of the world’s top altcoins. Sun gifted him a phone with an entire bitcoin on it and swore to his followers and fans that he would work his tail off trying to make Buffett a believer.
Buffett commented that he enjoyed his time with Sun, and that he was intrigued by some of the ideas he presented during their lunch meeting. He said:
When Justin and four friends came, they behaved perfectly, and we had a very friendly dinner and the whole thing was a very friendly exchange of ideas.
While the two seemed to get along well during their initial meeting, it seems like all of Sun’s alleged efforts to change Buffett’s mind were in vain, as the real estate mogul is once again attacking BTC every chance he gets.
In a recent interview, he states:
Cryptocurrencies basically have no value and they don’t produce anything. In terms of value: zero. I don’t have any cryptocurrency and I never will.
Apparently, he’s forgotten about the phone Sun gave him. In any case, men like Buffett getting involved in crypto could potentially be a bad sign that the market is becoming “overheated” or saturated. In other words, too many people are getting involved, which could lead to an influx of activity and a responding price drop.
Buffett is, however, taking flack from people like Anthony Pompliano, the co-founder and partner of crypto-based financial firm Morgan Creek Digital. Recently, Buffett admitted to utilizing a flip phone all these years and has only recently upgraded to a “smart” edition. In an age of growing technology and gadgets, Buffett clearly hasn’t kept up with the times.
Pompliano took note of that, explaining:
I really don’t take technology advice from somebody who uses a flip phone or doesn’t use email.
A Follower of “Old” Ideals
Former e-Toro analyst Mati Greenspan also takes issue with Buffett’s attitude, saying he represents a world that is no longer in motion. He stated:
Buffett made his billions in a world that doesn’t exist anymore. Whoever the oracle of the next generation will be, my feeling is that they’ll have a much keener understanding of emerging technology and will be less reliant on baseless fiat money.
In the past, Buffett has referred to bitcoin as “rat poison squared.”
Bitcoin price drops below $9k after news of coronavirus infections in Italy
Bitcoin prices continue to slide, falling below the US$9,000 [AU$13,700] level following the sustained sell-off by investors due to fear of the coronavirus. This most recent drop comes just days after northern Italy became the scene of Europe’s biggest outbreak of the virus to date.
Meanwhile, the Italian government has quickly imposed measures to contain the spread of the deadly virus. Among them are the prohibition of public events and the closure of public buildings in at least 10 towns in the northern regions of Lombardy and Veneto.
According to Italian Health Minister Roberto Speranza, they issued advisory asking residents in the affected areas to stay at their homes to prevent the further spread of the disease. He said,
“WE ARE ASKING BASICALLY THAT EVERYONE WHO HAS COME FROM AREAS STRICKEN BY THE EPIDEMIC TO REMAIN UNDER A MANDATORY HOUSE STAY.”
Crypto and traditional markets affected globally
The coronavirus has already affected more than 30 countries, including Iran, Kuwait, Bahrain, and South Korea. Its presence in Italy has prompted investors and authorities to worry about the possibility of a worsening global pandemic.
Though Bitcoin has recovered somewhat – at press time it is trading in the $8,900 range – it is still down more than 14% from last week’s high of near $10,200. It is not certain whether the leading cryptocurrency will continue its slide or will perform better in the coming days.
On the other hand, the Dow Jones Industrial Average posts a 123.77-point drop to 26,957.59. The decline entirely wiped out the gains made by the index since January. Meanwhile, the S&P 500 also continuously slide and currently trades at 3,116.39.
However, the Nasdaq Composite Index showed some positive signs as it gains 0.17% to 8,980.77. The majority of the stock markets in Europe are also showing signs of recovery.
Mad Money advice: Avoid stocks with China connection
Meanwhile, Mad Money host Jim Kramer advised investors to keep away from American stocks that are too dependent on manufacturing products in China. He claimed that the COVID-19 outbreak would result in supply chain interruptions and a simultaneous slowdown of businesses around the world.
Part of his statement read:
“I NEED TO EMPHASIZE, AGAIN, THAT THE BIG RISK FROM THE CORONAVIRUS OUTBREAK HAS TO DO WITH INTERRUPTED SUPPLY CHAINS AND A CONCOMITANT BUSINESS SLOWDOWN WORLDWIDE. THAT MEANS WE HAVE TO BE CAREFUL. YOU DON’T WANT TO BUY SOMETHING THAT’S ABOUT TO HAVE ITS SUPPLY LINES CUT.”
Among the companies cited by Kramer as “too toxic to touch” are tech giant Apple and cruise industry players Norwegian Cruise Line, Carnival Corp, and Royal Caribbean Cruises. Also included are the casino stocks of Las Vegas Sands and Wynn Resorts, as well as bank and airline industry stocks.Micky readers – you can get a 10% discount on trading fees on FTX and Binance when you sign up using the links above.
4 reasons why analysts are still bullish on Bitcoin despite brutal 15% crash
To put it lightly, Bitcoin has not fared well over the past weeks. The price of the leading cryptocurrency, ever since rejecting the key $10,500 resistance as if it was a stone wall, has acted weak, losing support and support.
After two weeks of bearish price action — punctuated by a steep drawdown over the past three days that took Bitcoin from $10,000 to as low as $8,520 — it should come as no surprise that investors are once again fearing a return to a bear market.
Though, a number of analysts are still optimistic, touting an array of fundamental and technical reasons as to why they think Bitcoin has an upward trajectory in the coming months.
Reason #1: Macro support to be found around $8,500
While Bitcoin is still dramatically lower than it was just days ago, it decisively bounced off the $8,500 support (depicted below) and is now trading at $8,925 as buyers have stepped in at the eleventh hour.
This relatively strong bounce has been seen as bullish by a number of analysts; at and around $8,500 there exists a confluence of macro supports and key technical supports, meaning a reversal in this region supports the bull case.
Filb Filb, the pseudonymous crypto trader that predicted Bitcoin would bottom in the mid-$6,000s and would subsequently reverse into the $9,000s in the start of 2020, explained this further when he listed out the five key support levels around $8,500:
- 200-day simple moving average at $8789
- The point of control of the whole move at $8600
- The 50 percent Fibonacci retracement level
- The 20- and 50-week moving average at c.$8500
- The CME gap.
Reason #2: Emission shock of Bitcoin halving is just months away
Even if Bitcoin doesn’t find support at $8,500, the block reward halving — a once-every-four-years event that sees the amount of BTC issued per block get cut in half — is rapidly approaching; current estimates suggest the halving will activate at the start of May 2020.
The so-called “stock-to-flow” price model made by PlanB, a pseudonymous quantitative analyst that works for a European institution, suggests that scarcity is closely linked with BTC’s market value.
The May halving, the model suggests, will imbue Bitcoin with a fair value somewhere around $100,000 — over 1,000 percent above the current market price of the asset.
As crazy as this sounds, PlanB has found that the model is accurate to an R squared of 0.9372, which suggests that the relation between Bitcoin’s scarcity and its market price is anything but a coincidence.
This makes sense from a numbers perspective; if the amount of BTC inflation decreases and the amount of demand stays the same or increases, prices should naturally trend higher.
Reason #3: Retail interest is increasing
Data shows that retail interest in cryptocurrency is on the rise — something that aided Bitcoin’s rally from $1,000 to $20,000 in 2017.
CryptoSlate compiled the four key reasons to back this assertion in a previous report, though the summary of them are as follows:
- Demand for Grayscale’s Bitcoin Trust (GBTC), a relatively easy way for the American public to get exposed to cryptocurrency, has increased, evidenced by volumes on OTC markets.
- Volume on Coinbase has increased over the past two months. Coinbase has long been seen as the home of retail crypto investors.
- Google Trends for certain terms like “Buy Bitcoin” and “halving” have started to trend higher.
- Mainstream media are starting to cover cryptocurrency once again.
Reason #4: central banks continue to prove Bitcoin’s value
From a perspective of pure macro fundamentals, central banks continue to lower their policy interest rates and participate in open market operations.
Many prominent market commentators — from CNBC “Fast Money” anchors and a chief correspondent of the Financial Times to cryptocurrency analysts and macro investors — think this trend where money is easy to come by, enabled by low-interest rates, will boost demand for provably scarce assets, like gold and Bitcoin.