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Bitcoin feels China‘s heat; drops below $11,000

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(FinancialPress) — Bitcoin’s recovery hit a speed bump as China launched a call for centralized regulation of the blockchain. The country‘s stance on the technology behind BTC had it slip below the $11,000 mark.

The cryptocurrency had stabilized on Monday after flying high above the mentioned price mark, but tumbled in early Tuesday, overnight.

Coindesk had Bitcoin trading at $10,479 ($11,590 after pairing its gains) on Monday. It had been steadily rallying back from a massive drop that took its value all the way down to $60,000 in early February, and only broke through the $10,000 barrier on Monday of last week. Ethereum was running at $817.87, down from last night‘s $863.80 value. Bitcoin Cash dipped from $1,284.63 to $1,209.71.

Ripple was one of the biggest losers, dropping a full 10% in value – from $1.05 on Monday morning to $0.93. Rumors of it finally being added to Coinbase had fueled its valuation – however that actually materializing is still uncertain.

The turmoil was sparked by Zhang Ye – head of the tech unit at China‘s Securities Regulatory Commision – stating that more regulation for the blockchain is needed. This happened during the Two Sessions conference in Beijing.

“Blockchain’s advocates for absolute decentralization have no solid ground, because (blockchain) itself is a software developed in a centralized way,”  Zhang told Chinese publication Securities Times as part of an interview. “So is the public key infrastructure, which remains an important feature adopted by blockchain.”

Adding to the crypto world‘s woes, there have been reports of Chinese regulators shutting down the social media accounts of popular cryptocurrency exchanges that are still offering their services in the mainland.

Caixin reported on Monday that local authorities have shut down the channels for some of such service providers in WeChat, the country‘s most popular social messaging platform. The Beijing publication stated that this was due to stricter official oversight on platforms offering coin exchanges to Chinese investors.

 

Ruben is a South American writer who focuses on the state of the cryptocurrency, cannabis and tech industries worldwide.

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The trade war has markets staggering again

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(FinancialPress) — The effect of the White House‘s latest round of flak towards Chinese exports made itself visible almost immediately.

The United States revealed it is weighing the possibility of hiking the proposed rate of tariffs imposed to goods imported from China from 10% all the way to 25% for goods valued at $200 billion

Several global markets were affected by the news. The Japanese Nikkei lost 1%, while Hong Kong‘s Seng dropped 2.2%. The German DAX went down by almost 2% while France‘s CAC 40 dipped 0.9%. US stock futures also lost value.

BOCOM International‘s Hao Nong weighed in on the issue: “The trade war is the big driving factor. With much still evolving, it’s difficult to price in the uncertainties.”. BOCOM is a broker with operations in multiple major markets.

China‘s goods worht $34 billion were already subject to a 25% tariff by the US administration. The measure was taken as punishment for alleged unfair trade practices. China retaliated immediately by applying the same tariff to US goods.

Nick Twidale, Broker Rakuten Securities Australia‘s chief executive officer, showcased that “Markets are now wary of the next step in the trade war between the United States and China,”. He added that upcoming moves could shift sentiment send many markets into a tailspin.

The worst part of Shanghai trading‘s losses befell on tech and industrial companies focused on exports. Since its late January peak, China has become the worst performing major stock market in 2018. From then to now, its combined shares have lost over 20% in value.

Investors are beginning to cast doubt over the lagging Chinese economy‘s ability to survive an escalating trade dispute with the Trump administration.

New data begins to show the negative effects of the newly-enacted tariffs on China‘s economy. Its purchasing managers index for July showed that the country‘s massive export industry is slowing down. The index is designed to showcase the health of the manufacturing sector.

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Morgan Stanley thinks it knows when the bull market will end

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(FinancialPress) — The stock market party will carry on for a little longer. However, we may be approaching last call. Morgan Stanley states that the market “can mount one last rally“ over the summer before peaking in the second semester in 2018. The prediction was part of a report released by the bank this week.

Andrew Sheets, who leads the cross asset strategy division at the institution, wrote: “We think that this bull market has limited runway.“

The note cited a slew of positive variables that are beginning to turn into the opposite direction. Inflation is rising. World economic growth is expected to begin lagging. The White House shifted away from a tax cut angle towards a tariff imposition one. And the Fed aims to accelerate interest rate hikes.
Sheets added that “all this now appears to be changing, and all at once,” and it‘s “not just a harder environment, but a fundamental shift.”

The current bull market began its run in March 2009. It currently holds the record for second-longest in history.

Between 2016 and the beginning of 2018, the market has seemingly only moved upward. The Dow rose from 18,333 at the time of President Trump‘s election all the way to the all-time high of 26,616 by the end of January.

Not all was fine and dandy over this time, though. Growing fears of a possible trade wars and a spike in inflation leveraged a decrease in stocks in the winter. The Dow now sits about 2,000 points below that historical threshold.

The billion-dollar burning question in Wall Street remains: is the bull market running out of steam?

“2018 will see a series of rolling tops,” Sheets wrote, highlighting that the extreme turbulence at the beginning of 2018 was “not an aberration.”

“Some time in the next year and a half, the economy will probably fade” into a recession, said Guy LeBas, Janney Capital‘s chief fixed income strategist. “It’s part of the natural ebb and flow of the US economy.”

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TSLA in freefall after second fatal self-driving car crash

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(FinancialPress) —Electric carmaker Tesla is facing a rain of criticism and astonishing losses after one of its cars caused the second fatal car crash in its records last week.

The month of March has not been kind to to the Silicon Valley based company, as it has seen its shares drop 15% just last week – and specialists believe there is more pain on its way.

One of the company’s Model X SUVs caused a fatal crash while driving on autopilot. This has brought about more unwanted scrutiny on the company, which was already undergoing a difficult massive recall of its Model S cars, albeit for unrelated reasons. The recall saw Tesla withdraw 120,000 car units from the market to fix an issue with corrosive bolts in the power steering.

These woes have added fuel to the ongoing fire that’s been raging between the company and its investors. The company’s lack of revenue is quickly eroding patience among debt holders. Other factors weighing in on their disappointment in its results are the repeatedly missed production targets and the fact that major credit rating agency Moody’s recently knocked down its credit score, due to the aforementioned delays in production and heavy reliance on debt financing.

 

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