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CoinNews

Bitcoin holds steady against economic headwinds, outshining Ethereum

by CoinNews
written by CoinNews

Quick Take

In the midst of economic uncertainty, Bitcoin continues to dance around the crucial $70,000 level, demonstrating its resilience despite the DXY index steadily climbing towards 106 and US yields on the rise. As investors seek safe-haven assets, many are looking to gold for guidance, hoping that Bitcoin, often referred to as “digital gold,” will follow suit.

Bitcoin Dominance: (Source: TradingView)
Bitcoin Dominance: (Source: TradingView)

Despite a slight dip at the beginning of April, Bitcoin’s dominance in the digital asset market remains strong, currently at 54.6%, just below the cycle highs of 55.2%. This growth in dominance, up 6% year-to-date, indicates that investors, on aggregate, are favoring Bitcoin over other digital assets.

Another noteworthy trend is the ETH/BTC ratio, which remains below the critical 0.05 threshold, suggesting that Bitcoin is outperforming Ethereum. The ETH/BTC ratio has declined by 6% year-to-date and 20% over the past year. As the DXY index continues to surge, market observers are keeping a close eye on Bitcoin and gold, anticipating that they may continue to hold their ground or even follow the upward trend, providing a potential hedge against economic instability.

ETHBTC: (Source: TradingView)
ETHBTC: (Source: TradingView)

The post Bitcoin holds steady against economic headwinds, outshining Ethereum appeared first on CryptoSlate.

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CoinNews

Peter Schiff Warns of Severe Economic Repercussions, Highlights Inflation and Money Supply Concerns

by CoinNews
written by CoinNews

Peter Schiff Warns of Severe Economic Repercussions, Highlights Inflation and Money Supply ConcernsIn a recent analysis, economist Peter Schiff draws stark comparisons between the current U.S. economic optimism and the prelude to the 2008 financial crisis. Schiff, leveraging his expertise, warns of impending financial turmoil, emphasizing the critical role of money supply in understanding economic health. Peter Schiff Warns: U.S. Economy on the Brink, Echoes of 2008 […]

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Finance

Treasury yields end at roughly three-week lows after new U.S. economic data

by CoinNews
written by CoinNews

U.S. government debt rallied on Friday after a mixed batch of U.S. economic data, giving 2- and 10-year yields their biggest weekly declines in at least a month.

What happened

  • The yield on the 2-year Treasury
    BX:TMUBMUSD02Y
    fell 11.3 basis points to 4.531%, from 4.644% on Thursday. The yield declined 15.6 basis points for the week, the biggest weekly decline since the period that ended Jan. 12.

  • The yield on the 10-year Treasury
    BX:TMUBMUSD10Y
    dropped 7.1 basis points to 4.180%, from 4.251% on Thursday. It finished 7.8 basis points lower for the week, the biggest weekly decline since the period that ended Feb. 2.

  • Friday’s levels were the lowest for the 2- and 10-year yields since Feb. 12, based on 3 p.m. Eastern time figures from Dow Jones Market Data.

  • The yield on the 30-year Treasury
    BX:TMUBMUSD30Y
    fell 4.9 basis points to 4.326%, from 4.375% on Thursday. Friday’s level was the lowest since Feb. 7. The yield declined 5.3 basis points this week.

What drove markets

Friday’s U.S. economic-data releases brought a pair of mixed reports on manufacturing.

The Institute for Supply Management’s manufacturing index showed that activity contracted in February for a 16th straight month. But the final reading of S&P Global’s manufacturing purchasing managers’ index inched up to 52.2 in February versus an initial reading of 51.5, signaling a quicker pace of improvement in that sector.

Separately, consumer sentiment moved sideways in February, slipping from levels seen in January but holding on to gains from over the past three months, according to the University of Michigan. And construction spending fell in January for the first time since December 2022.

Treasury yields had ended February with their biggest monthly gains since 2023, following a series of data that pointed to continued persistent inflation. On Thursday, the Fed’s preferred inflation measure, the PCE price index, was in line with expectations for January, but still hot.

Read: ‘The Fed will not cut rates this year,’ says Wall Street economist

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Finance

Economic boost from Swift’s Eras Tour could be overstated

by CoinNews
written by CoinNews

Taylor Swift performs onstage at Lumen Field in Seattle on July 22, 2023.

Mat Hayward/tas23 | Getty Images Entertainment | Getty Images

The devil’s in the details, but local economies have a friend in Taylor Swift.

The American pop star has spent nearly a year crossing the U.S. and the globe with her high-flying Eras Tour. The economic effect of the “Karma” singer’s show has caught the attention of everyone from the Federal Reserve to Wall Street.

Her tour undoubtedly helped the local economies she visited, according to a new report out from Japanese investment bank Nomura. But the firm questions how much of an imprint it made on national data.

“Her boost to consumption has certainly enchanted US economic analysts, but we believe the total macroeconomic effect is probably overstated,” Nomura global economist Si Ying Toh wrote to clients last week.

Between the first and third quarter of 2023, Swift’s venture alone lifted nominal U.S. retail sales by 0.03%, and real gross domestic product, a measure of economic output, by 0.02%, Nomura estimates show.

For all of 2023, the 14-time Grammy winner’s tour accounted for 0.5% of nominal consumption growth, according to the firm’s calculations.

Though those data points can be considered marginal, Toh said the economic boost — which some have dubbed the “Swift-lift” — is “undeniable” for the 20 cities U.S. she visited.

Stops on The Eras Tour saw a bump of 2.1 percentage points to lodging inflation during the month of Swift’s visit, according to STR data cited by Toh. Data from hotel booking platform Trivago shows a similar rise, she added.

Looking at Chicago specifically, Toh estimated that lodging prices rose 3.1 percentage points due to Swift’s three shows there. The city, which is the third-most populated in the U.S., saw a bump of 8.1 percentage points in occupancy and a 59% increase in hotel revenue per available room during Swift’s stint.

From that, the consumer price index for the Illinois city increased 0.5 percentage points from the singer’s visit alone. CPI is the measure of a basket of goods and services used to calculate changes in costs over time.

It’s less likely for these local improvements to materialize in national-level statistics from larger economies such as the U.S., U.K. or Japan, Toh said. Still, these events are worth watching as potential economic catalysts in countries around the globe, she said.

Internationally, small economies such as Singapore and Sweden could see the biggest macro boosts from her tour, according to Toh.

“Exogenous shocks play a key role in economic modeling, whether in the form of an extreme weather event, a pandemic or … a pop concert,” Toh wrote to clients. “In recent years, concert tours have grown to become not just major social phenomena but also potentially a significant driver of economic activity.”

Swift’s tour is set to conclude near the end of 2024. The film version, which already captured more than $200 million globally through a movie theater run, begins streaming on Disney+ on March 15.

Don’t miss these stories from CNBC PRO:

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Finance

George Soros’s Former Co-Founder Sounds Economic Alarm Saying, ‘The Next Problem Has To Be The Worst In My Lifetime’ — Waiting For Right Time To Go Short

by CoinNews
written by CoinNews

The Quantum Fund’s historical performance is most often associated with Co-Founder George Soros. The fund achieved an average annual return of 30% from 1970-2000.

Perhaps Soros’s most famous bet came against the pound in 1992 when it netted his fund about $1 billion in one trade, considered by some to be the greatest currency trade of all time.

However, Soros didn’t start the Quantum Fund alone. Instead, he founded it alongside another now-famous investor, Jim Rogers. While Rogers left the fund in 1980 to “retire” and travel around the world on his motorcycle to search for international investment ideas, eventually turning his travel experiences into a best-selling book called “Investment Biker,” he continued to share his thoughts on the market.

Don’t Miss:

Seemingly, the best thing he can say about stocks at the moment is that it’s not the right time to short them … yet.

In a recent interview, Rogers shared that the world essentially is in an everything bubble, telling Soar Financially, “Bonds are a bubble, property in many countries is a bubble, stocks are getting ready for a bubble.”

Even with his bearish conviction, he points out that he’s “not shorting yet because often at the end there’s a blowoff and things get really crazy.”

To play out his thesis as he waits for his planned short, Rogers is happy to sit in hard assets such as gold and silver, explaining “everybody should have some silver and gold under the bed.”

Trending: Copy and paste Mark Cuban’s startup investment strategy according to his colorful portfolio.

Investors who don’t want the stress of storing the actual physical metal in their possession could consider an exchange-traded fund (ETF) such as the SPDR Gold Trust (NYSE:GLD) or the iShares Silver Trust (NYSE:SLV).

It should be noted, however, that Rogers has not been accurate with his predictions in recent years.

In 2011, he shared that there was a 100% chance of a crisis worse than in 2008. If investors heeded his advice then and never got back into a market-tracking index fund such as the SPDR S&P 500 ETF Trust (NYSE:SPY) they would have missed out on about 290% returns. Of course, these impressive returns came despite there being wars, a pandemic, flash crashes and inflation scares.

As the old expression goes, even a broken clock is right twice a day. However, to completely dismiss the advice of one of the world’s most legendary investors might not end up looking wise if Rogers is right about a serious crash being around the corner — especially if it is the worst in his lifetime, given how much he’s seen in his 81 years.

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This article George Soros’s Former Co-Founder Sounds Economic Alarm Saying, ‘The Next Problem Has To Be The Worst In My Lifetime’ — Waiting For Right Time To Go Short originally appeared on Benzinga.com

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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CoinNews

SEC Chair Gary Gensler Outlines ‘Very Real Economic Difference’ Between Bitcoin and US Dollar

by CoinNews
written by CoinNews

SEC Chair Gary Gensler Outlines 'Very Real Economic Difference' Between Bitcoin and US DollarU.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has outlined a “very real economic difference” between crypto like bitcoin and fiat currencies like the U.S. dollar. “You have a whole central bank, and support for one currency, generally per economic region,” the SEC chief noted, adding that we don’t have the same in bitcoin. […]

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CoinNews

A crypto workforce is the key to Argentina’s economic recovery

by CoinNews
written by CoinNews

The following is a guest post from Hugo Finkelstein, the CEO of Rise, a Web3-enabled payroll and compliance solution for modern workforces.

Inflation has ravaged Argentina. If you’d saved $100,000 USD worth of Argentine pesos in 1995, they would be worth about $310 USD today. In November 2023, the inflation rate was reported to be as high as 185%. 

Recently, the country’s struggling population has begun to turn to cryptocurrency as an improved payment method and a better way to save the money they earn. With a new ‘minarchist’ president in Javier Milei, the country and its workforce are primed to double down on blockchain to kickstart the growth the country so desperately needs. 

To make this happen, efforts must be twofold. The country’s new government should create a friendly environment for retail crypto users and blockchain institutions. On the other side, domestic and international companies interacting with Argentina’s workforce should promote crypto as a valid form of payment and transaction.

Argentina’s Burgeoning Crypto Scene

Argentina’s population has already undergone a steady move towards crypto adoption. The use of stablecoins like USDT and DAI is more popular than ever, especially through informal forex and crypto exchanges known as Cuevas. Inside these black market ‘caves’, (the literal translation), Argentinians are constantly exchanging their pesos for other currencies like US dollars, and back again because they simply cannot rely on their country’s fiat currency.

Positive sentiment towards digital currencies are reflected in the country’s workforce. Freelancers, who constitute over 28% of the employed population in Argentina, are driving this, with many opting for cryptocurrency settlements. Over half of these 12.6 million freelancers are already paid in cryptocurrency.

Many such freelancers will work for foreign companies and channelling their salaries into the country’s economy from abroad. Suppose the country’s authorities want to encourage more capital inflow and allow this capital to stimulate growth more effectively. In that case, they should actively promote crypto payments inside and outside of the country’s gig economy. 

A Crypto-Friendly Leader

Luckily for Argentina’s crypto-friendly workforce, President Milei’s blockchain-friendly stance on the matter has been unusually supportive for a world leader. He previously stated, “Contracts between individuals are the basis of the market.” These words encapsulate his vision for a market-driven economy where contracts between individuals replace bureaucratic processes – an ideal situation for blockchain to blossom. 

In a separate quote he advertised his forward-looking stance on a more decentralized future:

“We have to understand that the Central Bank is a scam. What Bitcoin represents is the return of money to its original creation, the private sector.” 

Milei has proposed to drive towards a dollar-based economy and eliminate ‘legal tender’ laws, enabling the free use of currencies and digital assets including stablecoins and cryptocurrencies. As Argentina makes this potentially painful move towards USD, crypto will be the perfect intermediary partner to promote to the population throughout the process as long as payment and transaction channels are open.

Milei is already making good on his previous comments. In December, he legalised the signing of contracts in Bitcoin and other cryptocurrencies. Companies that engage with the Argentine workforce should follow suit by offering these alternative payment channels to the workers who want them. Those companies that do will be able to work with an expanded field of talent and profit from this innovation. 

The Road Ahead

The benefits of using cryptocurrency for Argentina’s employees and employers are manifold. For workers, crypto offers a hedge against inflation, ensuring their earnings retain value. Employers benefit from the reduced complexity of international transactions and lesser reliance on the country’s traditional, unstable banking system.

Despite this, the road to widespread adoption of crypto payments isn’t as clear as it could be. Domestic firms need to advocate for using cryptocurrency as a legitimate means of payment and transaction. Concurrently, the government needs to continue to foster an atmosphere conducive to these changes that will allow a digital currency-enabled workforce to flourish and attract more growth to the country.

Argentina’s cryptocurrency integration into its workforce would be more than just a financial experiment; it’s a strategic move towards economic recovery and stability. As long as the government and Argentina’s industries allow it to happen, the country is poised to set a precedent in the use of digital currency for economic revival.

If these changes occur, cryptocurrency can emerge not merely as an alternative for Argentina’s workforce but as a beacon of hope and stability.

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Finance

Bond market signals a swift U.S. economic slowdown isn’t off the table 

by CoinNews
written by CoinNews

Investors and traders flocked back into the safety of U.S. government debt on Tuesday, causing long-term yields to drop in a manner that suggests rising worries about the risk of a faster-than-expected economic slowdown.

The benchmark 10-year yield
BX:TMUBMUSD10Y
ended down by 11.5 basis points at 4.171%, while the 30-year rate
BX:TMUBMUSD30Y
dropped by a slightly bigger magnitude to 4.306%. Those are the lowest levels for both rates since Aug. 31-Sept. 1, according to 3 p.m. Eastern time figures from Dow Jones Market Data.

Multiple factors appeared to be at play during Tuesday’s session aside from just U.S. growth prospects. One was expectations for a rate cut next year by the European Central Bank. Another is the decision by investors and traders to remove some term premium — or compensation that had been demanded for the risks of holding longer-term debt to maturity and was put into place earlier this year.

The third factor the market is weighing, even if it may not be fully reflected in Tuesday’s moves, is the possibility of an unexpectedly faster U.S. economic slowdown that could morph into a growth scare and undermine expectations for a soft landing, analysts said. The Atlanta Fed’s GDPNow estimate is for a 1.2% real GDP growth rate in the fourth quarter, down from 1.8% last Thursday.

LPL Chief Global Strategist Quincy Krosby said the 10-year yield needs to be watched closely because a faster downward pace of decline would suggest “a growth scare has taken hold.”

The benchmark 10-year rate finished 40.4 basis points below its 2-year counterpart
BX:TMUBMUSD02Y,
keeping the spread between the two yields negative. Ordinarily, the spread should be positive when investors and traders see brighter U.S. prospects ahead. It goes negative when pessimism generally prevails, and the spread has remained inverted since mid-2022.

Tuesday’s move in the curve “doesn’t quite yet suggest a growth scare, which would be accompanied by a more severe flattening of the 2s10s spread,” said Tom Nakamura, a currency strategist and co-head of fixed income at AGF Investments in Toronto, which managed $29.7 billion (CAD $40.3 billion) as of Oct. 31.

“At the end of October, the spread was inverted by around 16 basis points and is now inverted by around 40 basis points, versus more than 100 basis points back in the summer when more Fed hikes were expected to be delivered. We are at the stage where the market is still hoping for a best-of-all-worlds scenario of a soft landing, with growth coming down in a still-healthy manner. The next phase is, ‘do we get more evidence of a soft landing or does this snowball into something more severe like a hard landing?’”

Long-term yields finished at three-month lows on Tuesday as investors weighed a mix of U.S. data that included an update on job openings, which fell to a 28-month low of 8.7 million for October, and an ISM reading on the services sector, which picked up in November. Meanwhile, U.S. stocks
DJIA

SPX

COMP
finished mostly lower.

Tom Graff, chief investment officer at Baltimore-based Facet, which oversees around $2 billion, said Tuesday’s moves reflected some combination of headwinds facing Europe, prompting the need for a 2024 rate cut by the ECB, and term premium that was starting to come out of the U.S. bond market.

In addition, concern in markets “is shifting from solely worrying about inflation to now worrying about whether slowing economic data could continue,” Graff said, citing recent jobs- and manufacturing-linked reports. “I would be pretty concerned if Friday’s jobs data comes in weaker than October’s. A soft landing is the consensus now, but now we need to see if we go from a soft landing to a hard landing.”

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