Conventional wisdom says that even if the Bitcoin bubble pops, as it’s been threatening to lately, the damage won’t spill over into the broad stock market. That’s because in dollar terms, the cryptocurrency craze remains tiny compared to, say, the dotcom boom, which led the broader market to a painful crash in 2000. Still, there are three plausible ways the bursting of the Bitcoin bubble could gore the aging bull bitcoin and Other Cryptocurrencies Are Soaring Again—For Now in stocks, which is about to turn 9 years old in March.
1: The Bitcoin bubble bursts investor confidence. Jim Paulsen, chief investment strategist at The Leuthold Group, an asset management firm based in Minneapolis. Paulsen points out that Bitcoin prices didn’t really start to rise dramatically until the end of the third quarter of 2017, when it became clear that the economy was accelerating. In that sense, Bitcoin has a tangible connection to stocks.
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The same investor confidence that’s been fueling risk-taking and speculation in the global equity markets has also been behind the cryptocurrency rise that accelerated in the fourth quarter of last year. So while a collapse in cryptocurrency prices won’t necessarily have an economic impact on equities the way the Internet bubble did, it could have a domino effect on investor psychology. 2: Companies jump on the Bitcoin bandwagon just before a crash. In the late 1990s, investors started noticing something: All a company would have to do was to put a dotcom at the end of its name or include a sentence in a press release about launching an e-commerce site, and the stock would jump. Well, something similar is happening with cryptocurrencies today, and that’s pulling more and more companies into this frenzy—making its impact on the economy much larger than the market value of cryptocurrencies would suggest. 9, Kodak shares have more than tripled in value. Kodak then doubled down on crypto.
10 chicken tenders, fries, a medium side dish, gravy, and dips—that can only be purchased using the virtual currency. Some companies aren’t just dabbling in cryptos. They are changing their entire business models. Late last year, the biotech equipment maker Bioptix changed its name to Riot Blockchain and its business plan to investing in cryptocurrencies and blockchain technology. The same thing happened with Long Island Iced Tea, a little-known beverage maker that changed its name to Long Blockchain and its business model to investing in blockchain technology. But as many market watchers point out, Pets. 1990s—until the bubble burst and the fog lifted.
3: A cryptocurrency crash has a Wile E. Once they realize there’s nothing support them, they start to drop. In other words, investors are often willing to keep going in one direction, even if it seems risky or irrational, until they’re jarred. But when they are scared or shaken enough—for instance, by a financial collapse, like in the global financial panic in 2007—they start looking down at their feet and notice how dangerous their strategy really is. Is a crash in Bitcoin a big enough to get investors’ attention?
You can’t hardly go anywhere in the financial world or financial press without seeing a mention of Bitcoin. Money may receive compensation for some links to products and services on this website. Offers may be subject to change without notice. Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc.
P Index data is the property of Chicago Mercantile Exchange Inc. Powered and implemented by Interactive Data Managed Solutions. When it comes to making big money in trading, the trend is your friend. But spotting the trend early is challenging. Crypto exchange Huobi is now offering a business arm to help customers build their own digital asset exchanges. A break could be imminent as bitcoin has been consolidating for three days.
But while the charts say bullish, plenty of resistance awaits. A new arm of the Malta Stock Exchange is partnering with Neufund to launch a stock exchange for tokenized securities and crypto assets. Bulls are back with a vengeance as shown by a 100 percent increase in trading volume from just four days ago. Paxful says business is surging in developing nations, where mobile phones are abundant and cheap, but access to exchange platforms remains scarce.
Don’t lose faith in stocks, but do learn to play defense. THE OPTIMISM IS BEAMING like the summer sun. Here’s how VCs are dealing with the wild world of ICOs. Sign Up for Our Newsletters Sign up now to receive FORTUNE’s best content, special offers, and much more.
Alex – March 3, 2017
Fortune may receive compensation for some links to products and services on this website. Offers may be subject to change without notice. Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. P Index data is the property of Chicago Mercantile Exchange Inc.
Powered and implemented by Interactive Data Managed Solutions. An endgame scenario is unfolding in the financial markets that could result in an explosive move higher for safe haven assets. As long as US equities remain the risk-off trade, du jour, the PMs may remain in a cyclical trading range. The nascent trade skirmish has already impacted the housing sector.
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The additional expense is passed along to the home purchaser. Already desperate domestic farmers are finding it even more challenging to make financial ends meet, amid soybean tariffs on Asian imports. The key impact of tariffs could be stagflation, as higher prices stifle global economic output while encouraging price hikes. A final warning from a US ally echoes the sentiments of history – when trade halts between national borders, more often than not, military boots cross. Head of the Trends Research Institute, Gerald Celente expresses concerns over the potential for a showdown of epic proportions in the Middle East.
Extreme tensions in the region could ignite the crude oil market, sending price per barrel soaring while sparking a stampede into the precious metals sector. The theme could benefit gold shares as well, according to the work of Seabridge Gold CEO, Rudi Fronk, who notes peak gold is in place. Barrick Gold CEO noted that the ailing quality of gold quality ore and lessened production levels combined with few major new gold discoveries and lengthy time to production, bodes well for the gold price. The expert close-combat practitioner examines the nascent global trade war, sparked by the 2018 US trade tariffs. While policymakers applaud record unemployment rate, when adjusted for inflation the real employment wage lags price increases. Low wages hampers the disposable income of the masses, widening the gap between the wealthy and the hoi polloi beyond any industrial nation, worldwide. US share prices may be overextended, as the initial tax cuts behind much of the recent rally unwind and only a handful of key stocks in the tech sector.
The FANG stocks continue to lead the indexes higher. The discussion concludes with strategies for personal protection and close combat – Gerald Celente suggests a free online resource for individuals interested in self-protection, Attackproof. The Only Reliable Self-defense Training, Period. Market volatility may explode next month – June 6th – 14th could be a difficult time in markets.
The current period is the longest consolidation without a new high in years, suggesting slowing momentum in US share prices. Arch Crawford is heavily short the US equities markets and expects the bearish side to remain the most profitable along with highly rated US bonds. The gold market continues to test key support – the price could soon stage a rebound rally. Stephen Leeb returns with a solid outlook on the gold sector. The precious metals could merge with the blockchain to facilitate sound money transactions at an accelerated pace and with far greater transparency. With light sweet crude oil breaking multi-year records, the threat of inflation could further encourage the gold bulls. Our guest notes that repairing decades of unfair global trade is sound, but the lack of subtlety, diplomacy, cooperation and gung-ho actions could backfire.
If NASA engineers found landing a human on the moon challenging, economists may be facing a far more daunting task while resolving the the trade war. RAND, Bell Labs, Fairchild Semiconductor and other skunkworks projects that paved the road to today’s technological marvels. Bob Hoye of Institutional Advisors rejoins the show with upbeat commentary on the PM’s sector. If the current price hike trend continues with two more anticipated by the FOMC this year, the inversion could portend trouble for the financial markets. Our guest notes that the US has two previous failed experiments in trade tariffs, first “The Tariff of Abominations of 1825,” and the 1930 Smoot-Hawley Act. Both Tariff Acts were accused of exacerbating the unemployment, slowing economic growth and curtailing global trade.
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Officials are advised to proceed cautiously with the current trade tariffs to avoid crushing global economic contraction, collapsing global trade and widespread unemployment. Stagflation has positive implications for the PMs sector, as illustrated by the 1970’s gold bull market, case study. Fed policymakers will reverse hawkish rate hikes and resume dovish rate cuts to restore normalcy to the markets. According to some economists, this exacerbated the Great Depression. The duo examine if the current trade war could be combine with higher rates to foment a new Great Recession. Our guest outlines a possible case for hyperinflation, similar to Venezuela, where the Bolivar went from near parity with the US dollar, to virtually zero, requiring tens of millions of Bolivar to purchase a single ounce of gold.
Head of The Morgan Report, David Morgan rejoins the show with comments on the PMs sector noting that gold remains a “free lunch” diversification asset. The most negatively correlated asset to the US stock market is gold. The new trade war resembles the Smoot-Hawley Tariff Act of 1930, which ultimately lead to losses in US jobs and exports abroad. 88 years later, the US economy has hemorrhaged 500,000 top paying manufacturing jobs per year for over one decade, over 5 million fewer jobs.
Our guests applies Elliott Wave analysis to the gold market, noting that the early I and II waves have passed. III is now gaining momentum to send the market to new record figures. 2,500, our guest suggests a blow-off phase could commence sending the precious metals higher by several fold. Building a solid portfolio with balanced betas combined with portfolio alpha-boosting services like the Alpha Stocks Newsletter can enhance profits.
Head of The Morgan Report, David Morgan rejoins the show with comments on the PMs sector noting that gold remains a “free lunch” diversification asset, “the most negatively correlated asset to the US stock market. The financial sector tends to lead the market, which is a bad omen for bulls as many financial stocks continue to underperform. The Dow Utilities Index, a perennial favorite leading-indicator remains close to the April highs. If price closes above 711, the current stock market weakness may represent a passing anomaly.
30 blue chip stocks currently indicates an upside limit of 28,000. The lower limit of 23,000 and the highest probability of 25,000-26,500. Using financial history as a playbook the current 9-year secular bull-market could extend beyond the imagination and margin of the most ardent bears. OPEC announced lower than expected daily oil output of 600,000 barrels per day, sending the price soaring this week. US trading partners have recycled trillions of US dollars vis-à-vis the massive trade deficit, by way of buying US Treasuries, resulting in the longest bond bull. The four decade theme could be reversing on reports that the BRICS nations are dumping US debt, including Russia, which just sold half of its US Treasuries. 75 million Bolivars in just a few months time.
75 Million Bolivar – Hyperinflation in Ven. Rich Dad expects for most investors to relinquish gains via illiquid assets such as sluggish mutual funds. The investor herd has little knowledge of key alternatives to equities, which will further exacerbate the dilemma. Gold remains the ideal hedge against inflationary economic policies and unscrupulous activities. In 2000, the US dollar was the de facto currency to own – today investors have many alternatives, such as the Euro, Bitcoin, PMs, etc. Gold is the best financial portfolio insurance policy, the only money official sanctioned from above, “Gold is God’s money.
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For investors seeking income, dividend yielding US equities are advisable, notes our guest. What could drive PMs prices higher? Our trading “partners” are already starting to make it clear that they don’t need us. Tensions between the US and key nations continues to ratchet up on the heels of Group of Seven nations talks in Canada this past weekend. The trade feud between Washington and Canada, Mexico, Europe, and China is intensifying. French President Emmanuel Macron proposed the US is wrecking global diplomatic relations, calling for the US to be removed from the G-7 group. According to Labor Department report, US jobless claims fell slightly this month, with the number of layoffs in the U.
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Initial weekly jobless claims dropped 1,000 to 222,000 for the week ended June 2. The number of Americans filing for unemployment benefits unexpectedly declined indicating tighter labor conditions. The unemployment rate remains at a 18-year low of 3. The sea change could displace more jobs than can be replaced over the coming years, leading to a global unemployment epidemic without viable solutions.
The massive JP Morgan silver short position and it’s potential to cause an epic short-squeeze, sending the price of silver skyward. Policymakers noted expectations for the already tame unemployment rate of 3. 17 years, to drop further to 3. The yield curve is vulnerable to inversion after the Dec. FOMC quarter point rate hike, leading to an economic slowdown as soon as the summer of 2019. China remains a wildcard that has the smart money accumulating safe haven investments ahead of potential economic sanctions related blowback. JP Morgan silver short position and it’s potential to cause an epic short-squeeze, sending the price of silver skyward as well as silver producers such as First Majestic with CEO Keith Neumeyer.
Given the downturn in the long-running credit cycle, considerable QE efforts will be required via CB monetary policy to maintain the status quo. CB, QE operations oftentimes result in unexpected consequences, in particular, runaway inflation, which bodes well for precious metals investors. Investors must search for “real, tangible wealth,” and no asset class better fulfills this characteristic than gold and related shares. The precious metal remains a leverage play on gold with the benefit of its industrial appeal. Semiprecious metals are also of interest, including nickel and indium, as tangle assets become rarer and more difficult to mine.
The show wraps with a brief discussion on the benefits of intermittent fasting and hourly exercise breaks. The AMA recommends walking briskly every hour for at least 2-3 minutes to reduce the symptoms of pre-diabetes and Type II diabetes, promote healthy cardio function, reduce arterial sclerosis and enhance quality of life. Global financier, Martin Armstrong of Armstrong Economics rejoins the show with this latest market commentary. Despite the coordinated Herculean efforts of global central banks, low rate policies have failed to revive the economic patient. Pension funds and related retiree accounts have suffered through impossibly low rates, further compounding the difficulties facing already strapped retirees. The EU was doomed from the onset due to the lack of homogeneity within the cultural, socioeconomic environment among member states.
Martin Armstrong expects the PMs sector bull market to return when the typical investor loses confidence in monetary policies. The Armstrong economic model currently expects the near parabolic climb in US equities to continue, with the Dow Jones potentially doubling again from current levels to has high as 50,000. Paul Craig Roberts from the Institute for Political Economy, author of several best-selling tomes, rejoins the show with solid news for PMs aficionados. US has suffered the loss of 500,000 manufacturing jobs per year for over a decade. The US will deploy aluminum tariffs with Mexico and Canada as soon as this Friday, noted one report.
Our guest views tariffs on such manufacturing inputs as counterproductive. Globalism and neo-liberal economics, have essentially destroyed the national manufacturing base and ruined the country. While true “free trade” benefits all nations involved, the trouble stems from “absolute trade,” which benefits one nation over the other trade partner. The same malevolent processes are taking place in Italy, France, U. He views the gold and silver safe havens as the only viable shelters from an impending economic maelstrom of epic proportions. The current period is the longest consolidation without a new high in years, suggesting waning momentum in US share prices.
Our guest expects fireworks in the gold and silver shares market, as Fed policymakers backpedal on rate hikes. To save the domestic economy from deflationary collapse, policymakers will turn dovish and expand the balance sheet in the next round of quantitative easing. Investors have already factored in the Fed’s rate hike program, which could culminate in a buy the rumor, sell the dollar scenario to the benefit of the PMs. A worst of world’s 1970’s style inflationary economic-slowdown is inevitable, but on a much greater scale, perhaps culminating in total global financial meltdown. Eventually the euphoria surrounding US equities rally will fade, sending the PMs rocket en route ” to the moon. Peter Schiff suggests high yielding defensive and pharmaceutical stocks, and selected for his clients.
The host agrees on the importance of return of funds as well as return on funds, noting that virtually all of the Alpha Stocks Portfolio Candidates include higher than typical dividend yields. Bob Hoye of Institutional Advisors rejoins the show with comments on the global financial bubble. This could be the most exciting time in 400 years for investors, amid robust economic conditions in US equities as well as industrial commodities. The blockchain revolution will transform the field of finance and economics through frictionless and virtually anonymous transactions.