Executive Blockchain Advisory

It's been one year now since bitcoin achieved an outstanding all-time high of $20,155 per coin and today it seems we're testing new lows of $3,122, a total drop of 84.5%.

This massive slide in value may seem unprecedented but in fact, retracements of this magnitude have happened no less than four times in Bitcoin's short history. To get a better understanding of Bitcoin's price cycles please see this article that I wrote for Global Banking & Finance Review.

Because cryptoassets are such a new concept, we are still finding ways to figure out what the value of them should be. All assets in every market go through price discovery, but due to the rapid growth of the crypto industry, this process of price discovery is currently on steroids.

What does confuse me about market cycles, in every market, is the way that sentiment shifts to such extremes that traders end up preferring to buy when prices are high and to sell when prices are low when in fact they should be doing the exact opposite.

Today's Highlights

  • Bank Led Selling
  • Shut It Down
  • Bitcoin Advisor to the President

Traditional Markets

Stocks fell further on Friday with things turning downright ugly by the end of the day. There didn't seem to be any specific catalyst or news story driving the sell-off, just more of the same backdrop that we've been talking about for months already. 

One thing that did stand out on Friday though was that the banking sector was sold off more relentlessly than the rest of the markets as depicted in this graph from Bloomberg.

(Click on image to enlarge)

Also, it's clear by now that US Stock markets are generally under more pressure than their global counterparts so far this month.

(Click on image to enlarge)

It makes sense too. The US seem to be the ones leading the whole monetary tightening trend, followed closely by the European Union. 

We already heard from the ECB last week, which announced that it will be halting its QE purchases starting next year. This Wednesday we'll hear from the Fed, which is expected to raise interest rates by a quarter point.

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Disclaimer: This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of ...

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