Archives of “February 11, 2021” day

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Bitcoin extends to a new all time high, but backs off

  
Analysis, BITCOIN

New high reached at $48,373

The the price of bitcoin has extended to a new all time high at $48,373. That
took out the high from Tuesday at $48,204.
New high reached at $48,373_
Looking at the hourly chart, the price did correct off of that Tuesday high and sniffed near its 100 hour moving average (blue line), but still bottomed a bit a ways from that bullish above/bearish below barometer. The pair also bottom near the 38.2% retracement of the move up from the February 7 low at $43,939.86.
Now not is all so bullish as the new high has found some sellers and the price currently trades lower at $47,600. That is still up around $2580 on the day, but getting back above the $48,000 level will make traders a little bit more comfortable that they didn’t just by the high.

Tesla adds volatility to their balance sheet

  
  Analysis

Tesla and Bitcoin

Tesla and Bitcoin

When Tesla announced a $1.5 billion investment into Bitcoin it has also added a fresh layer of risk into its balance sheet. The recent volatility of Bitcoin underscores that element of risk. Bloomberg had an interesting piece on Tesla’s latest move stating that Bitcoin will need to surge to $500,0000 a piece to return what the S&P500 has over the last 10 years.This is showing a CAGR (compound annual growth rate of around 14%). The assumption was that Tesla invested in Bitcoin at January’s average price of £34,672.

This means that Bitcoin needs to reach $100,000 over the next 20 years for it to beat Tesla’s own return on equity which, according to Bloomberg is 5.36%. So, Tesla has tied up a new level of risk for its income statements and balance sheets in this latest move, for better or for worse. Tesla also joins the line of another high profile validation of Bitcoin. Mastercard has also announced that they will allow merchants to receive crypto payments this year.

Mastercard to start supporting crypto payments on its network

  
  Analysis

Big news from Mastercard

Big news from Mastercard
Back in October, I glowed about the news that PayPal would allow users to buy cryptocurrencies and this could be the next leg:
Mastercard says it’s bringing crypto to its network.
“We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network,” the company said.
The release doesn’t say which assets will be support but surely one will be bitcoin, which is at the highs of the day, up 7% to $48,000.
They do say that stablecoins won’t be supported.
To be completely clear, not all of today’s cryptocurrencies will be supported on our network. While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures, so they won’t meet our requirements
This is huge news and I think it will spark another leg higher in crypto.
It’s coupled with a report that BNY Mellon will also begin adding custodial services for bitcoin and other cryptocurrencies for clients, a move that’s been rumored for awhile.
“Digital assets are becoming part of the mainstream,” said Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses.
That says it all.

US initial jobless claims 793K vs. 760K estimate

  
Analysis, Economy

S initial jobless claims and continuing claims for the current week

  • prior week 779K revised to 812K
  • Initial jobless claims 793K vs. 760K estimate
  • 4 week moving average of initial claims 823K vs. 856.5K last week
  • Continuing claims 4545K vs. 4420K estimate. Prior week 4690K vs. 4592K previously reported
  • 4 week moving average of continuing claims 4748.75K vs. 4906.25K (revised)
  • Pandemic unemployment assistance 8,715,306 vs 7,218,801 last week (was 7,217,713). That is a gain of 1,496,505
  • 50 states reported 4,777,842 continuing claims for pandemic emergency unemployment compensation benefits vs. a revised 3,604,894 last week or +1,172,948
  • The largest increases in initial claims for the week ending January 30 were in California (+51,025), New York (+11,140), Florida (+6,322), Rhode Island (+4,684), and Pennsylvania (+3,844),
  • The largest decreases were in Illinois (-55,473), Kansas (-7,496), Mississippi (-3,107), Ohio (-2,181), and New Jersey (-2,156).

The claims and continuing claims were higher than expectations, but lower than the revised higher numbers last week. The claims for initial and continuing pandemic emergency assistance both rose sharply. As expressed by Fed officials, employment is well off full employment levels.

Initial jobless claims

Germany’s Merkel: Lockdown will not be maintained a day longer than necessary

  
  Analysis

Remarks by German chancellor, Angela Merkel

Merkel
  • The goal is to lift restrictions only when justified
  • We have achieved goal of reversing virus infection trend
  • We have stopped health system from being overburdened
  • But we have to prepare for new variants to become dominant
  • Only a matter of time before variants/mutations gain upper hand
  • That could destroy all the progress we’ve made
In case you missed it, Germany has announced that they will extend lockdown until 7 March. While that seems to be where they will start easing restrictions, Merkel has been warning about virus variants/mutations so that will be something to take note of in case it becomes more widespread and threaten another potential lockdown in Q2/Q3.

Yellen says misuse of cryptocurrency is a growing problem

  
  Analysis

US Treasury Secretary Yellen speaking to regulators and private sector attendees at a Treasury-hosted forum

 

  • says the US is seeing ‘explosion of risk’ related to fraud, money laundering, terrorist financing and data privacy
  • says pandemic highlighted problems of ‘broadband deserts’, lack of access to financial services for millions of people
  • says Treasury can leverage financial sector innovation to combat problems, promote financial inclusion and improve competitiveness
  • says misuse of cryptocurrencies and virtual assets is growing problem
  • cryptocurrencies have been used to launder profits of online drug traffickers, finance terrorism

 

more to come

Mastercard will start supporting select cryptocurrencies directly on their network.

  
  Analysis

The payments firm announcing “we are here to enable customers, merchants and businesses to move digital value – traditional or crypto “.

Not all of today’s cryptocurrencies will be supported
  • While stablecoins are more regulated and reliable than in the recent past, many of the hundreds of digital assets in circulation still need to tighten their compliance measures
  • Mastercard says it looking for crypto assets that offer reliability and security
Checking in for a BTC update:
The payments firm announcing "we are here to enable customers, merchants and businesses to move digital value - traditional or crypto ".
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