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How the crypto market is reacting to the imminent US elections

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With less than 30 days left until the race for the White House, markets appear to be dealing with an increasing level of political uncertainties. The impending election is coming as a conclusion to a chaotic year featuring business shutdowns and monetary inconveniences, amid fighting against the infamous global pandemic surprise, COVID-19. Several tweets from the incumbent president relating to the election, have been seen to impact greatly on the stock markets as well as Bitcoin and other crypto assets. 

Political uncertainty at every point has been a function burdening the market and keeping traders anxious as they strived to analyze the possible outcome. On his part, President Donald Trump has increasingly claimed in many of his tweets that his opponent, Joe Biden would crash markets and tax the country into depression should he win. 

Through the course of the month, various events, announcements, and actions have impacted significantly on the price action of the crypto markets. First, Trump’s diagnosis of the coronavirus and afterward, his announcement to end stimulus negotiations. 

The President’s COVID-19 diagnosis further heightened the uncertainty already associated with the election. Following immediately after the announcement, U.S stocks fell along with Bitcoin and Other cryptocurrencies. 

Crypto markets reaction alongside Trump’s COVID-19 recovery

On the second day of October, President Trump confirmed via Twitter that he had contracted COVID-19, along with the First Lady, Melania. He announced that they would both immediately begin with quarantine and in a more optimistic tone, noted that they would definitely get through the illness.

Both stock and crypto markets showed  an immediate reaction towards this announcement. The S&P 500 and the Dow Industrial Average both experienced a notable loss as the markets opened low following the announcement. Bitcoin, which seems to be moving in tandem with the stock markets, led the losses with a record of 4% loss in 24 hours after the announcement. As usual, other altcoin markets followed Bitcoin’s lead and acted accordingly. The overall market capitalization for the crypto markets dropped by 3.6%.  ETH experienced a 4.8% plummet in price, while Chainlink recorded a 7.5% loss also in a span of 24 hours. Gold, on the other hand, traded higher upon the announcement of Trump’s diagnosis. 

After the immediate slight drop, price movements remained quite steady. However, the market started showing an inverse reaction from the initial losses and began to react positively following Trump’s announcement of a likely discharge. The declaration led to a major spike in the price of Bitcoin.

Trump shocks financial markets by ordering a halt to stimulus negotiations 

For months now, negotiations for a second COVID-19 stimulus package for United States citizens have been ongoing. However, President Donald Trump surprised the markets by unexpectedly announcing via his Twitter page his plans of postponing the stimulus talks until after the 2020 presidential election.

“Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”

Trump ordered a halt to negotiations till after the election on November 3rd. He added that Pelosi was “not negotiating in good faith”. 

The market seemed to have met this announcement with clear disapproval as the price of BTC dropped in sync with the visible fall experienced in stock markets shortly after the declaration, Ethereum, and other major altcoins also suffered a plummet in price. The price drop in bitcoin along with other mainstream markets, is a clear indication to support the view that bitcoin continues to correlate with traditional markets as its price action appears to react in tandem with them. 

It is commonly acknowledged that the performance of the stock market is majorly reliant on Trump’s position. This implies that if Trump should lose the election, the stock market will fall into a chasm. The American stock market likes Donald Trump because he cuts taxes for the stock market. So if he wins, the US Dollar will rise along with the stock markets. 

However,  the stock markets continue to rise even though it is believed that Biden might win. The possibility of Biden winning the election gives more prospects towards the collapse of the US Dollars. The shrinking in its interest rates would make it less enticing, compelling investors to contemplate deposits in other currencies. With this, the US Dollar is at a threat of losing its perceived safe-haven reputation and might not be able to secure its status as world reserve currency. 

Bitcoin is currently a standout amongst other performing assets of the year, notwithstanding, with the coming of the US elections which is expected to bring about the weakness of the dollar, we can anticipate a further fuelling of the top coin for the remainder of 2020. 

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Crypto Assets

Crypto prices drop as global market fear increases

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Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

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Crypto Assets

6 Cryptocurrencies to leverage for Building Personal Wealth Long Term

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“Investing in Crypto should be viewed as another path towards financial independence that can help people beat inflation over time.”

—Alex Mashinsky (CEO, Celsuis)

The Crypto market is blooming. Nearly 1 in every 3 individuals in Africa, particularly Nigeria, currently trade cryptocurrencies for one purpose or the other. For more than a decade now, blockchain technology has pervaded the financial markets and persistently received traction from various quarters. Its adoption rate in Africa is a force to be reckoned with. The reports are glaring enough. This has then cultivated the growing appeal of the people in trying to employ crypto as a viable tool to build wealth, albeit long term.

Recently, thousands of cryptocurrencies were known to exist in the market and the numbers keep expanding. It is, therefore, imperative that these digital coins are closely observed to identify the favourable ones for a long-term game. We, at Decentralize Africa, know this. You don’t need to make any emotional rush. This is why we’ve put together highlights of sustainable cryptos that can help you build a fortune over time if you play your cards right.

  • Ethereum (ETH)

Coming first on the pack is Ethereum. The reason for this is not far-fetched. Earlier this year, ethereum was said to have amassed a market capitalization running into billions of dollars. As if that is not enough, Ethereum pointed out its plans to remake its consensus algorithm. This will in no small measure help the crypto network perform several seamless operations and that too with reduced energy. 

The major change that was done to Ethereum’s network, i.e, a modification to Proof-of-stake, will enable players in the system to pitch ethers in a more protected and also rewarding account. This is quite comparable to the bitcoin system. So, yes, Etherum is something that should be in the plans. 

  • Stellar (XLM)

Of course, Stellar has to find a place here, innit? For one, the cryptocurrency holds promising potential for those interested in the long shot. It is more or less a fertile space in the string of blockchain networks. Most of us are privy to how tedious, cross-border transactions tend to appear. This is where Stellar comes in. The versatile platform is capable of completing payments in a matter of seconds at a meagre fee; which is payable using the Stellar coins. Stellar’s efficiency is no doubt commendable. Although like most coins, it has had its share of a downward trend in prices, there is no doubt that Stellar is yet to reach its peak. As such, analysts have observed that there’s room for expansive growth as the year’s roll by. 

  • Bitcoin (BTC)

This sequence is deliberate though. We all know the mighty bitcoin will be here, don’t we? Bitcoin has amassed a wild price range, an ever-growing market capitalization and its prospects for investment opportunities speak loud enough. Although there is an influx of cryptocurrencies today, Bitcoin embodies a large percentage of the market value. 

Investing in bitcoin is never a bad business. It has its lows of course, but it jumps pretty back in most cases. Its wide acceptability is a testament to this fact. Several companies are integrating bitcoin in their payment structure, and business-men, banks are not left in the loop as well.

  • Solana (SOL)

Interestingly, Solana is one of the few digital coins to maintain a steady rise in value. It came up the pack in 2017 and has since improved its value system over time. It offers enticing packages, by being used to complete rapid transactions and every other thing that makes it a good catch. Solana might seem a bit obscure at the moment, but it is certainly one of the best to look out for.

  • Chainlink (LINK)

More accessibility means more acceptance, right? Chain-link is that cryptocurrency that’s relatively available to most people. It’s inexpensive and a good store of value as well. This is one of the reasons that attracts many investors to it. If you are looking to invest in a cryptocurrency in this context, this is one of the coins that can help build your financial portfolio in the long run. 

  • Cardano (ADA)

It is observed that the Cardano network holds a somewhat appealing impression for myriads of reasons. It consumes far less energy which then translates to a faster transaction rate. Also, it proves to be secure and it is one blockchain network that is quite keen on developing its systems.

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Bitcoin in Africa

ICE3X, One Of South Africa’s Oldest Crypto Exchange Cease Operations

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ICE3X

ICE3X, one of the first and oldest crypto exchanges in South Africa and across Africa which was founded in the year 2013 with roughly 80,000 clients ceased operations permanently due to low liquidity.

Earlier this year, ICE3X announced that they noticed some discrepancies in the balances pertaining to Bitcoin and Litecoin held on the platform on March 16. After several consultations and deliberations with their partner Merkeleon.com and subsidiary Coinspaid.com, no satisfactory conclusion was reached.

But on the advice of their auditing and legal team, ICE3X suspended deposits and trading of cryptocurrencies on their platform. In addition, Bitcoin (BTC) and Litecoin (LTC) withdrawals were also suspended pending the outcome of a full investigation and reconciliation.

ICE3X said that clients holding cryptocurrencies on their platform excluding Bitcoin (BTC) and Litecoin (LTC) will be able to withdraw their funds. They further said that this was done in protection of their clients.

On March 23, withdrawals from ICE3X platform by clients were totally disabled, and it was announced that withdrawals would now be done manually – clients would have to submit their withdrawals request via a Google Form.

The homepage URL of ICE3X which is ice3.com. Users will now be redirected to https://ice3x.co.za/status-update/ with no withdrawals support for Bitcoin (BTC) and Litecoin (LTC) yet, but clients were advised to place their withdrawals request for both.

On April 6, according to the website of 1CE3X, the South African Crypto Exchange will not be returning back to operations and advised to start their liquidation proceedings. Also, there are no longer withdrawal requests pending for any currencies except Bitcoin (BTC) and Litecoin (LTC).

At the point of writing this article, the latest update from ICE3X, shows that all withdrawal requests submitted up to April 6 have been rectified and all the remaining assets either cryptocurrencies or fiat are held in trust by Manong Badenhorst & Badenhorst Attorneys. Also, liquidation proceedings have been initiated and clients are advised to download the requisition form, which should be sent as a mail to avj@natliq.co.za.

Recently, Binance announced that ZAR trading pairs was delisted from their platform, according to the official Twitter handle of Binance Africa on March 31. It was recommended that users either trade out of their ZAR positions or withdraw all their ZAR balances before April 2, 10:00 AM (UTC). The affected trading pairs are USDT/ZAR, BTC/ZAR, ETH/ZAR, BUSD/ZAR, BNB/ZAR.

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