Encryption can be described as a money market recently howling, bitcoin from the beginning of November 15th, within a week fell 30%, fell below $4300, as of today, bitcoin price of $4436.
Today, we are honored to have come from Coinful Capital (with a focus on encryption currency quantitative trading, and has more than 100 million dollars scale management experience) Jackson Wang, from a macroeconomic perspective, and bitcoin cash hard bifurcation the effects caused by the recent collapse of encryption currency market analysis.
The future economic status from the U.S. debt spreads
In 2008, the financial crisis has in the past ten years, many people may have forgotten the subprime mortgage crisis, financial institutions suffered years of greed. When the U.S. housing bubble, regulators dereliction of duty (mainly on loan and other financial derivatives issued no control number), excessive credit rating agencies rating; and the American government in crisis management is poor, not aware of the seriousness of early, until the stock market crash to react to rescue.
Bitcoin is in the period of decline, Nakamoto at that time to the world cast a seed. Up to now, we have experienced at the end of 2017 cryptocurrencies bull market together, and now the lingering sluggish market conditions.
In recent years, under the leadership of the United States in the Trump, take the tax cuts and other policies to stimulate the domestic economy. When the dollar continued strong U.S. economy and booming behind, there are the Fed will raise interest rates, shrinking table, treasury bonds and other policies. It led to the current two-year Treasury yields continued to rise and decline in U.S. bond prices (interest rates will lead to yields pulled up, and a large number of bonds leads to the imbalance between supply and demand. It must be noted that the yield and price of a bond is the inverse relationship).
“However, as the Federal Reserve will continue to raise interest rates, the European Central Bank is about to exit the QE, in the past a lot of money to spill out of the situation is changing, in the past the influx of various types of assets cash flow will gradually be central to recover, and the yield curve is gradually upside down.” Jackson Wang said to the financial field.
Ten – and two-year Treasury yields difference (Source: Quandl) –
Therefore, since the yield spread (the difference of the yields on the 10-year Treasury note and two-year), today the gap has been shortened to 0.25%, the market is expected from the “economic overheating” to “recession”. Although always spreads are regarded as a reliable economic forecasting index, but we must also understand that the Treasury yield spreads and economic correlation, rather than absolute causality.
:QE Quantitative Easing, quantitative easing -, the government will use open market operations, increase market money supply monetary policy. The yield curve inversion, which refers to the current short-term Treasury yields will exceed the long-term treasury yields.
Bitcoin is become an independent school in the investment market?
In the past, some people expect bitcoin market to become the so-called “safe havens”, but according to the current situation of the observation, encryption money and traditional financial markets are still biased positive correlation. On the other hand, the market also some people think that one of the leading indicators of bitcoin index belongs to the economic situation in some aspects of the.
Jackson Wang also told in Finance: “first of all, the virtual currency can not be insulated from the traditional financial market, so I first expounded the current situation from the traditional financial market after the global financial crisis, the central bank released a large number of liquidity, more money to overflow under the condition of various asset classes have seen a sharp rise in price.” Jackson Wang continued,
“The market is generally expected in 2019 or 2020 will usher in a recession, so since October this year, U.S. stocks tumbled more than 10%, and this is just the beginning. The virtual currency represents in the traditional financial market is high beta risk assets, with the overall market risk sentiment to turn evil, a candle in the wind is the virtual currency market.”
Bitcoin cash (BCH) the fire spread market
The hard bifurcation relate to the differentiation of the BCH community, there are differences in the consensus on the two camps, respectively support different ideas, resulting in the entire network is split, resulting in a new crypto currency by birth. Network division will affect the exchange, Chibidaigou, pool, ore miner, will also affect the current market value of encryption currency bitcoin largest (Bitcoin).
The effect of BCH bifurcation hard bitcoin, Jackson Wang said:
The “virtual currency market has undergone a major event in November 15th, which is BCH hard ABC and SV bifurcation, the opposition between the fourth big market is the market value of the virtual currency BCH split into BCHABC and BCHSV, with the stock market to compare can think that it is stock market shares in the IPO, but the market chase funds are still the same, other conditions unchanged is the natural result of the stock price fell.”
15 this month, bitcoin cash split into two Bitcoin ABC, Cash bifurcation coins, Bitcoin Cash SV. The community is split into two camps, which will weaken the BCH community strength, capital flow and their attention will reduce the price of BCH, downside risk is as it should be.
“So hard after BCH bifurcation BTC below the strongest this year since the support interval of $6000, $6000 for a break, straddle the outcome had been, then what we all know, BTC has fallen below the 4300 mark in just a few days.” Jackson Wang said.
In a word, in addition to bitcoin cash hard bifurcation market also fell that event, is the result of the U.S. regulators attitude, as well as OKEx commodity futures and other reasons. In the short term bitcoin will be how to go, keep the new lows support, can rebound trend; and how to associated with traditional financial markets, will be one of the direction of the investment community focus on the.