Crypto Market Cycles, Trump’s Tweet Storm Swaying Global Markets and Trading Psychology #24
Market Meditations | October 7, 2020
Crypto Market Cycles, Trump’s Tweet Storm Is Swaying Global Markets and Trading Psychology
The crypto markets continue to be quiet, surprisingly. Despite the bad news we’ve been receiving, large scale hacks, our biggest exchanges going down, world leaders getting sick, new regulations…
Bitcoin is holding its place for now.
Today we focus on education. Let’s take a look at a crypto market cycles through a few different lenses to get a better idea of where we are now, get up to date on all recent events and finish off by looking into a trader’s psychology.
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Surviving a Crypto Market Cycle
Ethereum Browser and Wallet App Metamask Now Offers Token Swap Functionality
FCA Bans Crypto Derivatives for Retail Consumers in the UK
John Mcafee Sued by Securities and Exchanges Commission for ICO Promotions in 2017-2018
Trump’s Tweet Storm Is Swaying Global Markets Again
Central Banks Flip to Gold Sales After Record Rally
Black Holes Suck in the Nobel Prize for Physics
The Importance of Trading Psychology
Surviving a Crypto Market Cycle
Except for the Bitmex news, there hasn’t been a major story to write about this week and with the decentralized finance (DeFi) theme going through a mini-winter since early September, it’s time for an educational piece. Bitcoin and Ethereum have matured a bit, but some crypto investors clearly went through a period of optimism and greed this summer when it comes to the altcoin market. As experienced investors like to say: Markets take the stairs up, but the elevator down. Are we in a new crypto bear market? Let’s have a look!
What’s a Market Cycle?
Ethereum Browser and Wallet App Metamask Now Offers Token Swap Functionality. Crypto’s popular browser extension Metamask now allows users to swap tokens from within the app itself. The news was announced on Tuesday, claiming that the new feature would request token prices from decentralized exchanges (DEX) and aggregators so that users can get access to the best prices available. MetaMask will support Uniswap, Airswap, Kyber, 0x API and more. This approach means that users won’t need to navigate these platforms individually to find the optimal price. On top of the new feature, the Metamask also announced it had reached and exceeded one million monthly active users, stating that ‘adoption of DAOs, Web3 games and the rapid consumer uptake of DeFi products and services has further accelerated our growth curve.’ Read more
FCA Bans Crypto Derivatives for Retail Consumers in the UK. The Financial Conduct Authority (FCA) has published final rules banning the sale of derivatives and exchange-traded notes (ETNs) that reference certain types of crypto assets to retail consumers. The financial regulator considers these product to be ill-suited for retail consumers due to the potential harm they pose, claiming that they could not be reliably valued by retail consumers for several reasons. the ban will affect “the sale, marketing and distribution” to retail investors of any derivatives contract or ETNs that linked to “unregulated transferable crypto assets”, including major cryptocurrencies like bitcoin, ether and XRP, issued by entities in or outside the U.K.The U.K. ban will come into effect on Jan. 6, 2021. Read more
John Mcafee Sued by Securities and Exchanges Commission for ICO Promotions in 2017-2018. The U.S. Securities and Exchange Commission (SEC) filed a suit against crypto investor and promoter John McAfee for his past promotion of initial coin offerings (ICOs) on social media. The complaint read that “from at least November 2017 through February 2018, McAfee leveraged his fame to make more than $23.1 million U.S. Dollars (“USD”) in undisclosed compensation by recommending at least seven “initial coin offerings” or ICOs to his Twitter followers.” Specifically, McAfee is accused of not disclosing that he was paid to promote the ICOs by the issuers and that the encouraged investors to purchase the securities sold in certain of the ICOs without disclosing that he was simultaneously trying to sell his own holdings. In a separate action by the Department of Justice (DOJ), McAfee has been charged with tax evasion. McAfee has been arrested in Spain where he is pending extradition and could face a maximum sentence of five years in prison for each count of tax evasion. Read more
Trump’s Tweet Storm Is Swaying Global Markets Again. Conflicted Twitter posts from Trump today have swayed the markets. U.S. stocks slumped on Tuesday while Treasuries surged after Trump tweeted that he had decided to halt stimulus talks. His posts during the Asian hours on Wednesday – calling for support for airlines and the Paycheck Protection Program – helped erase losses in U.S. stock futures and Japanese shares. Most Asian currencies crept lower amid uncertainty over the next round of U.S. stimulus. In total, Trump tweeted or retweeted just under 40 times in the space of two hours. That’s boosting market volatility, which has already picked up this month after Trump tested positive for coronavirus as investors grappled with the existing uncertainty surrounding the U.S. election and a stimulus deal. Read more.
Central Banks Flip to Gold Sales After Record Rally. Central banks became net sellers of gold in August for the first time in a year and a half, in the latest indication that demand for the metal is slowly following a record setting rally. Global central banks sold a net 12.3 tonnes of gold over the month, according to estimates published on Wednesday by the World Gold Council, an industry-backed body. The shift came just as the precious metal reached a record high above $2,070 a troy ounce in early August. It has since fallen more than 8% to $1,890 per ounce. The latest data reflect the pullback of some major buyers as countries free up resources to deal with the coronavirus crisis. Read more.
Black Holes Suck in the Nobel Prize for Physics. On October 6th, the Nobel-prize committee awarded the famous honour in physics to three people who have led a decades long effort on understanding black holes. Half the prize of SKr10m ($1.1m) went to Sir Roger Penrose of Oxford University, who built on Albert Einstein’s general theory of relativity to predict how black holes could form in the universe. Andrea Ghez and Reinhard Genzel, of the University of California’s Los Angeles and Berkeley campuses respectively, shared the other half for their decades of work mapping the movements of stars around the centre of the Milky Way. Their studies demonstrated that this is the site of an enormous cosmic object, which is assumed to be a supermassive black hole. Read more.
The Importance of Trading Psychology
Many skills are required for trading successfully in the financial markets. They include the abilities to evaluate fundamentals and to determine the direction of a trend. I write this newsletter to help my audience with this but the self-improvement section is designed to help my readers with something even more important: a trader’s mindset.
Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. I am not a financial advisor. Every investment and trading move involves risk. Do your own research when making a decision.