By Aaron Hankin
Bitcoin plunges around 30% in 10 days, and 'there is no one left
to buy'
In a week where investors sought cover, one asset that had been
touted as a potential alternative haven to shield against any
market turmoil proved to be anything but that.
In the space of just 10 days, bitcoin, the world's largest
digital currency, fell through $6,000, then waved goodbye to $5,000
before eventually finding some support ahead of $4,000. All told,
the so-called next digital gold lost around 30% over those 10 days
and is down more than 80% from its all-time high.
Although just a fraction of the total value of global markets,
the demise of the nascent product has burned many of its
proponents, who saw it as an alternative to traditional currencies.
"Everyone who still believes in cryptocurrency bought all they
could afford months ago and now there is no one left to buy," said
Jani Ziedins of Cracked.Market in a Friday note to clients.
Further reading:Bitcoin is imploding -- here's where bitcoin
bulls and bears see it headed from here
(http://www.marketwatch.com/story/bitcoin-is-imploding-heres-where-bitcoin-bulls-and-bears-see-it-headed-from-here-2018-11-20)
Crypto aside, plummeting oil prices continued to push investors
to move out of riskier investments. Oil supply continues to outpace
demand, which has fueled a vicious selloff in prices and tensions
between the two biggest consumers--the United States and
China--have added to the uncertainty.
The West Texas Intermediate front-end contract fell more than 6%
on Friday
(http://www.marketwatch.com/story/6-key-reasons-the-bottom-is-falling-out-of-oil-prices-on-black-friday-2018-11-23),
moving to its lowest level in more than a year and closed out its
seventh-consecutive weekly loss.
"The truth of the matter remains that rising global crude supply
coupled with worrying signs of slowing demand have written a recipe
for disaster for the oil markets," wrote Lukman Otunuga, research
analyst at FXTM. "With an appreciating dollar rubbing salt into the
wound, the outlook for oil prices points to further downside."
Read:A death cross is forming in U.S. oil, underlining the
unraveling of crude prices
(http://www.marketwatch.com/story/a-death-cross-is-forming-in-us-oil-underlining-the-unraveling-of-crude-prices-2018-11-20)
Equity markets are in a similar place, as the three major
indexes had their worst Thanksgiving week since 2011
(http://www.marketwatch.com/story/stocks-poised-to-open-lower-in-black-friday-trade-notch-weekly-loss-of-more-than-3-2018-11-23),
according to Dow Jones Market Data. The Dow Jones Industrial
Average, skidded 4.4% and the Nasdaq Composite Index slumped 4.3%
in the holiday-shortened week, their worst weekly showings since
March. The S&P 500 lost 3.8%, its biggest weekly decline in a
month.
Energy-related stocks such as Marathon Oil Corp.(MRO) and Devon
Energy Corp.(DVN) ended down more than 4% on Friday alone.
Meanwhile, bonds have taken off as investors sought shelter from
market ructions. The slump in equities and oil prices has helped to
buoy prices for U.S. government bonds, pulling the 10-year Treasury
yieldto a 10-week low
(http://www.marketwatch.com/story/us-and-european-government-debt-yields-fall-after-weak-data-2018-11-23)
and closing in on its key psychological level of 3%. Only two weeks
ago, Treasurys were suffering under a one-two punch of inflationary
pressures and expectations for tighter monetary policy, and the
10-year yield nearly hit 3.25%.
A popular gauge of investor fear, the Cboe Volatility Index VIX,
rose 2.1% on Friday to 21.24.
Read:Junk bonds -- no longer 2018's darling -- flip to red as
the corporate debt climate deteriorates
(http://www.marketwatch.com/story/junk-bonds-no-longer-2018s-darling-flip-to-red-as-the-corporate-debt-climate-deteriorates-2018-11-19)
G-20 and Fed minutes take center stage
Members of the G-20 nations meet in Buenos Aires this coming
week, and investors are looking at what happens between President
Donald Trump and his Chinese counterpart, Xi Jinping. Given growing
protectionism, leaders of the industrialized nations are expected
to struggle to agree on a joint statement on trade.
"Expectations have slowly been dialed down about a possible
solution in the short-term with the prospect that tariffs could
well increase at the beginning of next year from the current 10% to
an increased rate of 25%," wrote Michael Hewson, chief market
analyst at CMC Markets U.K.
"While deal expectations have been set to a low level an
agreement to not implement the proposed increased rate at the
beginning of next year could be described as progress."
Read:Growing U.S. trade deficit with China may prevent Trump and
Xi from year-end deal
(http://www.marketwatch.com/story/huge-us-trade-deficit-with-china-may-prevent-trump-and-xi-from-year-end-deal-2018-11-20)
Climate change is expected to be another hotbed topic.
Read:Climate change will wreck economic growth, major government
report says
(http://www.marketwatch.com/story/climate-change-will-wreck-economic-growth-major-government-report-says-2018-11-23)
Elsewhere, the Federal Reserve will release the minutes of its
Nov. 7-8 meeting. The committee has reiterated its plan to raise
interest rates three times next year, however, markets have begun
to price out the chances, which now stand at 9.5% down from 33.1%
on Nov. 8, based off the fed fund futures market where traders can
bet on the direction of monetary policy.
Read:Traders betting on a dovish Fed have it all wrong: SocGen
economist
(http://www.marketwatch.com/story/traders-betting-on-a-dovish-fed-have-it-all-wrong-socgen-economist-2018-11-21)
(END) Dow Jones Newswires
November 24, 2018 08:34 ET (13:34 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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