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Here is Why Cryptocurrency, U.S-Dollar Quoted Commodities Drop this Week

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The United States is the world’s largest economy and cryptocurrency’s biggest investor, it means large number of capital inflow into the crypto space are from the United States and with the U.S economy battered and unstable due to COVID-19, foreign policy, etc US investors, mainly institutional investors, have been increasing their investments in crypto space, the new safe haven, in the last one year.

However, on Friday, the U.S commerce department released retail sales report, which measures US consumer spending that contributed over 70% of US GDP estimated at about $13.4 trillion. Retail sales that has been on the  decline for months and was predicted to come out at – 0.8%, unexpectedly came out at 0.7% in the month of August.

The unexpected improvement in consumer spending, in fact against the Consumer Confidence report that came out previously, bolstered U.S dollar attractiveness to 94 on dollar index as investors jumped on it and other dollar assets.

Why did investors jump on Dollar and how does it affect crypto and U.S dollar-quoted commodities?

The US dollar rose to a three-week high because capital inflow into American assets jumped as investors started predicting that the Federal Reserve (US central bank) could announce tapering (cutting down on bond buying -quantitative easing) at the Federal Open Market Committee (FOMC) meeting scheduled to be hold next week.

Quantitative easing is when government is buying debt (bonds) to support the economy. However, when government is cutting bonds purchase, it means the economy has started doing well enough to sustain itself without support.

This is why capital flow out of crypto space rose as institutional investors that are sustaining the crypto are now dumping their money on dollar assets – the very reason dollar value rose since Friday.

Market is about demand and supply, no demand in crypto space means falling/bearish market and demand in dollar means stronger US dollar – I actually bought dollar -sold GBPUSD- on Monday.

Here is why dollar quoted commodities like crude oil dropped. It is simple, because dollar products is now expensive for holders of other currencies. Therefore, demand for crude oil dropped against constant supply.

If FOMC announces tapering earlier than expected next week, crypto could fall even more!

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Bitcoin

Bitcoin´s New All-time High Underscores its Mainstream Value

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Bitcoin is undeniably a mainstream asset class and most investors should consider including crypto assets as part of a diversified portfolio, asserts the boss of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The bullish observation from Nigel Green, CEO and founder of deVere Group, which has $12bn under advisement, comes as the world’s dominant cryptocurrency hits a new all-time high of more than $66,000 on Wednesday.

Mr Green notes: “In July, we publicly predicted that Bitcoin would reach and most likely beat it’s previous all-time highs.

“I am confident that whilst there might be some profit-taking in the near-term, so that investors can accumulate more later, the momentum is such that we can expect prices to continue on their upward trajectory.”

He continues: “This fresh all-time high deniably cements Bitcoin as a mainstream asset class.  I believe that most investors should consider including crypto assets as part of a diversified portfolio.

“Why? Because crypto is the inevitable future of money and there is clearly going to be advantages for those investors who have exposure early on – in the same way as those who invested in the major internet, online and tech successes back in the day, such as Amazon, Google and Apple, have secured enormous returns.”

Wednesday´s price highs come as the ProShares Bitcoin Strategy ETF – the first of its kind – launched on the New York Stock Exchange on Tuesday at the opening bell.

The deVere CEO says there are there are five main factors that will secure the longer-term upward price trajectory.

“First is the U.S. Federal Reserve saying it has no intention of banning cryptocurrencies. It’s highly probable that other cryptocurrencies will have more stringent regulatory oversight, yet Bitcoin could be viewed differently by authorities partly due to its gold-like status,” he observes.

“Second is the ongoing, mounting interest from institutional investors including Wall Street giants and major payments companies, who bring their capital, expertise and reputational influence to the market.

“Third, is the rising number of crypto advocates and mega influencers like Elon Musk, Jack Dorsey and Cathie Wood who have a clear message: crypto is the inevitable future of money.”

Fourth, the technicals back the prediction. Looking at Bitcoin halving events, over time we’ve seen that values rise substantially in the year after a halving. After the 2012 and 2016 Bitcoin halvings, prices increased by 55 times and 15 times respectively.

“And fifth, cryptocurrencies – Bitcoin in particular – have changed the way the world handles money, does business, makes transactions and manages assets. Investors appreciate the intrinsic value of digital, borderless, global currencies for trade and commerce purposes in increasingly digitalised economies in which businesses operate in more than one jurisdiction.”

He goes on to say: “This will only increase as mass global adoption increases. Only last month El Salvador became the first country in the world to adopt Bitcoin as legal tender, and I’m certain many others will follow suit.”

Mr Green concludes: “Today is a major milestone.  It underscores crypto´s mainstream appeal and galvanises its place in the global financial system.”

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Cryptocurrency

3 Largest Cryptocurrencies Account for Almost 70% of All Crypto Market’s Value

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The cryptocurrency sector has in the recent past witnessed a surge in the number of new coins joining the market amid rising value. However, despite hundreds of different coins existing, only a few established digital currencies are dominating the market.

According to data compiled by Finbold, the top three largest cryptocurrencies (just 0.02% of all 12,917 coins) by market capitalization account for 68.73% of the total cryptocurrency market of $2.53 trillion as of October 20, 2021.

Bitcoin has the largest share at 47.6%  or $1.2 trillion, followed by Ethereum at 17.93% or $454.76 billion. Binance Coin (BNB) takes the third spot at 3.2%.

Cardano (ADA) and Tether (USDT) round out the top five cryptocurrencies with a market share of 2.76% and 2.72%, respectively.

Crypto market heading in the right direction 

The domination by the three cryptocurrencies highlights the recent rise of the market that has witnessed an increase in both retail and institutional investors. The market has also recorded an introduction of new investment products: According to the research report:

“To summarize, many trade experts believe that the cryptocurrency market is now trending in a positive direction. The introduction of spot ETFs in line with suitable regulatory frameworks may aid the industry in gaining considerable momentum in the future.”

As the maiden cryptocurrency, Bitcoin holds the top spot in the market cap, with the assets receiving approvals from different players. The asset’s rise has led to proponents considering it as a hedge against inflation.

In the future, the asset is likely to expand its dominance in the market, especially with the emergence of new related investment products like the Bitcoin ETF.

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Bitcoin

Bitcoin Price Just 1% Off All-time High: Will this Trigger a Sell-off?

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Long-term Bitcoin holders will begin to realise some profits amid near all-time price highs, but we expect values to continue to rise due to more active market participants, predicts the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The prediction from Nigel Green, chief executive and founder of deVere Group, comes as the world’s dominant cryptocurrency was less than 1% off its all-time high of $64,888.

The price highs come as the ProShares Bitcoin Strategy ETF – the first of its kind – launched on the New York Stock Exchange on Tuesday at the opening bell.

Mr Green says: “The Bitcoin price has gained around 35% since mid-September as interest around the first SEC-approved Bitcoin ETF has grown.

“It’s been seen as a major test to see if mainstream investors are ready to include cryptocurrencies in their portfolios alongside other assets such as stocks and bonds – and it appears, judging by the reaction, that they are.”

He continues: “This will continue to drive not only Bitcoin but the wider digital assets sector, therby encouraging more ETFs, amongst other crypto vehicles, to be brought to market.

“This will inevitably bring in a growing number and broader range of active market participants, including those using pension funds, and retirement and brokerage accounts.

“The growing interest in and demand for crypto will help maintain the upward trajectory of Bitcoin and other digital currencies in the near term.”

In September, he forecast that the Bitcoin price would be back to its previous highs by the end of this year. This is already now almost proven to be an accurate prediction but, he says, the momentum will drive them further still.

Yet despite the growing number of active market participants which, as Nigel Green says, “as history teaches us, have matched with increasing interest in the digital asset in early stages of bull markets,” some long-term Bitcoin holders might “begin to realise profits.”

He notes: “Long-term holders typically buy in a bear market and sell in a bull run.  They are spurred into realising some profits when the price is close to or breaks the previous all-time high.

“As such, we can expect to see some long-term holders now cashing in some Bitcoin with a view to accumulating more later.”

However, the deVere CEO concludes that any long-term holders’ selling is “likely to be balanced by growing activity by new investors” and that therefore “the price momentum should be sustained.”

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