- Trading Plunges at China’s Bitcoin Exchanges After Fees Levied
High-speed traders are pulling out of China’s bitcoin market after the three biggest venues started charging transaction fees on Tuesday.
One-hour volume at OkCoin fell 89 percent to 1,026 bitcoins at 1 p.m. local time, from 10,062 during the same period on Monday, according to the venue’s website. Huobi and BTC China saw declines of 92 percent and 82 percent respectively. Prices were little changed, at around 6,350 yuan per bitcoin.
The lack of fees was seen as the main reason why as much as 80 percent of bitcoin trading in China was automated, with professionals using strategies such as cross-exchange arbitrage. The platforms made money by charging clients to withdraw bitcoin, but Tuesday’s changes may have ended that system for good. The moves came after the Chinese central bank made on-site inspections of the exchanges and reportedly found a number of violations.
“The exchanges are cutting their arms off to stay alive,” said Zhou Shuoji, whose Fintech Blockchain Group runs a bitcoin hedge fund and venture capital fund.
The venues are proactively weeding out speculative trading to appease regulators, said Zhou. The fees, introduced by all three venues at midday on Tuesday, made market-making unprofitable, he said.
The big three bitcoin exchanges, which handle most of the world’s volume, announced plans to introduce the trading fees on Sunday. They each said the purpose was to suppress speculation and prevent big swings in price. China is home to about 10 significant bitcoin venues, with a majority of trades executed on the top three.
Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies
Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies
Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.
According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.
The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.
It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.
“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”
Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.
Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension
Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension
Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.
OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.
In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.
Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.
Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.
“While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.
“The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.”
Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.
Gold Dips by 2 Percent on Better Than Expected Job Report
- Gold Dips by 2 Percent on Better Than Expected Job Report
Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.
The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.
The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.
“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.
Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.
Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.
The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.
Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.
Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.
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