The markets were hoping to see a swift resolution of trade talks between the United States and China. The US president, Donald Trump made people become less hopeful after he made an announcement that the unusual economic data enjoyed of late by the US is as a result of the current tariffs; he also added that he will be raising tariffs even further this Friday.
With Japan and UK having national bank holidays, the markets were meant to be quiet for the day. Since the beginning of May, stocks have been at their lowest value, but volatility remained as high as it was at the start of the year 2019.
As seen by the superb jobs data released last Friday as well as the corporate earnings, the US economy has remained very strong. So, it will be great to see what direction this goes.
As mentioned earlier, today, the market is now on a high alert after Trump raised tariffs on China once again. Talking about geopolitics, the markets have become self-approving with all the supportive central banks and positive earnings.
It is also a good time to remember that there are other risks present that do not have much to do with the economy, just like the one in the UK that the markets seem to have ignored.
The Bitfinex Debacle Continues
The Bitfinex premium has persevered through the weekend and is currently holding firm at around $350. How this premium has managed to maintain itself at a steady level is really surprising.
We can only believe that the premium doesn’t become too big because traders will end up arguing it out. However, here’s the question: Why the approximate figure of $330 to $370?
The premium reminds us of what happened at Mt. Gox before it collapsed, where bitcoin traded at a higher rate on the exchange for a while before going down. The difference here is that Mt. Gox made up about 60% to 80% of all bitcoin transactions back then.
Today, the market is more decentralized, so no matter what Tether experiences, Bitcoin will do well, and probably do better when this is over.
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