Monday, March 5, 2018

Sector vs. Sector: Cryptocurrency markets outdoing equity markets as geo-political events and threats of a trade war engender stock selloffs

The threat of tariffs and trade wars appear to be having a resound effect on every market but one as President Trump begins his long-swaited battle to deal with the U.S.'s trade deficit.  And while stocks, bonds, the dollar, and even gold have experienced strong moves (mostly down) since last week, the one industry that has been largely unaffected is that of cryptocurrencies.

In a breakdown of price actions for both equities and cryptocurrencies since the President began his quest to even out decade's worth of unfair trade agreements, it is easy to tell who is already losing this battle, and who is sustaining themselves in part due to their decentralization.

Equity markets: Feb. 26 - March 2

Europe may be pointing the way. Last week we saw a continuation of the bear trends in both the U.K. FTSE 100 Index, with a drop of 174.50 or 2.41% to close at 7,069.90, and the German DAX Index, worst performer, which fell 570.10 or 4.57% to close at 11,913.70. The performance though is not what is most telling; rather it’s what is indicated by a review of the price charts.-  Coin Telegraph
Cryptocurrency markets: Feb. 26 - March 2

As first mentioned last week the major cryptocurrencies have been strengthening or consolidating over the past several weeks in a relatively correlated fashion. A decisive advance or decline for one or a few may point the way for the group, and therefore we will be watching closely for signs of relative strength and weakness. We can not only see relative strength in performance numbers but also within the evolution of the uptrend. Sometimes this can be a more reliable indicator for what might be coming next since a trend has a tendency to continue for some period of time and as it progresses there are multiple bullish signals that provide an opportunity to join in the advance. – Coin Telegraph
Inevitably, as market forces such as inflation, declining economic data, and the threat of trade wars start to ramp up, cash being accumulated from the selloff of equities will be looking for any haven that could potentially provide a yield.  And as the specter of recession looms over the markets for the first time in nearly a decade, investors have an additional alternative outside of bonds and precious metals, and ironically as well, they have over 1400 different cryptocurrencies to choose from.


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