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Four reasons why the bitcoin went crasy (2)

2. The process of producing bitcoins is delayed

The way of producing the bitcoins is based on sophisticated technological processes and calculations. Their production is decentralized and the speed of the "blocks" process is slowing down, at least compared to what was necessary a few years ago.

3. The potential for the emergence of an ETF fund

After the US regulator, in the face of the SEC, dismissed the plans of the Wincliffe twins to submit a bitcoin based index, in March, the cost of the bitcoin dropped after its strong growth earlier. At the end of March, however, the two brothers filed an appeal against the decision that a higher instance would soon pronounce.

4. Increasing market uncertainty

The factor that always influences positively on the cost of the bitcoin is market uncertainty. The digital currency is seen by many investors as a "rescue island" in a situation of uncertainty. Investors looked at the bitcoin during the Greek crisis, for example.

Four reasons why the bitcoin went crasy (1)

The bitcoin continues with its record highs, pointing to the $2,000 psychological limit. For the past month, the virtual currency has risen by 60% and last year's appreciation is 320%. Since the beginning of the year, the growth of the currency has reached 80%.
The bitcoin, registers a new record every few days. For investors who are not particularly familiar with the currency, perhaps the logical question arises - what is the basis of this appreciation?

Here are four reasons for the dizzying increase in encrypted currency.

1. Japan and Russia

On April 1, Japan officially recognized the bitcoin as a legal form of payment. Only a month later, the bitcoin still felt the positive effects of it. Japan's decision means that the country's bitcoin market will be regulated under the AML and KYC policies.
According to CryptoCompare's graphs, about 46% of the bitcoin trade is currently in Japanese yen. This is the biggest activity. Traditionally, the US dollar or the Chinese yuan have been the leaders.
In addition, according to a Bloomberg publication on 10 April, Russia is expected to take such action next year. The central bank of the country works with the government to legalize the currency.

The mysterious trader "50 cent" made $27 million profit for a day from VIX (2)

The broad S&P 500, on Wednesday, noted its biggest daily decline since September 9, largely due to political uncertainty.
Despite the big profit on Wednesday, "50 cent" is still far from profits, overall, given the fact that his bets on increasing volatility in recent months have not been justified and have brought him substantial losses.
Experts estimate, after the profit of 27 million dollars on Wednesday, the trader still has about 90 million loss.
Recently, The Financial Times identified the trader as the London-based investment manager Ruffer LLP, referring to unnamed bankers.

The mysterious trader "50 cent" made $27 million profit for a day from VIX (1)

The mysterious US trader with options - nicknamed "50 cent" - has earned strong earnings after the sharp rise in volatility on Wednesday, according to the financial institution Macro Risk Advisors.
The trader, at least on paper, has earned $27 million, according to Pravit Chintawangvich, head of the option trading unit at the institution.
The VIX Index is one of the most widely watched indicators and a barometer of expected market volatility in the short term. On Wednesday, the index ended with an increase of 4.94 points, or its biggest daily increase since September.
The strong rise in the indicator has gravely favored the mysterious "50 cent" trader, who has periodically bought call-based options worth about 50 cents.
Index-based call options are pledged to raise the asset that is tied to a market sale.

Fed on its way to $2 trillion mistake? (2)

Some experts say that this way of thinking is not particularly good overall. Because the Fed's balance sheet consists largely of mortgage bonds expiring in terms of whether people will choose to pay their debts. As a result, the Fed may lose control of an important tool in its policy if a large percentage of Americans decide, surprisingly, to close their mortgage loans.
The question arises as to why the Fed will try to reduce its balance?
The very act, threatening future economic development and by itself, can have a destructive impact on the economy, which eventually leads to new stimulus measures, recession and a new balance.
Some experts argue that with its current record balance, the Fed will have difficulty reacting to future shrinking of the economy in the direction of its monetary policy. Changing the latter policy itself may, however, jeopardize the stability of the economy.
Overall, it can be said that the option of maintaining a neutral balance-sheet policy may be the better option for the Fed. What will happen, however, is yet to be seen.

Fed on its way to $2 trillion mistake? (1)

Later this, or early next year, the Fed is expected to resort to a strange maneuver - a reduction in the balance of holdings of US bonds.
The securities were bought over the last decade to "pump the liquid" into the market, stimulating the economy, lending and low interest rates.
What, however, will mean a reduction in the Fed's balance sheet?
In general terms, the reverse of the process of buying of government bonds during the crisis or liquidity out of the market. In itself, the action will lead to an increase in interest rates.
The decrease is expected to be high. The Fed's current asset balance is at more than $4 trillion, and according to some experts it is appropriate to cut it by half, or about $2 trillion, over the next few years.
The Fed's plans are to gradually reduce the balance by simply not renewing current bonds at their expiration.

What to buy when S&P 500 is correcting? (2)

Let me give an example with such a company. It's Michael Kors. The manufacturer of luxury goods has been experiencing serious difficulties lately, because of the challenges in the sector and its ongoing restructuring. The company has a negative beta of 0.45.
It can not be ignored that the close levels at which the company shares are traded to their lowest values ​​for the past one year. At levels of nearly $36, the company's shares are only about 3% of its annual bottom. Or, there is a very good level to place a close stop.
At the same time, slightly less bad quarterly results than expectations, which are, by the way, extremely negative, could trigger a serious increase in the shares of the luxury goods maker.
Still, we should not outwit the good growth of the Asian economies that the expansion of the company is focusing on. As a bonus, the company's price/earnings ratio is only 8.2 or nearly half that of the companies in the sector.

What to buy when S&P 500 is correcting? (1)

Did the US indexes started correcting? This is the issue that tortures all investors, after a long-awaited decline in the US market on Wednesday. What is certain is that times of record low volatility may have ended.
The VIX, or the volatility index, is the first suspect to get into the eyes of any investor who wants to insure themselves from a further fall in the indices.
The fear index reached a 23-year minimum in the past week and yesterday saw a significant depreciation of its lowest values. However, as history shows, this may only be the beginning of the indicator's appreciation. It is quite possible to witness a test at the highest levels of the indicator of more than 16 points.
What else can be traded by investors fearing a further fall in the indices. A completely logical answer is - companies with a negative relationship with the market, or with a negative beta.

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Volatility - the best choice in an environment of rising interest rates? (3)

In fact, there is one asset that can top the list for the best choice among investors. And this, perhaps, contrary to all expectations - volatility.
Why contrary to all expectations? Because at the moment the volatility is traded at its lowest levels since 2007, or since the financial crisis. In other words, investors expect the status quo to be maintained.
This is a very good starting point for purchases, given the strong decline in volatility and the not very large potential for further decline. In addition, we can not turn to the old rule "sell in May and relax", and to the fact that in recent years August is one of the most volatile months of the year.
More patient investors can wait for the first signs of volatility before investing in it...

Volatility - the best choice in an environment of rising interest rates? (2)

On the other hand, we have to mention the difference in interest rates now and the first such actions last year. This year, the sharpest rise in interest rates over the past ten years is expected, which may have a negative impact on the indices, against the backdrop of a positive reaction, since their first increase in December 2015.
So, what can investors do? In addition to usual suspects - shortening US indexes, gold purchases, they can look even bolder on long-term US government bonds.
And interest rates, especially if their faster growth is expected, are the biggest enemy of government bonds. Or they can continue and even deepen their decline this year.

Volatility - the best choice in an environment of rising interest rates? (1)

The Fed raised the interest rate in March for the third time since the financial crisis. After better-than-expected data on employment and unemployment in the US last week, expectations for at least two more interest rates in the world's largest economy have grown.
Is the question of what to invest in high interest rates?
Experts recall that the initial reaction of investors is up, with increased interest rates, in the year after their first increase. This has already been observed. Subsequently, however, and at higher interest rates, markets are declining in response to the normalization of interest rates.

Bulgaria In Eurovision

We, Bulgarians, have the habit to wake too late.
But when we do it, we do it with a spark.
We have the ability to attract, with our temper,
To make everyone impressed by our history,
To make everyone shake on our tunes,
To make everyone shocked by our tastes.
To be out-of-age, along with walking with the latest flash news.
So, there is our Europe representation, please, vote for us!

Vote for Christian, from Bulgaria

Europe's still heavy breathing after France

The upward momentum of the middle of the week proved to be insufficient to move the markets a bit higher and the main European exchanges ended the trade in red on Thursday:
The European Stoxx Europe 600 closed with a loss of 0.52% to 394.39 or a decline of 2.06 points.
The German DAX30 recorded the most swan-diving decline in the main European indices - -0.36%, closing at 12711.06. With the largest decline in stock prices, were the companies Prosiebensat 1 Media AG (-5.95%), Deutsche Post AG (-3.40%) and Heidelbergcement AG (-2.73%).
The French CAC40 halted its growth and declined by 0.32%, closing at 5383.42.

The British Central Bank kept its key interest rate

The Bank of England did not change its monetary policy and left its key interest rate unchanged at a record low of 0.25%, which was expected given that Prime Minister Teresa May has scheduled a surprising parliamentary election on June 8, and a change in monetary policy would be very unexpected. This would negatively affect the markets.

Meanwhile, at a press conference, Mike Carney said that British households should expect a tough year.

For the 2017 and 2019 the Central Bank raised its forecasts.

ECB - Eurozone unemployment is higher than official data shows

In its report, the bank explains the discrepancy between the sharp drop in unemployment and the weak rise in wages, with the unemployment figure excluding some people who do not meet the strict statistical criteria. After adjustments, unemployment in the euro area is 15%, which is well above official figures at 9.5%.
Well, Hello!
Maybe the statistic should change their measuring criteria, 'cause official figures don't match for long time with the reality, which makes them, at least, useless?

The prospects for the dollar till the end of the year (2)

In addition, it should be noted that tensions between the US and China may begin to increase, not only in connection with potential military conflicts (given the fact that North Korea is entering China's sphere of influence), but also as a consequence of purely economic wars that can be developed, following Trump's policy.
Traditionally, the dollar shows signs of strength when geopolitical tensions grow. The main reserve currency is preferred by the investors as a shelter. Still, if other currencies, such as the Swiss franc and the yen, are not more preferred than the dollar, we still have to see...

The prospects for the dollar till the end of the year (1)

Fed has raised interest rates for the third time since the financial crisis in March, and it is very likely that we will see two new increases in interest rates by the end of the year. If, of course, the US economy, the labor market and inflation are presented as expected. And this will most likely continue to be so...
What, however, has to excite investors in dollars, is if these expectations are set in the price of US dollar relative to other major currencies.
In addition, the Fed has already announced its plans to reduce its record balance, which will be another factor supporting the US currency.
The key to investors will be the evolution of geopolitical events. Deepening tensions between the United States and Russia in connection with the situation in Syria, as well as between the United States and North Korea, and the United States and China, will be other important topics for "green money".

The prospects for the yen till the end of the year

The environment can be defined as ideal for the Japanese yen. On the one hand, geopolitical uncertainty and the potential growing demand for yen are as a result of it and, on the other hand is the Japanese Central Bank's "tied hands", in background of Trump's efforts to devalue the dollar.
It has been rare in history that the US president has openly spoke that his country's currency is expensive, as we have already seen from Donald Trump. In this aspect, Trump would not hesitate to condemn the intervention of the Japanese bank and this is probably a well-known fact for everyone.
We can not ignore the forecasts of the former Japanese finance minister, in the face of Eisuke Sakakibara, also known as Mr. Yen, who has been warning since mid-last year that the dollar is heading for 100 yen. Sakakibara confirmed his position again this year.

The prospects for the pound till the end of the year

The pound will most likely be the most volatile currency among the major ones. We have seen how the situation for the British currency can be radically different with every day and every statement of a major state functionary.
Uncertainty over the British currency is serious, and it will most likely continue to be preferred by hyper-speculators, as well as being avoided by investors who want more clarity about the direction of movement.
There are early elections in the country, which, however, are perceived as positive by market participants. We have already seen how one of the most bearish currency analysts, in the face of Deutsche Bank, has changed its expectations for the pound.

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