Is The Bitcoin Crash Over?

The cryptocurrency Bitcoin hit its most recent all-time high just over a year ago, on November 10th, 2021, at $69,000 per coin. More recently, Bitcoin was trading in the $16,000 range, that's more than a 76% decline.

Long-term Bitcoin bulls will be quick to point out that since its inception, Bitcoin has experienced other declines that fall within the same percentage drops. However, knowing that type of move has happened in the past, and the cryptocurrency rallied back probably doesn't help those who bought Bitcoin up at the highs feel much better about their investment.

But what about if you have been sitting on the sideline, waiting for the right time to buy Bitcoin? Is today a good time to buy the cryptocurrency?

For all the bulls out there, I already know I have been wrong about Bitcoin in the past, and I am wrong again this time. But hear me out before you write me off. I believe there are a few reasons why we have not seen the bottom of the current Bitcoin crash.

First and foremost, we are heading straight toward a recession. You may not want to believe it or face reality. Still, it is coming.

Just last week, Federal Reserve Chairman Jerome Powell told investors that the likelihood of a soft landing was rapidly diminishing. Inflation is still high, and Fed Members have made it clear that bringing down inflation is the most important problem to tackle now. And despite interest rates at levels we have not seen in a decade, the Fed believes we will still need more increases in the coming months.

The coming recession is important for Bitcoin's price because up until this point, Bitcoin has not proven to be a "safe haven" asset.

Furthermore, even gold, an investment that most investors would consider pumping money into during uncertain economic times, has not been rallying during this market downturn.

Many investors point to the fact that the dollar has strengthened as one reason why gold and cryptocurrencies are down. A strong dollar could be due to Treasury bonds paying higher and higher yields. The world considers the US Treasury Bond as the baseline for a zero-risk investment. And with T-Bond yields going higher in 2022, investors worldwide have been flocking to both the dollar and T-Bills. Continue reading "Is The Bitcoin Crash Over?"

After Respite Stocks Back To Weekly Losses

A week after breaking long weekly losing streaks, the stock market is back to its losing ways, with the DOW falling 348.58 points, or -1.05%, to 32,899.70. The S&P 500 slipped by -1.63% to 4,108.54, and the NASDAQ fell -2.47% to end the week at 12,012.73.

On a weekly level, the DOW lost -0.94; the S&P fell -1.20%, and the NASDAQ wrapped up the weekly losses with a loss of -0.98%.

But why the losses? Continue reading "After Respite Stocks Back To Weekly Losses"

Inflation: Is The Glass Half Empty Or Half Full?

The inflation rate rose 0.2% in April; is the glass half empty or half full?

Today the BEA (Bureau of Economic Analysis) released the PCE (personal consumption expenditures) for April 2022. This report is the preferred inflation gauge used by the Federal Reserve as a key component to shape their forward guidance of monetary policy. Continue reading "Inflation: Is The Glass Half Empty Or Half Full?"

Stocks Rise On Slowing Inflation Report

The Fed's preferred inflation gauge's core personal consumption expenditures price index rose 4.9% from a year ago in April, in line with estimates and a deceleration from March when the inflation gauge stood at 5.2%. While still elevated, the report indicates that price pressures could be easing a bit, as reported by the Commerce Department reported Friday.

However, the report/number excludes volatile food and energy prices that have significantly contributed to inflation running around a 40-year peak. If you include food and energy, headline PCE increased 6.3% in April from a year ago. That also was a deceleration from the 6.6% pace in the previous month. However, the monthly change showed a more marked pullback, increasing just 0.2% compared with the 0.9% surge in March. Continue reading "Stocks Rise On Slowing Inflation Report"

What All The Recession Talk Really Means

If you’ve been following along here over the past year, I won’t have to remind you that I have no problem telling it just like it is. And that includes the good news, and the bad news, about Bitcoin (BTC), cryptocurrencies in general, stocks, and the economy. You name it, and I try to be upfront and transparent.

In fact, in last week’s post, I gave you the grisly details behind the sell-off in just about every asset class. I showed you how much every major stock index was down for the year in gory detail. I then showed you how Bitcoin was a member of that dubious club.

I also got under the hood of what I consider to be the biggest factor right now, which is hammering stocks and Bitcoin: Inflation.

The fact is inflation is at nosebleed levels, and it’s got just about everyone in a tizzy. And with good reason: Inflation eats away at incomes and makes products and services super-expensive. And since inflation now stands at multiple decade highs, you ignore it only at your own peril.

But as bad as inflation is, I have to remind you that down deep, what really makes investors nervous is not inflation itself but the tool of choice that gets used to fight it: Higher interest rates. Continue reading "What All The Recession Talk Really Means"