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Market Round Up: Who are the Bitconites 👽 – Jap Bonds befriend Typhoon Jebi 💨

by | 6 Sep, 2018

 

1. Who are the Bitconites?

Bitcoin’s journey continues south of the $7,000 borderline as Goldman Sachs withdraws plans to set up a cryptocurrency trading desk, driven by on-going regulatory uncertainties. While this reenforces uncertainties about the future legitimacy, or institutional, acceptance of cryptos, it gives us an opportunity to explore its investor acolytes.

According to sociologist Dave Elder-Vass, there are five types of crypto investors. First, there’s the ‘Idealist’. These cryptographers are the earliest adopters who were looking for an alternative to physical cash that was untraceable and independent of middle-men. These are the followers of Satoshi Nakamato’s Bitcoin blockchain solution.

Next comes the ‘Libertarians’. These are the highly influential advocates of the absence of a central authority, such as a central bank or government, that debases currencies by issuing more and more of it (quantitative easing).

The third and biggest group is the ‘Savvy Young’. These have been driven by the ‘Californian ideology’ – an arrogant belief that technology and entrepreneurs alone can transform, or disrupt, the world.

The crypto ‘Investors’ behave like true speculators, this group has been attracted by the enormous volatilities to be found in cryptocurrency prices and are simply interested in buying and selling at the right time, rather than any long term vested interest or purpose in the currency.

And finally, there is the ‘Portfolio Balancer’. These are the sophisticated, sensible investors who buy cryptos as a hedge against wider risks in the markets. The argument goes that while other assets follow a similar peaks and throughs pattern, cryptos nearly always follow an opposite pattern. So it could be seen as a way of insuring an investment portfolio against stock market falls. Worth diversifying?

Related: The EU signals it may be ready to compromise with US over tariff dispute

2. Japanese bonds befriend Typhoon Jebi

Japan begun to count the cost of Typhoon Jebi following the devastation caused on Tuesday. Clean-up operations are well under, although there is still a lot of work to do and the Osaka Prefecture has requested financial assistance from central government to assist with clean-up operations and the rebuilding of infrastructure. It has also led to investors driving back to the safety of government bonds.

Japanese government bonds (JGBs) this morning appear to have recovered with the effects of the Typhoon on the economy and indications of dissent in the Bank of Japan (BoJ) having an effect on lowering yields marginally. Equally, equity markets have been selling off recently, and as they come under pressure, there is likely to be a natural return to fixed income as investors try to position themselves for a softer growth prospect in the economy.

Related: Market Round Up: Baidu’s Made in China, Brexit in the City, Factory orders give a pep

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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