What is happening right now? Price movements explained.

[Magnr]

Equities markets around the world are falling. A single drop from a single market is usually not enough for a well diversified investor to panic, large > 1% drops from all major markets are. China was the first market to drop yesterday with a 7% decline triggering an automated circuit breaker designed to kerb panic and short sellers - this control measure usually serves to cool off markets and prevent rapid market collapses.

The Americans when they woke up and saw the activity in China and proceeded to sell un-necessary holdings, the Dow jones Industrial Average, S&P 500 and Nasdaq Composite all closed between 1-1.5% lower (these are baskets of stock prices from leading companies used to gauge the performance of different sectors of the US economy). Oil prices dropping also marked a slow down in energy consumption which fed bearish news.

Meanwhile as the Brits woke up, they saw global markets falling and knew that their own portfolios would lose value due to their exposure to the other two major markets, as well as Oil prices dropping rapidly. The FTSE 100 (this tracks the price of the top 100 companies on the London Stock Exchange) opens the day almost 2% lower.

Bitcoin is increasingly being seen as a 'safe haven' asset class. Just like gold, when markets tumble, savvy traders will look to reduce their exposure in the equities market and increase their exposure in safe assets.

Gold is up - via Nasdaq

https://i.imgur.com/bWq7GUH.png
Bitcoin is up and currently touching $450.

The one benefit to Bitcoin as a globally traded currency is that it is easily bought and sold when compared to equities across the world. Did we also mention its utilitarian value?

Today's analysis bought to you by Magnr. A bitcoin savings, trading and investment platform.

Drop a comment down below if you want us to produce more posts about global economics. Currency markets may be a good one for us to cover.

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[LVBTC]

I have the majority of my investment portfolio in bitcoin but have also diversified into some physical gold holdings. The two investments are very different. You mention bitcoin is being seen as gold and this is only partially true. The gold price is determined on the COMEX (commodity market) which is controlled by the banks and fed. It is in their best interest to make gold seem like an unworthy investment and "gold bugs" are convinced that they are manipulating it. Gold is seen by many as a hedge against crashing markets, such as happening in China, but it really isn't unless you're in China itself and trying to just retain consistent value. It can only act as-if in a free market if the Fed, major banks, and/or a complete meltdown happens. It is a good place the store wealth, but you're at the mercy of the people you're trying to protect yourself from until they bust. Gold also has a history of being confiscated by the US Treasury, so that's another threat.

I personally like bitcoin right now as my primary investment choice because, although there is manipulation, it is the most transparent store of wealth and market that I can think of. I wouldn't touch the stock market with a giant stick right now. Holding gold will only show true gains if the COMEX has a major issue that realizes the true value of actual gold in vaults and gold in the world. With bitcoin, all of this is transparent. We know exactly how many there are, how much is being mined, and we basically know the transaction volumes of it. It's as close to a free market as anything else in this current economic crisis beginning to unfold. Bitcoins biggest downsides (to me) are misinformation, lack of general and mainstream education, potential scalability issues remaining unsolved, and political issues. These pretty much don't effect my decision because although the market is small, the price is low enough to be a major player in 2016 for the individual investor still on a percentage basis.

I see gold as a solid place to hold wealth, not an investment, and bitcoin as a good storage of wealth as well (with unique problems) but with explosive potential upside.

[FLoving]

there are strong problem with china industries + oil price default....
I think this year could be a gold year for btc users

[Magnr]

I personally like bitcoin right now as my primary investment choice because, although there is manipulation, it is the most transparent store of wealth and market that I can think of.

...

I see gold as a solid place to hold wealth, not an investment, and bitcoin as a good storage of wealth as well (with unique problems) but with explosive potential upside.

This is why we are bullish on Bitcoin, the smart money... the clever investors know that the potential upside is WELL worth a small allocation in their portfolios because of diversification.

See this paper explaining that the Beta correlation between Bitcoin's price and other asset types is simply nonexistent. IE. it is a new and unique asset class that does not follow correlations against other market instruments.

http://www.scribd.com/doc/294784691/Estimating-the-Beta-of-Bitcoin

[lyth0s]

Good post and I agree with you. Daily updates on your view of world economics and their relation to bitcoin would be greatly appreciated. I will be watching this thread.

[oblomov]

Thank you for the post- I hope that you will continue to post similar observations.  I am a FX trader and would like to see more posts on BTC interrelations with other currencies at this forum.

I agree that BTC increasingly is viewed as a safe haven.  In my view, it's the new CHF, and investors are using BTC for similar reasons as they used CHF in the 1970s.

Gold and BTC responded strongly to the news that the PBOC drew down its FX reserves to prop up equity markets and push down the Yuan.

BTC may be preferred to gold among some of the Chinese investor class since it transcends borders, and thus avoids capital controls.

[bitlancr]

This is a nice explanation for the people who don't understand what moves the bitcoin market. Thank you for your clear post. I hope to see more of you.

[FLoving]

no other analysis?
for example why price trends down? and why for example there is some "quickly" movement short (selling btc for fiat?) 

[Lutzow]

What'll be the explanation at the moment. Price seems to be on a roller coaster ride. People are confused whether they should buy or wait further. I guess I'll just wait for it to dip some more

[pissedoff]

What'll be the explanation at the moment. Price seems to be on a roller coaster ride. People are confused whether they should buy or wait further. I guess I'll just wait for it to dip some more

I would say its a good time to buy more bitcoins. The price might dip further but it might also start rising again.

[Boelens]

What'll be the explanation at the moment. Price seems to be on a roller coaster ride. People are confused whether they should buy or wait further. I guess I'll just wait for it to dip some more

I don't think it's going to be stable at a price for a while after the whole Cryptsy thing and the Mike Hearn thing. You can could set a buy order at 380, I highly doubt it'll go below that and it will go back to 400 most likely.

[ayesha201009]

What'll be the explanation at the moment. Price seems to be on a roller coaster ride. People are confused whether they should buy or wait further. I guess I'll just wait for it to dip some more

I would say its a good time to buy more bitcoins. The price might dip further but it might also start rising again.

I don't understand your optimistic view, because in a short time frame today price go down by 1% and don't gain again value....

[BruceLee007]

Equities markets around the world are falling. A single drop from a single market is usually not enough for a well diversified investor to panic, large > 1% drops from all major markets are. China was the first market to drop yesterday with a 7% decline triggering an automated circuit breaker designed to kerb panic and short sellers - this control measure usually serves to cool off markets and prevent rapid market collapses.

The Americans when they woke up and saw the activity in China and proceeded to sell un-necessary holdings, the Dow jones Industrial Average, S&P 500 and Nasdaq Composite all closed between 1-1.5% lower (these are baskets of stock prices from leading companies used to gauge the performance of different sectors of the US economy). Oil prices dropping also marked a slow down in energy consumption which fed bearish news.

Meanwhile as the Brits woke up, they saw global markets falling and knew that their own portfolios would lose value due to their exposure to the other two major markets, as well as Oil prices dropping rapidly. The FTSE 100 (this tracks the price of the top 100 companies on the London Stock Exchange) opens the day almost 2% lower.

Bitcoin is increasingly being seen as a 'safe haven' asset class. Just like gold, when markets tumble, savvy traders will look to reduce their exposure in the equities market and increase their exposure in safe assets.

Gold is up - via Nasdaq


Bitcoin is up and currently touching $450.

The one benefit to Bitcoin as a globally traded currency is that it is easily bought and sold when compared to equities across the world. Did we also mention its utilitarian value?

Today's analysis bought to you by Magnr. A bitcoin savings, trading and investment platform.

Drop a comment down below if you want us to produce more posts about global economics. Currency markets may be a good one for us to cover.

I think that now price fell down by 10$ just because of pump and dump as usuall, but that's not a horrible thing because price will rise now because everyone buys bitcoins for future so price will rise

[Oriannaa]

So basically in a few sentences, it goes like this: normal traditional markets on a trending meltdown, so people look at bitcoin to move money.

Or try to recover some of it by investing in bitcoin.. due to people thinking its like gold.