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Financials Fight Back (Crypto Is After Their Lunch)

By Mati GreenspanMarket OverviewSep 13, 2017 05:06AM ET
www.investing.com/analysis/financials-fight-back-crypto-is-after-their-lunch--200212977
Financials Fight Back (Crypto Is After Their Lunch)
By Mati Greenspan   |  Sep 13, 2017 05:06AM ET
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Hooray! The world has a new iPhone. Or at least it will in November. Just like all previous models, Apple (NASDAQ:AAPL) claims that this is the most technologically advanced smartphone that they've ever created. Well, that makes sense. Who would spend time and money putting out something that is less technologically advanced?

One way that this phone will be more impressive than their previous models is the price. At $999 per unit (£999 in the UK), this will be the most expensive iPhone ever.

Call me a chump but I'll probably still be buying one along with a few shares in the world's most expensive and most impressive tech company.

Today's Highlights

  • Financials Lead Gains
  • Jamie Attacks Bitcoin
  • Cryptos Recoil

Please note: All data, figures & graphs are valid as of September 13th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Stocks in the United States pushed higher yesterday led proudly by the financial sector. Financial stocks across the globe have gained close to 2% in the last 24 hours.

Global Market Intrady Return By GICS Sector
Global Market Intrady Return By GICS Sector

The reason for the move is somewhat unclear. Damage from Hurricanes Harvey and Irma are sure to cost the insurance companies big bucks and according to Jamie Dimon, the CEO of JP Morgan, revenues from trading across the banking sector are expected to drop sharply.

Though Jamie didn't directly blame Bitcoin for the drop in revenues he did have some harsh words about the world's favorite cryptocurrency as part of the same speech. He called it a fraud and said that it's only useful for drug dealers, murderers, or citizens of Venezuela and North Korea.

This attack on Bitcoin from Dimon is somewhat strange given the level that JP Morgan has embraced and invested in blockchain technology. Not only are they heavily involved in the Hyperledger project, they have also started to develop their own Ethereum like blockchain called Quorum.

He later clarified the statements and you can watch it in this interview with CNBC.

It's almost as if Dimon was intentionally trying to jawbone the digital currency. He waited for the right time to attack and gave it all he got. Nevermind that some of the things he said don't even make sense, in the follow up statement he even went so far as to throw his own daughter under the bus.

His comments stung the crypto community and prices immediately began to fall. Bitcoin itself bore the brunt of the attack falling close to $200 within the first hour after the statement and eventually crossing below $4000 a coin for the first time since August 22nd.

BTC Chart
BTC Chart

The effect wasn't limited to Bitcoin though. The entire crypto market lost approximately $10 Billion in value before a recovery this morning.

Total Market Capitalization
Total Market Capitalization

The crypto market is particularly fragile at the moment as we await further clarification from the People's Bank of China and whether they are about to slam the ban hammer down on cryptocurrency exchanges.

In the meantime, long term traders in eToro have not given up their positions and continue to hodl, while the big money is still waiting on the side looking for a bit of a better entry point.

Still, no matter how many crypto critics there are out there, not very many are willing to sell short. As Dimon says, the price could reach $100,000 per coin even though it's not backed by any government.

Let's have an awesome day!

@MatiGreenspan

eToro, Senior Market Analyst

Disclosure: This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. All trading carries risk. Only risk capital you're prepared to lose.

Financials Fight Back (Crypto Is After Their Lunch)
 
Financials Fight Back (Crypto Is After Their Lunch)

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John Vaughan
John Vaughan Sep 13, 2017 9:41AM GMT
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I dont think anyone in the crypto game really cares what the head of the JP morgan thinks about bitcoin, especially since its gone up 1000% since the first time he laid into it. More of a concern to traders is the PRC drama, and the fact one of the chinese exchanges stopped operating last night.
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Alecco Trula
Alecco Trula Sep 13, 2017 3:04PM GMT
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Agree with JV. The PRC decision might weigh heavy on the cryptocurrency markets. However, it's not the end of the world for the virtual currency as the very basic concept of the cryptocurrency is to work around governments and regulators.
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