Authorities from the new government of South Korea have announced yesterday that they are introducing a framework to regulate and legalize Bitcoin. South Korea has been one of the world's largest buyers of digital currencies so far this year and this news comes as an extremely pleasant and well-timed surprise for blockchain enthusiasts.
Today, the first 334 stores (of the 260k store deal) in Japan have started to accept the shiny digital asset.
The government of India is expected to announce their decision on digital currencies later this month and we hope for some more good news.
All these new users are currently threatening to put a strain on the Bitcoin blockchain as it was not built strong enough to facilitate this many transactions. However, the Bitcoin mining community has been working hard to reach a solution and just might be able to pull it off within the next 30 days.
Seemingly unrelated, Goldman Sachs has revised their forecast stating that we could see a huge drop before a major surge all the way up to $4,000 a coin by the end of the year.
Today's Highlights
Jinping, Trump, Un, Putin
Nasdaq Mess Up
RBA Bucking the Trend
Please note: All data, figures & graphs below are valid as of July 4th. All trading carries risk. Only risk capital you're prepared to lose.
Market Overview
"For every action, there is an equal and opposite reaction."-Sir Isaac Newton
With all the positive updates coming from the South, the situation in North Korea seems to be escalating to a not so positive place. This morning, Kim Jong Un conducted one of the most successful missile tests to date.
The rocket flew for more than 37 minutes before landing approximately 200 miles off the Japanese coast. Here's a map from CNN.
President Trump was quick to respond with two tweets calling for "a heavy move" from China to "end this nonsense once and for all." However, the response from China seemed a bit less urgent and they plan to continue with their strategy to talk Un down.
This is likely to be a very hot topic as leaders from around the world gather this Friday and over the weekend for the G-20 meetings in Hamburg. This convention is set to be the setting for the much awaited and (possibly) the first meeting between Donald Trump and Vladimir Putin.
President Xi Jinping will be meeting with Putin in Moscow today, presumably to align Chinese-Russian relations before the big event. As far as China is concerned relations between the two nations have never been better, while relations with the Trump administration are on an unsustainable path of escalation.
Nasdaq Oops
They're calling it a glitch.
Last night the Nasdaq accidentally sent out some very sour quotes by mistake.
Shares of Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), eBay, Zynga, and more were all showing at exactly $123.47. For some of these companies, the move represented more than 3000% gains, for others a major loss.
These stocks were already under pressure and while these type of mistakes can sometimes happen, it does not instill confidence in markets that many are already calling overvalued.
Just yesterday a legendary investor from Merryl Lynch put out a very bearish post, which was picked up by marketwatch.com with this chart as the centerpiece.
Bucking the Trend
One more giant move that is worth mentioning is the Australian Dollar, which went on a wild ride last night.
Nobody was really expecting the Reserve Bank of Australia to raise their interest rates at their meeting yesterday but they were expecting them to get onboard with the rest of the world's central banks.
Over the last few weeks, we've seen a huge push from the ECB, the BoE, Fed, and others to tighten the money and raise interest rates. It seems they've printed enough money since 2009 to last us a very long time. Now it's time to stop the printing and get back to normal economic policy.
The RBA seems to be having none of that though. While they did change their tone just a bit, they are still erring on the side of caution and would like to see a rise in wages before tightening the belt.
Here we can see the AUD/USD ramping up before the meeting and then selling off promptly after. For upside down currency traders and for carry-traders, this is quite a significant pullback for the high-yielding asset.
As always, please feel free to send me your questions, comments, and feedback. I'm always happy to hear it. :)
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.