Bitcoin soars $1,000 in week as Wall St. firms take notice

Ok it’s time to dig into the reason for bitcoin’s surging price moves. The digital currency is up just under $1,000 in the last week.

While it was easy to attribute the earlier rises to gamers and then nefarious dark web sites trading on drugs, weapons and sex, or Chinese investors looking to move money out of the country, these latest moves bringing the price to more than $2,750 have far more deep-pocketed investors.

And that’s who is coming into the market — investors — looking for these 5% up daily moves.

I took a look at 5 minutes of bitcoin trading around the globe on Thursday morning and more than 200 bitcoins were traded with the US taking down 150 of them. China in the middle of the night there bought 40.

That’s $55,830 in purchases of bitcoin in dollar terms in five minutes trading window at 7am EDT.

The most surprising country from this trading activity window was that of South Africa, which had such a big presence accounting for roughly 2.5% of the sales recorded over the time. Understanding that this is just a snap shot, it still backs up earlier observations at different times of the buyers distribution.

As I wrote earlier this week, many Wall Street firms are quietly offering well-heeled clients the ability to buy bitcoin and other digital currencies through their trading operations.

While these firms are not publicly endorsing cryptocurrencies, there’s money to be made there. You would need that type of liquidity in the market to see the price jumps of the recent weeks.

Has bitcoin taken on the role of gold and silver as a hedge against the dollar?

Many of the currency desks are the ones trading bitcoin now. So it would make prefect sense that the unencumbered bitcoin — which has no futures, options or ETFs with the ability to suppress pricing — may have replaced precious metals as the dollar hedge.

Now understanding that this trading has taken on a life of its own. And the knowledge and acceptance of bitcoin is in its infancy, but these price movements have some big institutional players behind it. If you can take wild price changes over the course of 10 minutes as sometimes a free market will do, then the rewards can be quite handsome.


Asian markets shrug off China downgrade

Moody’s bond rating agency cut China’s sovereign credit rating, saying the country’s financial strength will worsen in the coming years as its debt rises and the economy slows.

The move did little to halt rising stock markets in Asia, as both Chinese exchanges closed positive after the surprise cut.

The question is will China retaliate by slashing America’s rating as it has done in the past.

Moody’s downgraded China’s rating to A1 from Aa3. Moody’s last cut its China credit rating in November 1989, soon after the bloody crackdown on mass protests in Beijing’s Tiananmen Square rocked the nation. China’s credit rating is now the same as  Japan, Saudi Arabia and Israel.

Meanwhile later Wednesday the Federal Reserve’s May meeting minutes will be released at 2pm. Analysts say the message will confirm a June rate rise.

As I have said many times, there will be only the one rate rise this year. The minutes will  point to a slowing in inflation rate, which will put any rate rise on the back burner.

Bitcoin has a 400% return over last 12 months

Bitcoin is having its moment but it could leave you queasy in its price gyrations.

The often maligned crypto-currency continued its incredible run on Monday, soaring to nearly $2,300 at 10:30 p.m. EDT before seeing a $200 pullback overnight — leaving it up 124 percent this year and ahead nearly 400 percent over the past 12 months, according to Coindesk.

By Tuesday morning in EDT, the digital currency was making another run trading at $2,215 giving it a market cap of $36B plus.

By comparison, the Dow Jones industrial average, in the midst of a Trump Rally, has gained 5.7 percent this year.

In fact, $100 invested in bitcoin in July 2010 would be worth $3.5 million today, according to a chart sent to some people by Jeroen Blokland, a portfolio manager on the Robeco Global Allocation team, according to MarketWatch.

The same investment at the same time in the S&P 500 would be worth $250 — excluding dividends, according to Blokland’s chart.

That means just a buck invested in bitcoin seven years ago would be worth $35,000 today.

The day the circus died

“The Greatest Show On Earth” folded up its tent on Sunday, which was the last performance of Ringling Bros. circus.

After 146 years of touring the US the circus ended with a performance at Nassau County’s Coliseum. Ringling Bros. audiences were falling for years as the tradition of going to the show fell from repeated efforts of animal rights advocates picketing shows and putting up videos of allege animal cruelty by circus workers.

Animal-rights organizations from PETA and ASPCA are celebrating this long-fought victory.

I must say I’m divided on this. While I am not for mistreating animals, these organizations also advocate the end of eating meat and are pressing for everyone to take up a vegan diet.

PETA’s motto is: “Animals are not ours to eat, wear, experiment on, use for entertainment, or abuse in any other way.”

Where does this end?

A politically correct world is not the ideal environment. It takes discussion, debate and dissent out of the equation, since you can be labeled a Neanderthal or worse old.

Bankruptcies soar in NY federal court filings: Judge

Chapter 11 bankruptcy filings are soaring in New York and Delaware, according to a New York Federal judge speaking at a bar association panel discussion late last week.

“Chapter 11s have exploded” said U.S. Bankruptcy Judge Shelley Chapman told the panel suggesting that businesses are suffering mightily in the latest near zero business growth.

Chapter 11s have tripled in the first quarter of the year, Chapman added.

“The report is that for at least a lot of retailers, it is certainly a difficult, if not flat-out impossible environment to operate in,” Judge Shannon said in her discussion. “We do see more of those cases likely on the horizon.”

And according to other data Delaware state court, according to Judge Brendan Shannon  has also seen an uptick in Chapter 11s filings, though not as marked as in New York. Shannon also sees the trend in retail and energy sector bankruptcies continuing, based on current cases.

So Delaware state court, which administers many corporate filings due to its pro-business laws, and the federal court in New York are both seeing upticks in businesses failing.

These are retailers that offer entry-level jobs for some and a much-needed part-time jobs to people displaced from their full-time career are reorganizing in bankruptcy, which usually means closing stores and laying off tens of thousands in the aggregate.