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Monday, 20 May 16:25 (GMT -05:00)



Foreign exchange market

Bitcoin and other Altcoins – Currencies or Commodities?


The cryptocurrency phenomenon has been the most discussed to topic related to financial markets this year. International experts have been discussing the essence and prospects of digital currencies.
 
Just 12 months ago, you could read about Bitcoin and other cryptocurrencies in financial editions. Today, all mass media are highlighting the topic in detail. Even housewives seem to be getting interested in digital currencies.
 
In case you don’t know, Bitcoin is the world’s first cryptocurrency. This year, it has been setting new all-time highs over and over again. Since early 2017, the BTC exchange rate has increased by as much as 1000%!!! Each Bitcoin rally is followed by a certain kind of panic and doomsday forecasts predicting financial bubbles that are about to burst. However, everything has been going the opposite way so far. They say big-scale investors are now getting increasingly interested in cryptocurrencies.

 

For instance, in August 2017, 70 major hedge funds announced their investments in Bitcoin. Today, the number has increased up to 120 hedge funds. Better yet, Bitcoin derivatives (like futures) are about to come into existence. The CME and CBOE have already announced that. Even NASDAQ is now ready to join in. it seems like big-scale institutional investors are about to enter the cryptocurrency market as well.
 


Cryptocurrency can be seen as an innovative asset. What do you actually compare cryptocurrencies to? Currencies, stocks, commodities? Jeff Curry, global head of commodity research for Goldman Sachs, shared his opinion with us during his interview to Bloomberg

To start with, Bitcoin has recently shown the trait that has been scaring away many of those big-scale investors. Specifically, we are talking about volatility. Indeed, cryptocurrencies in general and Bitcoin in particular have always been rather volatile, with a constant roller-coaster thing. He thinks that is a natural process for relatively young assets. Today’s Bitcoin market cap is $160-170 billion. On the one hand, that’s quite a lot. But on the other hand, these figures cannot be compared even close to the ones of gold. The gold market cap is $8300 bn. The point is, gold has been a reliable investment asset for centuries while digital currencies are babies with a couple of years of history. If digital currencies survive and last for decades, they may see their market cap boost and their volatility decline. 

 


He compared cryptocurrencies to rare-earth metals like cobalt, lithium etc. Those commodities have also increased in value quire a lot over the last few years, and the prices are still going up from time to time. This market is also subject to low liquidity, which also leads to high volatility. For example, those metals went up in value instantly after the demand for electro-cars started increasing worldwide. However, after going up in value, they also started being rather volatile, almost like cryptocurrencies. So, the bottom line is, volatility is a infant disease typical of all low-liquidity assets. But cryptocurrencies are getting more liquid and they will definitely get rid of this disease over time.

 

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Forex and Cryptocurrency Forecast by NordFX. May 20-24, 2019

Roman Boutko, an analyst for NordFX, has come up with another consensus forecast for the forex and cryptocurrency markets for the forthcoming trading week starting on May 20, 2019.


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Bitcoin Reaches 5-Month High

The cryptocurrency has been maintaining a stable bullish trend. over the last few days, the market cap has exceeded 185 billion dollars. According to CoinMarketCap, the market cap used to be 179 billion dollars on Tuesday. Over the last few days, the cost of all the cryptocurrencies circulating in the global market has grow considerably. 

 
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Ethereum is back in the game! It's currently trading around 5-month lows. Still, the market seems to be showing some confidence that the coin has already overcome its existential crisis and managed to recover from crisis that started after the ICO bubble burst in 2018. Will ETH and ICO revive?

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NordFX Shares Another Forex and Cryptocurrency Forecast for Mid-April 2019

The balance of powers in the international currency market (also known as forex) influences many contemporary tendencies in the entire world. At the same time, traders and investors rely on accurate forex forecasts to earn money. That is why we keep on publishing those weekly consensus forecasts, courtesy of NordFX.
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Weekly Forex and Crypto Prediction by NordFX. Mid-April 2019

Any exchange rate between any two currencies is the result of multiple factors affecting the currency pair at any given moment. At the same time, those exchange rates themselves are actually capable of affecting other processes important to specific countries and even the entire world.

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