Whichever sectors you’re mainly interested in doesn’t matter one bit. Crypto is under fire and it’s been difficult to pick out any US stocks given recent fears of high inflation just around the corner.
The US economy is the driving force behind the world economy and even though nobody is suggesting anything disastrous is about to happen, it does put a bit of a dampener on the markets, making it more difficult than usual to pinpoint good investments.
Bitcoin - How Long Before it Recovers?
The last few weeks have been a telling time for Bitcoin. The world’s leading cryptocurrency looks to be under fire from all directions. For a while it looked as if the price was firmly proportional to anything Elon Musk had to say, and with that we could almost have been happy; but it didn’t end there, unfortunately. Tesla’s announcement that it would no longer accept Bitcoin as payment was just the beginning.
The Chinese government has finally decided to do something about what they perceive as a possible nuisance down the line. This week they blocked accounts on the Twitter-like social media service Weibo that were related to cryptocurrency, citing violations of rules and laws.
Last month the state council spoke out against Bitcoin mining and trading, promising to clamp down hard on the industry as a whole within their borders. Three industry bodies also published statements saying they would no longer accept payments via cryptocurrency financial payment services.
In the USA, Donald Trump has spoken publicly on how Bitcoin is a scam that affects the value of the US dollar.
"Bitcoin, it just seems like a scam. I don't like it because it's another currency competing against the dollar."
News that the US authorities recovered $2.3 million of the $4.3 million ransom didn’t do the value of Bitcoin any good either. The price tumbled 12% with investors reacting to fear that the blockchain technology isn’t as secure as initially thought if the FBI can just break in and take the money. They declined to say how they recovered the money.
Our position with BTC isn’t looking good because of all of this, as you can see above. Nonetheless, as stated before, we will continue to hold. It’s only a matter of weeks since Ark Invest founder and CEO Cathie Wood said Bitcoin could end up worth as much as $500,000, so there’s still a lot of potential upside on this position.
Marstons PLC
This position ended up around breakeven with the team only losing a couple of dollars. The pubs are open around the UK but the rush to go out and socialise during the British summer doesn’t seem to have helped this large brewing company too much. We wonder if its sales were offset via the supermarkets during lockdown and nothing much changed for them.
US Outlook
June is predicted to be a stable month for the markets in the US. After the markets wobbled with talk of high inflation coming, things have steadied and the US once again looks like a good place to look for new positions.
The key for this trade is to stand firm until July when the Q2 earnings reports start to come in. It will be important to stay on top of the news as we hear what the experts think about the short-term future.
As the vaccine program continues to pull countries out of lockdown situations we need to also keep one eye on how this is affecting the world’s largest economy. There might be some added-value that is unexpected coming our way.
Tourism is one area that can cause a positive shift quickly. Take Las Vegas, for example. Looser border controls in the US could see swathes of tourists returning to Sin City ready to spend what they’ve saved from last year. It’s a lot of whats and ifs, but we should always be alert for any possible opportunities.
