Friday’s Weekly Market Wrap Up 5/21/21

This was a rough week for the cryptocurrency market. I wrote about the almost $1 trillion that evaporated from the crypto market in my last post “Crypto Market Meltdown“. This plunge was primarily driven by news that China is cracking down on institutions involved in any cryptocurrency activities. Bitcoin has come crashing down from its all-time high of over $64,000 per coin on April 14th down to around $36,400 as of now. This news came in the wake of Elon Musk criticizing Bitcoin for the energy required to run their blockchain, which was also very damaging to the price of Bitcoin.

On Friday morning, Apple CEO Tim Cook took the witness stand to defend his companies control of their App Store. In case you’re not familiar with the case, Apple is currently involved in an antitrust case where the makers of the popular videogame Fortnite, Epic Games, are arguing that Apple’s practice of charging a 30% commission on app developers that make at least $1 million a year violates antitrust laws. This battle started in August 2020 when Fortnite was removed from the Apple App Store after Epic Games added its own payment option for in-app purchases, which violated Apple’s rules requiring developers to use their purchasing system. Tim Cook emphasized Apple’s public commitment to privacy and data security as key reasons for its tight control over the App Store.

Many investors are increasingly worried about inflation, which has helped cause the recent downturn in the stock market over the past few weeks. The S&P 500 and NASDAQ have had a mixed week full of up and downs, but both ended the week slightly down less than half a percent. Wednesday was a rough day for both the stock market and cryptocurrency market, although the stock market got close to being back to where it started the week. Tech stocks have underperformed the market average, but does this just mean buy the dip?

I recently bought the dip and picked up some tech stocks including Snowflake Inc., Lemonade Inc., GoodRX, and DraftKings Inc. and they all appear to have hit a floor price and are slowly bouncing back, hopefully. These could be a few stocks to keep an eye on. That’s my thoughts and opinions anyways, but this is not financial advice.

The digital artist beeple recently released an amazing picture of two barbarian looking fellows eating around a fire with a giant dead bull in the background entitled, “Crypto Winter”. I feel like this image sums up many investors’ feelings about cryptocurrencies at the moment. I currently have some Bitcoin, Ethereum, Cardano, and Polygon in my crypto portfolio but I don’t plan on adding until the market starts picking back up. I plan on not selling and diamond handing these until they hopefully have another massive bull run like we experienced over the past few months. What’s your thoughts on the current state of the cryptocurrency market? What’s your thoughts on tech stocks and the stock market? Leave me a comment and share your thoughts!

Image by beeple (Twitter @beeple)

Crypto Market Meltdown

I woke up this morning and checked on my Coinbase account like normal to see what’s going on with my portfolio and that was a rough way to start the day to say the least. Cryptocurrencies have been on a down trend for the past week or two so I wasn’t expecting much but the massive drop that occurred this morning at 6am Pacific was an eyeopener. We all know the cryptocurrency market is notorious for being volatile and having big swings up and down, but this was a massive spike down where Bitcoin bottomed out at $30,000. Bitcoin hasn’t been that low since January of this year.

What’s causing the crypto market to meltdown? Multiple factors have led to the downturn in the crypto market but this morning there was news that China is banning all cryptocurrency related activities. The three organizations authorized by Chinese regulators to oversee their respective industry segments: the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China, released a joint statement that bank and payment institutions cannot conduct business related to cryptocurrencies, specifically banning activities including cryptocurrency registration, trading, clearing and settlement.

According to a Forbes article released today written by Jonathan Ponciano, “The value of the world’s cryptocurrencies dropped about $50 billion, or 2.5% immediately after the announcement, pushing the week’s staggering losses to roughly $500 billion from a Wednesday high above $2.5 trillion.” The statement was reiterating a 2017 ban on the same cryptocurrency related activities but the fact that China sounds serious now had a massive impact on the crypto markets.

The incredibly fast rise of cryptocurrency values was sure to lead to a market correction, which is what I think we were experiencing the past week but this news from China could be signs of worse things to come. According to that same Forbes article, US Securities and Exchange Commission Chair Gary Gensler has suggested that his agency may be gearing up for a crypto crackdown in light of the market’s recent volatility. This would be disastrous if the US were to implement any type of regulation on the crypto markets, prices and values would plummet.

What’s your thoughts on Wednesday’s big drop caused by the news from China? Do you think this is the end of cryptocurrencies or is this just a dip to buy and diamond-hand through? Leave me a comment and let me know your thoughts.

Photo by Executium on Unsplash

Weekly Friday Wrap Up 5/14

It’s been a couple weeks since I’ve done a wrap up (blame MBA exams and projects) but I need to talk about some huge news stories that have happened over the past week. The month of May has lived up to the old saying of, “Sell in May and get away” because it has been a bloody red couple of weeks for the stock market. The tech sector has experienced the brunt of the massive sell-off. Even after the biggest companies around, like Google, Microsoft, Amazon, and Apple, posted massive record earnings, their stock prices all dipped.

Yesterday and today have started to see a rebound for tech stocks but the markets are down for the week overall, down 1.6% for the S&P 500 and 2.8% for the tech-heavy Nasdaq. The S&P 500 and the Dow started the week by suffering their worst three-day losses in almost seven months. Prices have also been falling over the past couple weeks over increasing fears of inflation, especially in the price of raw materials like metals for microchips, lumber, and crude oil.

As always now days, cryptocurrency has been a main topic in investing news. The biggest news is Elon Musk’s tweet announcing that Tesla has suspended accepting Bitcoin as payment due to “environmental concerns”. I’ve heard rumors that this is actually a deliberate action by Elon Musk to bring the price of Bitcoin down because he’s fighting with a hedge fund that has options on Bitcoin and that same hedge fund was involved in tanking the price of Dogecoin and Tesla stock prices. So the rumor is he deliberately tanked the price of Bitcoin to get revenge on them.

I personally think since the price of Bitcoin has dropped and is still on a declining trend over the past month and week, it makes sense to stop accepting it if it’s quickly losing value. But he took the announcement a step further by saying it was due to the environmental impact of the proof-of-work process used to secure the blockchain network, and that he is, “looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.” Some people are confused because Dogecoin, which he has publicly supported, also uses the proof-of-work process, although they use scrypt-based technology which is slightly different than the SHA-256 based equipment used to mine Bitcoin.

This past week has seen a lot of ups and downs in both the cryptocurrency and stock markets. What’s your thoughts on “sell in May and get away”? Have we reached the bottom level prices where it’s time to buy the dip? What are your thoughts on Elon Musk’s tweet and the future of cryptocurrencies? Leave me a comment!

Photo by Nick Chong on Unsplash

Elon Musk, A.K.A the Dogefather

Elon Musk was on Saturday Night Live this past weekend and of course he talked about Dogecoin. As you may or may not know, Elon Musk, the CEO of Tesla, is an avid cryptocurrency fan. And his favorite crypto is of course Dogecoin. I discussed Dogecoin in a previous post. There was such a big buildup whether or not Elon Musk was going to talk about Dogecoin before the show that some casinos in Las Vegas let you bet on if he said it or not.

And of course Elon Musk talked about Dogecoin on SNL. The first mention of it came in his opening monologue where he was talking about getting his mom a birthday present at which time his mother said “I hope it’s not Dogecoin”, and his response was, “It is.” In one skit, Elon was playing a cryptocurrency expert where he tried explaining multiple times was crypto and Dogecoin are, ultimately saying, “it’s a hustle.” All of this was meant as jokes and to be funny, which I personally thought the episode was hilarious, but there were definitely some serious real-world reactions to his appearance.

The price of Dogecoin (DOGE) was steadily climbing all week in anticipation of the SNL episode. The price of Dogecoin started out at $0.39 early Monday morning and reached its peak all-time high of $0.74 on Friday night. The price was expected to reach its peak on Saturday during or after the show. But starting at 11pm on Friday night, the price started dropping.

Dogecoin’s value was fluctuating all day Saturday and finally at the time the SNL episode ended, the price looked like it officially jumped off a cliff. Its price dropped from $0.66 down to $0.46 in just 10 hours. The price has gone up and down since then and is currently trading around $0.45.

The hype around Elon Musk’s SNL appearance was similar to the hype building up to 4/20/21. And like “Doge Day 4/20”, the SNL hype train also culminated in an early fizzle. I personally like the usefulness of Bitcoin and Ethereum, but I struggle to see the value in most altcoins. What are your thoughts on Dogecoin and altcoins in general? Leave me a comment and let me know.

Photo by Vance Alm

Friday’s Market Update

This week was full of ups and downs in the stock market and especially in the cryptocurrency market. This week’s biggest story was Dogecoin. The Dogecoin story started last week on 4/15 when the joke cryptocurrency started rapidly rising in value. I go into detail about Dogecoin’s attempt to shoot for the moon in my previous post, “Dogecoin to the Moon… and Back. Signs of a Crypto Bubble?“.

Dogecoin experienced explosive growth of more than 450% in less than a week, peaking in value around $0.42, with the culmination supposed to happen this past Tuesday, 4/20. The hype train was trying to convince people the price of Dogecoin would go up to $0.69 on 4/20 (clearly a lot of financial analysis went into coming up with that valuation and timeframe…). “Dogeday” as it was being called was an absolute bust and as of 1am on 4/20, the price of Dogecoin (DOGE) was on a downhill rollercoaster and it is currently trading around $0.23.

In other cryptocurrency news prices for almost all cryptos, including Bitcoin and Ethereum, took a plunge in value over the weekend and they still haven’t recovered. Ethereum (ETH) briefly recovered and actually reached a new high when it was trading around $2,600. Bitcoin on the other hand has dropped even more from its weekend dip. Bitcoin slipped under $50,000 for the first time in almost two months, and it’s still hovering around $50,000.

Thursday afternoon, the stock market looked like it jumped off a cliff after news leaked from the White House that President Biden is looking to implement a massive tax hike on companies and wealthy individuals. The leaked report suggested Biden was considering increasing the capital gains tax rate on those earning more than $1 million to 39.6%. The current base capital gains tax rate is 20%. The response on Thursday seems to have been an overreaction because the stock market is doing very well today, Friday.

This has been an exciting week, especially in the cryptocurrency market. Next week should be interesting with mega-cap companies like Apple, Amazon, Google, and Facebook will be releasing their first quarter earnings statements. The earnings from these giants will surely have an impact on the overall markets so I’ll be sure to keep you up to date. Don’t forget to follow my blog so you can stay informed on everything investment related.

Photo by Vance Alm

Dogecoin to the Moon… and Back. Signs of a Crypto Bubble?

I’ve been writing a lot about cryptocurrency lately because I feel like that is all you hear about in investing news. But Dogecoin showed everyone why when the price of 1 Dogecoin (DOGE) skyrocketed 203% in just 24 hours. Within the past week, Dogecoin has had an insane 452% increase. Its value reached its peak early this morning, and it has been on a downhill slide since then. Besides making people kick themselves for not investing in this earlier, this spike has also raised questions and worries about a potential bubble effect in the crypto market.

Dogecoin was literally created as a joke, and it now has a market value of over $40 billion. This spike has added over $20 billion to Dogecoin’s market value. The fact that Dogecoin doubled in value has people asking why this happened? There are multiple factors that played into this rapid spike in value, but the popularity effect might be one of the biggest reasons.

Cryptocurrency has been all the rage over the past couple weeks with Bitcoin hitting its record of more than $64,000 per coin and Ethereum reaching it new record when it topped $2,500. Part of this crypto craze was Coinbase releasing their DPO on Wednesday. Clearly, there has been a lot of excitement around cryptocurrencies building over the past week. All of this combined with Dogecoin’s biggest supporter, Elon Musk, sending out the tweet pictured below where he said, “Doge Barking at the Moon”, sparked people to go crazy with buying Dogecoin.

Tweet by Elon Musk on Twitter

I unfortunately was jumping on the Dogecoin bandwagon too late and the fact that it had such a dramatic spike which is being immediately followed by a slow crash makes me very wary about buying in at its peak price. In my previous blog post, “How to Buy Bitcoin and Use Coinbase“, I talked about buying Bitcoin (which has been hovering around its peak price) which I view as a more long term investment because it has so much big institutional support, with strong potential to become an actual widely used currency. Dogecoin on the other hand, I view as more of a quick trading asset.

What are your thoughts on Dogecoin? Are you buying some and hoping it keeps shooting to the moon? Leave me a comment with your thoughts on Dogecoin, Bitcoin, and cryptocurrency overall. Is it all a hype bubble that will burst soon?

Photo by Clay Banks on Unsplash