Top Movers
- Bitcoin has seen a price surge this week that peaked at $7,600, before falling to around $7,400 at press time.
- Dash, an altcoin known for anonymity, rose 11.09% over the past week, posting the largest gains of the top-20 altcoins.
- Uber has lost 7% since its IPO share price of $45 and is significantly below the $45-50 share price offered to private investors before going public.
- Silk Road Medical, a medical device firm, has risen by 18.79% over the past week, thanks to an earnings report that showed a 124% increase in revenue compared to Q1 2018.
- Qurate Retail, an e-commerce business, experienced a 25.67% slump on the back of disappointing earnings stemming from difficulties in integrating Home Shopping Networks brands.
Bitcoin Is $7,800, Up 8% Today, +51% Month-Over-Month, Reaches A New 9-Month High
Bitcoin’s long bear market may finally be over, as the price surged above $7,000 for the first time in nine months. The price surge has negated nearly 24% of losses incurred since December 2018 and could signal a continuing bullish trend. The first signs of the price hike could be seen last Friday, starting with almost uninterrupted positive growth from $6,150, peaking at $7,600 on Sunday. While the upward trend can be seen as a continuation of trends from the past 3 months, Bitcoin’s rapid price appreciation has raised some questions.
Why has the price shot up? In short, no one knows, though speculation abounds. Some more credible reasons have been proposed, of course, including the Bitfinex/ Tether drama and increasing tension in traditional markets due to the escalating US-China trade war.
Any other reasons? It’s not a reason, exactly, but Bitcoin trading volumes on major exchanges have risen sharply, coming close to the levels seen during Bitcoin’s historic $19,000 high. Confirmed daily transactions have more than doubled since the same time last year and the mining hash rate is up 377%. These fundamentals typically signal a return of interest in the cryptocurrency.
Is this is a long-term trend? It’s difficult to say for sure, and some analysts are predicting that this is only a short-term movement before the inevitable correction. Others, however, see evidence of positive growth for at least the next few months...
THE TAKEAWAY: Bitcoin is famously an extremely volatile asset, yet the upward trend isn’t a complete surprise to everyone, and there’s a reason to think that the price will only keep rising in the short-term. On the other hand, a lot of crypto trading is facilitated by Tether, which is currently accused of hiding $850 million in losses…While the allegations have yet to be proven and have not affected Bitcoin’s price so far, always keep in mind that quick reversals aren’t exactly unknown in the crypto world...
The US-China Trade War Continues to Escalate
Despite hopes of a ceasefire during last week’s trade talks between the United States and China, the latest volley in the US-China trade war doesn’t look like it’s going to be solved any time soon. After tweets by US President Donald Trump indicated that tariffs on $200 billion of Chinese goods were to be raised from 10% to 25%, China has decided to shoot back.
What have the Chinese attacked? Some of the biggest losers are semiconductor companies, including Nvidia, a company known for making high-quality video cards. Nvidia’s stock slid more than2.5%on Friday. Apple stock is down another 3% as its products are targeted by the tariffs as well.
But that’s not all - China has slapped restrictions on more than $60 billion worth of US goods, ranging from 5 to 25% tariffs. These include US automakers, farmers, and many other products. In total, tariffs are being applied on around 5,000 US products.
There’s still no solution in sight: While talks in Washington are progressing, negotiators have claimed that they’ve reached an impasse. Further negotiations must include an end to tariffs, says the Chinese side, but US President Donald Trump is hoping that a short-term boost from the trade war will help his 2020 election changes.
THE TAKEAWAY: Market’s have slid on the latest of Trump`s tweets where he’s accused China of unfairly profiting by $500 billion a year. Equity markets have shown their worst week of the year to date, with every single stock market posting losses at the end of the week. The Dow is down 1.8%, NASDAQ is down 2.5%...and if negotiations don’t start bearing fruit soon, we’re almost definitely in for turbulent waters ahead.
Uber Finally Went Public - And Was An Immediate Disappointment
One of the pioneers of the ‘ride-sharing’ gig economy, Uber finally held its historic IPO last week. Unfortunately for Uber investors, it didn’t go quite as planned. Uber shares are down 12% on its second day of trading, putting it into the list of worst-performing-IPOs in history In total, first-day investors recorded a loss of $618 million when buying in at Uber’s listed IPO price of $45 per share.
Pre-IPO investors lost the most: While first-day investors lost quite a bit, the biggest losers were Saudi Arabia’s wealth fund, and Japan’sSoftbank, who bought in at around $48 per share.
Uber’s not the only ride-sharing IPO loser: Lyft, a competing ride-sharing app, is also down more than 23% since its IPO filing in October, though Uber’s market cap is five times bigger than Lyft.
Where does Uber go from here? First-day performance isn’t always indicative of later performance, as Facebook`s IPO proved. In fact, the stock’s poor performance may not be down to Uber at all, but simply part of a larger trend of bad news riding on the expanding trade war between the United States and China.
THE TAKEAWAY: Uber isn’t going anywhere, and it has a market cap of $75.5 billion, making it larger than Ford and General Motors combined. And while the US-China trade war hangs above all stock movements for the foreseeable future, Uber itself is actually well-isolated from the various tariffs being imposed from both sides, as all you need for Uber is a smartphone and a car. In fact, a bigger worry is Uber’s inability to turn a profit, which should give pause to any investor on a long-term perspective.