Market Brief: Litecoin halving, Energy War & Pound crash
Weekly Review of Financial Markets
Let’s start off the with the Cryptoverse where the general sideways trading continued with Bitcoin leading the pack. So far BTC has been unable to penetrate the $12K level, while the rest of the Alt. coins remained anemic. The bigger news this week, however, was the Litecoin halving, which took place on August 04 — an event that takes place every four years.
Halving or reducing the mining rewards to half, done to maintain the supply of a digital coin was being watched closely by the Crypto community since a significant impact on price and miners was being expected. The initial euphoria of the event and a price gain of about 13% fizzled out pretty quickly as LTC has continued its downward price trend in the short term (chart below).
The hash rate for LTC which had been on the rise since the beginning of 2009 has remained steadfast in the wake of the event so far as the drastic cut in mining interest didn’t materialize. The Crypto community seems to have taken this event in stride as they look towards the next main LTC event — the Litecoin Summit due in less than three months from now.
As the trade tensions escalate with the recent tit for tat actions by the U.S & China, the trade hostilities have transformed into technology war to a currency war to what seems to have become an energy war as well. The retaliatory measures by China are getting bigger as tariffs have already seen the U.S collect $63B from China in the 12 months through June.
China became the world’s largest oil buyer in 2017 as the U.S became the biggest oil producer in 2018 surpassing Saudi Arabia and Russia. But with the global oil consumption increasing at the slowest rate since 2008, the trade war is going to bite further into the profits of the commodity-producing nations.
On top of that, China may soon start avoiding the U.S crude oil imports deteriorating the already fragile outlook for the commodity. This action might provide a recessionary shock to an already reeling global economy.
And finally in Forex markets, Pound Sterling is trending closely to the to its post flash crash levels of 2016. GBPUSD pair closed @ 1.2022 barely 100 pips away from the long term support. The price action in the pair was triggered by the continued uncertainty around the Brexit issue which seems nowhere close to resolution even with the new Prime Minister taking the helm of affairs in the UK.
The worst was yet to come as the Office for National Statistics in the country revealed that the country’s GDP growth rate fell to -0.2% (chart above)— the worst performance since 2012. The economic numbers which had so far held well against the backdrop of Brexit issue, finally seem to be caught up with the reality. The rise in the value of the Greenback due to the risk-off sentiment in markets is not helping the case of this forex pair either.
Here are some of the other notable news from the Cryptoverse to wrap up the week.
Adoption:
- Mastercard is eyeing the crypto wallet space
- Grocery Involved in Nearly Half of all DLT Supply Chain Projects
- Walmart wants to Patent a Stablecoin that looks a lot Like Libra
- Samsung expands its Blockchain DApp Kit with New Services
Trading & Exchanges:
- FCA Authorizes Robinhood to Operate in the U.K
- Around 300 Addresses Contain 80% of Tether Supply
- Coinbase continues to explore support for 8 new digital assets
- Trading Platform EToro Adds Support for Tezos
Regulation:
- Bitcoin Crime Search Engine paves way for a New kind of Law Firm
- British Authorities seek Data from Crypto Exchanges of Tax Evaders
Banking & Economy:
Ending things on a lighter note with a comic on the slowing global economy.
