(APPLE LAUNCHES ITS OWN SAVINGS ACCOUNT WITH A 4.15% INTEREST RATE)
April 19, 2023
Hello everyone,
An Apple laptop, an Apple iPad, an Apple iPhone and now we are being lured to purchase an Apple Card with a savings A/C attached and an enticing interest rate.
The card requires no minimum deposit or balance, and users can set up an account from the Wallet app on their iPhones.
Users must have an Apple Card to open the savings account.
In a press release the company stated that all daily cash reward earned through the Apple Card will automatically be deposited to the savings account. Daily Cash is the Apple Card reward program that offers up to 3% back on purchases. Users can change where their Daily Cash is deposited at any time and can also add funds from their bank account to build on their earnings.
Apple is launching the Savings Account through Goldman Sachs.
APY on savings accounts, on average, are quite low. Some even offer as little as 0.40%. Other institutions like credit unions and online banks and brick and mortar banks offer customers an attractive APY.
For instance, CIT Bank offers a savings account with a 4.75% APY when customers deposit a minimum balance of $5,000. Capital One’s savings account has no minimum balance, and users can earn a 3.5% APY. Vio Bank offers a savings account with a 4.77% APY with no minimum balance.
Apple Card savings users can manage their accounts through a dashboard that will appear in the Wallet app, where they can track their interest and their account balance or withdraw funds.
The feature is rolling out inside the Apple Wallet app on iPhones now.
Wishing you all a healthy and prosperous week.
Cheers,
Jacque
“Don’t be trapped by dogma – which is living with the results of other people’s thinking.”
JOHN’S VISIT TO MUSK’S GIGAFACTORY AND THE TRINITY SITE
Monday, April 17, 2023
Hello everyone.
I hope you are all refreshed after the weekend and ready for another week of trading and expiration on Friday, April 21.
Before I get into my post today, I would like to extend a “get well” note to one of our Concierge subscribers, Linda Constable. She has Covid and is under the weather at present. We are all wishing you a speedy recovery.
Today I am going to dive into John’s Monday newsletter and give you a summary of what’s in store.
John has recently visited Elon Musk’s Gigafactory, 20 miles east of Reno. To say it is massive would be an understatement. No cameras are allowed after you enter. The factory consists of an army of robots building machines. Human beings make a scant appearance when needed, otherwise, they are barely visible. John shares that the factory occupies about 2 million square feet or about 33 football fields. Japan’s Panasonic, which has the contract to supply the batteries, occupies a substantial part of the factory space. When it is finished it will occupy 6 million square feet, making it the world’s largest building. The facility is energy neutral and runs 24/7.
The state of Nevada will benefit from Musk’s facility. The state has granted Tesla a ten-year tax holiday to start the second phase, which will employ another 5,000. Whole cities are starting to spring up out of nowhere as buildings and businesses spread east from Reno.
Musk is charging ahead to meet his 1.8 million vehicle targets for 2023, up 40% from 2022.
John has reminded us many times, THE FUTURE IS HAPPENING FASTER THAN ANYONE REALISES.
Tesla is really a preview of what will eventuate in the business sphere and in our everyday lives. AI/automation trend is moving rapidly, and the consequence will be an eventual tripling of the value of companies that embrace these trends and wipe out those that don’t.
ALL companies are AI plays, John says. This is largely behind his DOW 240,000 in a decade prediction. John reminds us that Microsoft brought out its office in 1990 and it instantly made ALL companies more valuable as they adopted it. The Dow Average soared by 20 times from $600 to $12,000. It will be a similar story with AI.
John argues that a 20-fold return from here takes the Dow Average from $34,000 to $680,000, except that it will happen much faster as technology is hyper-accelerating. Therefore, John thinks that DOW 240,000 looks like an easy target.
If you think John has been taking a substance no one knows about and is exaggerating these numbers, think about these headlines for a moment.
FedEx (FDX) fires 86,000 drivers, who will be replaced by robots.
Uber (UBER) is replacing its 5 million drivers with autonomous drivers to increase reliability & cut costs.
Dentists adopting AI to read X-rays are catching 12% of cavities they miss, thereby increasing fillings and increasing profits.
In five years’ time, John says that companies like Microsoft’s (MSFT) Chat GPT and Alphabet’s (GOOGL) DeepMind Technologies will be spun off and sold at enormous multiples to the public.
The roaring 20s, will be a part of our lifetime with technological advancements providing the juice. All asset classes will rocket in value – including stocks, bonds, commodities, precious metals, energy, and real estate.
The 2020s is the genesis of AI and robots.
Start lining up those stocks to buy because in five to ten years you will be sitting on a very rewarding basket of stocks.
John’s 2023 year-to-date performance is now at +49.57%. His average annualized return is up to 48.51%.
John took profits on his JPM trade after it posted fantastic earnings. He rolled that into a Boeing (BA) trade. He also took profits in his April bond long (TLT) and rolled it into a May bond long. He will run his remaining April long positions in (TSLA), (BAC), (C), (IBKR), (MS), (FCX) into the Friday, April 21 expiration.
I hope you all had at least one of those positions.
John’s life is full of great stories. His visit to the Trinity site at the White Sands Missile Test Range is just one of them. This was where the first atomic bomb was exploded on July 16, 1945. He tells us that the 20-kiloton explosion set off burglar alarms for 200 miles and was double to ten times the expected yield.
Uranium plays like Cameco ((CCJ), NextGen Energy (NXE), Uranium Energy (UEC), and Energy Fuels (UUUU) are great long-term plays. John tells us that uranium is being described as a carbon-free energy source needed to replace oil.
I’ll leave you today with some myths and facts about AI. There is a healthy debate going on and analysts don’t agree on all aspects of AI.
Nine Options Positions expiring on Friday, April 21, 2023
Wednesday, April 12, 2023
Hello everyone,
I thought I would show you how many positions John has that are expiring on Friday next week and what John says to do about it. Some of you will have all or some of these positions. For those of you who are just watching and learning, these are examples of option trades that will pay you a handsome profit. (Provided, of course, a black swan doesn’t swoop over our heads between now and next Friday).
How to Handle the Friday, April 21 Options Expiration
Followers of the Mad Hedge Fund Trader alert service have the good fortune to own NINE deep in-the-money options positions that expire on Friday, April 21, and I just want to explain to the newbies how to best maximize their profits.
These involve:
Risk On
(TSLA) 4/$130-$140 call spread 20.00%
(BAC) 4/$20-$23 call spread 10.00%
(C) 4/$30-$35 call spread 10.00%
(JPM) 4/$105-$115 call spread 10.00%
(IBKR) 4/$60-$65 call spread 10.00%
(MS) 4/$65-$70 call spread 10.00%
(BRK/B) 4/$260-$270 call spread 10.00%
(FCX) 4/$30-$33 call spread 10.00%
Provided that we don’t have another 2,000-point move up or down in the stock market in the next eight trading days, these positions should expire at their maximum profit points.
So far, so good.
I’ll do the math for you on our deepest in-the-money position, the Tesla April $130-$140 vertical bull call debit spread. Since we are a massive $45.00, or 32% in-the-money with only eight days left until expiration I almost certainly will run into the April 21 option expiration.
Your profit can be calculated as follows:
Profit: $10.00 expiration value - $8.80 cost = $1.20 net profit
(12 contracts X 100 contracts per option X $1.20 profit per option)
= $1,440 or 13.64%.
Many of you have already emailed me asking what to do with these winning positions.
The answer is very simple. You take your left hand, grab your right wrist, pull it behind your neck, and pat yourself on the back for a job well done.
You don’t have to do anything.
Your broker (are they still called that?) will automatically use your long position to cover your short position in your debit spreads, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning April 24 and the margin freed up.
Buffett is investing in Japan.
Why?
The five trading houses – Mitsubishi Corp, Mitsui & Co, Itochu Corp, Marubeni and Sumitomo – seems to check every box of Buffett’s stock picking criteria.
First, they are classic value stocks, with a forward price-to-earnings ratio of 6.8, far lower than the average 12.5 in the MSCI Japan Index.
Second, they have a better-than-expected dividend yield, 5.2% on average, versus 2.7% for the broader Japanese stock market.
Third, the companies produce lots of cash flow.
Additionally, Berkshire can borrow very cheaply in yen and essentially the liability in yen can help hedge the currency exposure of the Japanese stock holdings.
The Japanese trading firms, also known as sogo shosha, are highly diversified companies involved in a wide range of products and services, including energy, machinery, chemicals, food, finance, and banking. They have been vital to the Japanese economy and global trade since they emerged in the post – WWII period.
Trust you are all having a great week. Enjoy the rest of it. Hope it’s extraordinary.
Cheers,
Jacque
“In order to be irreplaceable, one must always be different.” Coco Chanel
Artificial Intelligence is in our present and future
Monday, April 10, 2023
Hello everyone,
Easter has been and gone for another year and another week of the markets is upon us. What will it be this week – bullish, bearish, sideways, good news is bad news, bad news is good news or news is just news??
Maybe we just need to turn to our A.I device to find out. Is that the future?
So, what is A.I.?
In its broadest sense, A.I. is the capability of machines to simulate human intelligence – to think and act the way that humans do. But we all know that human intelligence incorporates much more than just thinking and acting. Learning is a big part of it. Therefore, for any artificial intelligence to be considered “true” AI, it also needs to be able to learn. After that, it needs to apply what it has learned (by generalizing the knowledge) to solve new problems. After all, humans learn from experience to make better decisions.
Types of AI
Artificial Intelligence is usually grouped into the following two broad categories:
AI Applications or “Narrow” AI
AI Applications are capable of simulating human intelligence in a limited capacity. They can learn or be taught how to perform several specific tasks as efficiently as possible. In fact, it excels when it’s performing a single task, despite being heavily constrained.
AI applications are what we use every day. One of the biggest examples is personal data assistants like Siri and Alexa. These systems are capable of speech recognition and processing of natural language to determine what task you need them to perform.
Artificial General Intelligence (AGI) or “Full” AI
AGI is the type of AI that computer scientists dream of creating. It can simulate human intelligence in the truest sense with the ability to adapt to a multitude of scenarios and solve almost any problems that it encounters. This AI can drive a car, go shopping, balance an accounting book or even fly an airplane.
Currently, this type of AI is rooted in fiction. A good example of AGI would be Data from Star Trek, HAL from 2001: A Space Odyssey and JARVIS from Iron Man. AI analysts believe we are decades away from achieving this level of AI.
If we manage to create AGI, it is predicted that this will give rise to “superintelligence”. This is the type of AI that will surpass human intelligence on every imaginable level, including on the creative and emotional level. One of the downsides of superintelligence is that it will eventually start believing it is better than humans and may try to dominate us. We’ll leave that to future generations to sort out.
Why Artificial Intelligence is Important
AI has a lot of benefits, and these extend to virtually every industry.
A few are listed here:
Making Existing Products More Intelligent
AI is not a standalone product; it is integrated into existing products to make them more intelligent. One area where this is taking off today is the internet of Things (IoT). This is a network of interconnected smart devices that constantly communicate to anticipate human needs with little human intervention.
For example, when driving home, your phone will communicate to your garage that it’s in range so that it opens when you arrive. At the same time, the phone will set the thermostat to a comfortable temperature depending on the weather report it “checked” on the internet. Also, once the phone senses you’re inside your home, it’ll turn on your favourite relaxation music or the TV so you can watch the news.
As AI improves IoT will become better at anticipating your needs to the point human intervention will be completely unnecessary.
Automating Repetitive Tasks
Humans can only perform a task for so long before it becomes boring due to repetition. Boredom doesn’t register in machines. They can deal with the mundane, while humans focus on more high-level tasks that machines can’t do, yet.
So, get your AI to check documents for errors, bill multiple clients for completed projects, send customer onboarding emails, while you plan your next vacation.
Speeding Up Decision Making
Humans can only process so much information at a given time. Stress and tiredness are among the many factors that play a role in our ability to make decisions on time. AI is free from all this reduce and only focuses on what it is programmed to do.
Reduce Human Error
What makes us human affects our decision-making processes and causes us to make mistakes. A well programmed machine will not make mistakes.
For instance, the use of predictive AI has helped reduce human error in forecasting the weather. Businesses and brands have used the same AI to help them identify customers who are most likely to buy them.
Always Available
It’s obvious, isn’t it? Machines don’t need rest. Whether it is lunchtime or 2AM Alexa will always be available to process your queries. It’s also why businesses use chatbots to help customers after business hours.
OK, so, this may sound great, but how do we profit from all these advances in technology?
There is one tech fund capitalizing on the artificial intelligence boom – and beating 90% of its peers this year.
Adam Benjamin, manager of the $9.5 billion Fidelity Select Technology Fund (FSPTX) believes that A.I. is probably the largest technology theme, driver, and disrupter in the next 10+ years.
The mutual fund is up 22% in 2023, outperforming the Nasdaq Composite, which has risen 15%. It also has a solid long-term track record, racking up a 15.7% annualized return over the past 15 years that puts it in the 10th percentile, according to Morningstar.
Companies that rushed to embrace digital transformation during the pandemic continue to seek ways to improve efficiency through large language models like ChatGPT enabled by A.I., Benjamin said. He goes on to say that the biggest facilitator in the industry is no doubt, Nvidia.
Benjamin says that Nvidia is the single largest beneficiary by a wide stretch in terms of A.I. The chip stock is the Fidelity fund’s third largest holding with a more than 8% weighting.
Nvidia shares have rocketed 84% this year, boosted by their biggest quarterly gain since 2001. Benjamin says Investors grew bullish on Nvidia’s A.I. vision, while also viewing the inventor of the graphics processing unit as one of the chip manufacturers best positioned to endure an economic slowdown that’s already hurting personal computer and wider semiconductor sales.
Other semiconductor names among Fidelity Select Tech’s top holdings include Marvell Technology, NXP Semiconductors, ON Semiconductor, and GlobalFoundries.
The fund is rated four stars by Morningstar.
A.I. is all around us and improving all the time. Use it wisely.
Have a wonderful week. Don’t forget to do something that doesn’t involve A.I.
The housing crisis in your future brought to you by climate change.
April 7, 2023
Hello everyone,
Most of us know about the changing climate. But few of us realize the implications of these changes on housing over the next 30 years and beyond.
We know about interest rates and the cost of housing, but what about the relationship between climate and the cost of housing.
It’s another crisis, which is going to spread its tentacles worldwide. No country will escape.
Dave Burt, CEO of investment research firm DeltaTerra Capital believes an overlooked and unpriced climate risk could see a repeat of a financial crisis in housing, albeit on a smaller scale in relation to the 2008 crisis. But still, it’s a damaging real threat to exposed communities.
Dave Burt was one of the few skeptics who recognized the housing market was on the brink of collapse in 2007. He helped two of the protagonist of Michael Lewis’ bestselling book “The Big Short” bet against the mortgage market in the lead-up to the 2008 global financial crisis. As it turned out, they were right and were estimated to have made millions.
Now here in 2023, Burt believes an overlooked climate risk could see history repeating itself.
Burt argues that DeltaTerra Capital’s research suggests that 20% of U.S. homes have “meaningful exposure” to a mispricing issue because of flood risk. If realized, he warned the fallout could resemble the extraordinary correction seen during the global financial crisis.
Even though he says that it could be a quarter the size and magnitude of the GFC, it still would be very damaging to exposed communities. Burt argues that there are cracks starting to appear in terms of the cost of insurance. Think about Hurricane Ian in Florida, for instance. The recovery here was an issue, particularly because this storm surge exposed a flood insurance nightmare for homeowners. We can also think about the people in Lismore, in Australia, where the residents have endured about three major floods in 18 months. Some residents have left, never to return. Others have offered their house to the market for around 200k. The only way people will be able to live in these areas again is if the houses are built on stilts, or if the community is relocated or if major feats of engineering are undertaken to protect the town.
I would argue that most people do not lose a lot of sleep over the climate crisis in relation to their portfolio. But a recent study has warned the U.S. housing market could be overvalued by around $200 billion due to unpriced flood risks.
This analysis was published in mid-February in the journal Nature Climate Change. Authored by researchers from the Environmental Defence Fund, the First Street Foundation, and the U.S. Federal Reserve, among others, the study modeled property-level changes in flood risk across the U.S. over the next three decades and warned that low-income households were particularly vulnerable to home value devaluation.
Jeremy Porter, head of climate implications at the First Street Foundation said it is a huge concern because climate risk is not being priced into the housing market. He goes on to say that the costs now or the valuation of homes don’t consider the realization of that actual flood risk, and that’s not taking into account that there seems to be a huge amount of overvaluation attached to properties across the country.
Insufficient climate risk information when purchasing a home poses a significant financial hazard as households could lose a large proportion of their property value overnight.
Eventually, Burt argues, there is going to be some sort of national tipping point where there is some type of bubble that bursts.
Presently, the study said that nearly 15 million U.S. properties face a 1% annual likelihood of flooding, with expected annual damages to residential properties forecast to exceed $32 billion.
In addition, the research also warned the increasing frequency and severity of flooding amid the deepening climate emergency could see the number of U.S. properties exposed to flooding increase by 11% and average annual losses jump by at least 26% by 2050.
The vacuum in climate-related information when purchasing property needs to be addressed. People need to understand what the climate-related costs are going to look like and rethink their property location if they cannot meet those costs.
Lower-income property owners are most at risk and this, in turn, has the potential to widen the wealth gap in the U.S. and exacerbate inequality.
How will local government tax revenues be affected?
They could be hit quite badly, as the total for municipalities typically relies heavily on property taxes. Having that tied to a physical asset that is exposed to climate change introduces a lot of risk to the stability of that revenue stream according to DeltaTerra Capital research.
This is not just a domestic issue. It is a problem for countries worldwide. And it morphs into a humanitarian crisis when you start looking at the issue through a global lens.
Munich Re, the world’s largest reinsurance company, observed steep economic losses in 2022 as the climate crisis drove more extreme weather events, such as Hurricane Ian in the U.S. and apocalyptic flooding in Pakistan. Reinsurance refers to insurance for insurance companies.
It estimated that these losses amounted to $270 billion last year, of which around $120 billion was covered by insurance. The insured loss total continues a trend of high losses in recent years.
Someone must pay in the end. Whether insured or uninsured, it becomes an increasing economic burden.
So, before you purchase your next property consider the climate cost also.
A very Happy Easter.
Be safe and enjoy time with family and/or friends.
Cheers,
Jacque
“The world is reaching the tipping point beyond which climate change may become irreversible. If this happens, we risk denying present and future generations the right to a healthy and sustainable planet – the whole of humanity stands to lose.” - Kofi Annan, Former Secretary-General of the UN
The S&P 500 has rallied nicely. Look for this rally to continue and extend onto the 4270-4325 resistance area over the next few days. Once this resistance area is cleared the bullish rally can extend toward the 4,500-level area.
Gold has had a great move lately. We are on the way to the $2300 area, but it could be a bumpy ride up to this area, so if we get reactions back to the $1890-$1850 area, do NOT SELL. Just add more small positions.
Bitcoin may be in the early stages of another bull market. Around the $35,000 area is an initial target, with much higher targets long term. Bitcoin is not for the faint-hearted. Expect volatility to be part and parcel of being in the crypto sector.
The US$ is having a small rally before another move down. Buy the Euro, Pound, Aussie, and Yen on this pullback.
Money Myths
Giving up your daily coffee is a financial game changer.
Going through your entire life without some small joys seems a bit extreme. Your budget should have discretionary expenses incorporated. Be disciplined but not too extreme. Housing and transportation change outcomes, but not your cup of coffee.
You don’t need emergency savings.
Yes, you do.
This fund should be a safety net, which should only be used during emergencies. For example, like paying a car payment or mortgage if you’re laid off.
These accounts should not be considered a nest egg or part of a long-term savings plan for a car or a vacation or college tuition.
You must monitor the stock market daily.
No, you don’t need to do that. Unless you are a day trader.
Successful investing is boring. Make goals, set a plan, build a portfolio, and then focus on something else. If you micromanage and focus on the movements of the market daily, you may make moves you will later regret.
Wishing you all a great week and a happy and safe Easter.
On Tuesday Apple will introduce Apple Pay Later, which will allow users to split their purchases into four payments spread over the course of six weeks. Individuals can apply for Apple Pay Later loans between $50 and $1000 and use them for in-app and online purchases made through merchants that accept Apple Pay. Apple said purchases using the software will be authenticated using Face ID, Touch ID or a passcode. Users will be asked to link a debit card as their loan repayment method. Credit cards won’t be accepted.
The incentives to spend leave more and more people living paycheck to paycheck.
So, while 62% of people are waiting for their next pay to fund their weekly shop, more and more people are getting savvy about finding other ways to make ends meet. The “side hustle” has become a necessary add-on to the traditional “job”, which enables people to live without difficulty.
But people are also purging useless services. Many families and individuals are getting rid of subscriptions and memberships and premium movie channels that they may never watch. Can you remember all the subscriptions you have?
Do you have funds sitting in your bank account? Transfer them to a high yielding online savings account to earn a better interest rate. Make sure your bank is not charging monthly maintenance or service fees for overdrafts or insufficient funds. Or you can always put more into your brokerage trading account and be ready to pull the trigger on a great trade.
Dialing down on those impulse purchases.
Are you one of those people who go into a shop and see something and say “I just have to have that item”? Or do you walk past a coffee shop and then turn back, purchase a coffee and something to eat? Or do you see something online and think I have always wanted one of those - and then buy it?
Solution: unsubscribe from all those retail newsletters and notifications, stop going into shops to browse (anyway, who has time to do that?). If you really want/need something, go to the nearest charity shop or second-hand warehouse. You are helping the charity and getting a great deal yourself.
So, in conclusion today, below are the takeaways to live well and avoid the debt cycle and Pay Later promotions.
Hopefully, the drama surrounding regional banks dies down this week and it’s back to looking at the overall market and digesting some facts.
We hear a lot about EVs now and it’s usually all about Tesla. But let’s consider Rivian for a moment.
This year Rivian’s shares have been hitting all-time lows, dipping below $13 per share at some point during March. Its shares are down around 25% year to date. By way of contrast, rival EV maker, Tesla has soared 56% in the same period. So, what gives?
Rivian’s underperformance versus its peers comes after a series of developments this year. Most recently, it said it was in talks with Amazon to adjust an exclusivity clause to produce 100,000 electric trucks for the e-commerce giant. That came as Amazon was underwhelmed with its order numbers.
Rivian shares also plunged after it said it planned to raise $1.3 billion in cash via a sale of convertible bonds.
To ignite its upward trajectory, Morgan Stanley estimates Rivian could spend nearly $6 billion on both operational and capital expenditure this year – which is 1.5 times its full-year 2023 revenues, the bank forecast. Morgan Stanley also highlights Rivian’s aggressive growth rate. Rivian’s spending levels are higher as the company is targeting a much steeper growth rate compared to Tesla’s trajectory in 2015.
Morgan Stanley is giving the stock an overweight rating, and a price target of $26.00 – or nearly 90% upside.
Morgan Stanley’s analysts said Rivian was the only EV start-up name it recommends, apart from Tesla which is also rated overweight.
Chief analyst, Adam Jonas, at Morgan Stanley, says that while the stock offers a rather wide risk/reward skew ($5 bear case to $55 bull case) the firm remains compelled by the company’s differentiated product, scalable end markets, cost-cutting potential, cash balance, and valuation.
Looks like Rivian is a good buy, although the shares may take time to rally. Be patient.
“Trust is the coin of the realm. When trust was in the room, whatever room that was – the family room, the schoolroom, the locker room, the office room, the government room or the military room – good things happened,” said my late friend, US Treasury Secretary George Schultz.
How have you dealt with the volatility in the market over the past week?
Have you been frozen to the spot, did you sell bank shares, did you buy the big banks as John told you to, or did you turn everything off and put headphones on to just zone out?
Poor management doomed Silicon Valley Bank and created a new banking crisis. Taxpayers nervously await the cost of the bailout.
Banks were not the only sector on sale. The Technology sector has been really good value of late as well. But some investors are just too distracted by the ongoing turmoil to see that there are plenty of quality buying opportunities.
Take Apple, for instance. There is the reaccelerating iPhone and Services growth, record gross margins, two new product launches, and the potential introduction of an iPhone subscription program. While the present macro backdrop looks rough, patient investors will be rewarded. Apple shares are up almost 20% since the start of the year.
We have the Fed meeting on March 22. After the recent volatility, the Fed may stand still or raise only .25%. The comments after the announcement also tell an important story as to what we can expect going forward – dovish or hawkish.
Mr Trump is expected to be arrested on Tuesday as a New York grand jury investigates his connection with a hush-money payment to a porn star. If he is indicted, Trump, a 2024 Republican presidential candidate, would become the first former president ever to face criminal charges.
Bitcoin rallies 60% as investors rediscover its appeal as an alternative to the banking system.
Bitcoin’s outperformance amid a crisis in the traditional banking system had some wondering if the price rallied on a potential narrative shift. Though Bitcoin was initially designed to be digital cash and an alternative financial system, it spent much of last year trading like a speculative asset. Last week, it even fell with risk markets and bank stocks amid the uncertainty surrounding Silvergate Bank.
That shifted this past week however, following the closures of Silicon Valley Bank and Signature Bank, giving the appearance that investors were trading it on its core value proposition, the ability to “be your own bank.”
Investors will continue to monitor the banking crisis and the regulatory landscape in the week ahead. Bitcoin’s rally could remain in place if the Fed opts to end its tightening cycle and wait and see what happens next with banking turmoil. It seems that traders are pricing in rate cuts this summer already, so we will see what happens if the Fed opts to remain focused on inflation and deliver another quarter-point rise. A pause and Bitcoin could have the potential to make a run towards the $30,000 level.
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png00Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2023-03-21 11:26:022023-03-21 11:26:56March 21, 2023
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