Crypto Markets continue to pump! Are Bonds primed for a comeback in 2024?
IBM reveals cold storage solution for digital assets!
šDear Valued Subscribers,
Welcome to another exciting week filled with compelling topics and investment insights. In this newsletter, we're delving into key areas that have been making waves in various markets. Here's a sneak peek into the topics we'll be exploring:
Crypto Market Continues To Pump: Is The Bull Market On?Ā
IBM's Reveals Cold Storage Solution For Digital Assets!
What You Need To Know About This Week's Economic ReportsĀ
Bright Future for Bonds: A Simple Breakdown!
So folks, strap in as we have a lot to cover as we dive into the materials for this week's newsletter!Ā
Crypto Market Continues Its Climb: What Next?
Bitcoin Psychology:Ā
Itās been over a FULL year since Bitcoin put in its bear market low of $15,500 on the news of FTX going under. When FTX went under I remember the news cycle for Bitcoin and Crypto was overwhelmingly negative. Ironic as it may seem, Bitcoin has formed a massive uptrend since the FTX scandal, and has climbed a total of 188% from the bottom in just over one year.Ā
Bitcoins price movement since the FTX scandal back in November of 2022
The reason I bring this up is to make a point about the psychology of markets. Time and time again, the āscariestā time to buy has been the best time to buy. What I mean by this is that when retail investors are panic selling, smart money usually tends to be buying. Thus, when retail was panic selling Bitcoin after the FTX scandal it fell all the way down to $15,000/coin.
I canāt confirm whether institutions were buying then, however, Bitcoin has only gone up from that very moment of retail panic selling...Ā
Is It A Good Time To Buy Now?
If buying when everyone is scared or selling is normally the best time to buy crypto, then now might be a less than ideal time to invest a large sum of money into Bitcoin as everyone is extremely excited and euphoric.Ā
While this may be discouraging to those who havenāt invested yet, itās important to note that this DOES NOT mean that you wonāt have a chance, however, you might just have to be a little bit patient. What I can tell you is that Bitcoin has climbed 188% with very few corrections (price pullbacks). In its most recent climb, it has pumped 88% without receiving a pullback:Ā
Thus, unless you are (dollar cost averaging) on a recurring basis regardless of the price. Timing any market is difficult, especially the crypto markets so DCAing is always a good strategy. We may see another pullback in the coming weeks-months as we lead up to the ETF approvals and the halving but its tough to tell as markets may keep trending upwards.
š IBM's Reveals Cold Storage Solution For Digital Assets!
Aside from the price action in crypto, there is more big news for this sector as IBM has doubled down on its involvement in the blockchain and crypto space. This week IBM rolled out their solution for keeping your digital assets super safe. Let's keep it simple:
What's the Deal?
IBM and Metaco, as well as some top banks have joined forces to introduce IBM Hyper Protect Offline Signing Orchestrator (OSO).Ā
You might be asking yourself āwhat in the world is thatā¦ā but Iām here to tell you that It's essentially just a super-secure vault for your digital assets.
How It Works:
OSO uses a smart engine to handle communication between apps without exposing your assets to the internet. It's like having a digital bouncer ā only the invited ones get in.
In a nutshell, IBM just gave a big boost to keeping your crypto safe and sound. It's like getting VIP security for your digital fortune! ššš°
Why It's Exciting:
No More āOopsā Moments: OSO removes human errors when handling transactions. It's like a digital safe that opens up only when it's time for blockchain transactions ā no accidental slip-ups!
Guarding Against Bad Stuff: Worried about cyber bad guys? OSO has your back. It stops common insider attacks, whether it's someone sneaking in physically or trying to hack from afar.
Extra Security Layer: OSO goes the extra mile by putting your digital assets in a super-secure vault with no internet connection. No internet means no sneaky online attacks.
What You Need To Know About This Week's Economic ReportsĀ
On December 5th, we received two key economic reports, and when analyzed properly, they can tell us a lot about the current state of our economy. Letās now look at these two reports and see what it tells us about the current state of the US economy!
Report 1: Job Openings and Labor Turnover Survey (JOLTS)Ā
The JOLTS report acts as a great economic indicator, as when job openings are up, this can act as a great indicator that there is upwards pressure on inflation. An increase in Job openings often indicates a tightening labor market where employers may have to offer higher wages, since there are less people interested in working. This may ultimately lead to higher prices for consumers, as employers have to account for higher wages in the products.Ā
The JOLTS report that was released on December 5th was pretty positive, as job openings dropped to their lowest in 2.5 years, showing that the job market is cooling down.Ā
Remember, an increase of Job openings is often a sign of upwards pressure in inflation, therefore a decrease in job openings suggests that inflation may be trending in the right direction for consumers.Ā
Report 2: ISM Services PMI (Purchasing Managersā Index)Ā
The ISM Services PMI report is another great economic indicator to follow, as it shows the growth in KEY economic sectors. Without getting too technical, a number on this report above 50% generally means that the economy is growing.Ā
This report, like the JOLTS, also came back positive. Analysts predicted 52.4%, and the report came in at 52.7%, beating estimates.Ā
What these 2 Reports Mean For Current Interest Rates:Ā
If the JOLTS shows us that inflation is under control, and slowly going away, and the ISM Services PMI report shows economic growth, the economy seems to be in a stable place temporarily. This shows us that the economy is doing well at the current interest rates, therefore, the FED has no reason to cut rates at the current levelā¦ right?!
šš Bright Future for Bonds: A Simple Breakdown!
As you can see on the chart above, there is currently a great divergence between bond performance, and US equities. Let's dive into why Bonds may be gearing up for a stellar run in 2024-25:Ā
Slower Economic Growth:
When the economy takes it slow, investors often seek safety in bonds.
Bonds provide stable returns, making them a go-to during economic chill.
Easing Inflation:
Inflation cooling off is a win for bonds.
Bonds offer fixed interest rates, shielding investors from purchasing power erosion during low inflation periods.
Central Banks and Reverse Rate Hikes:
If central banks decide to hit the brakes on interest rate hikes, it's a green light for bonds.
Lower rates make existing bonds more attractive, driving demand.
So, in a nutshell, Bonds are shining bright with a cocktail of slower growth, tamed inflation, and a central bank-friendly environment. A solid choice for those seeking stability in the financial landscape! š¹š
My favorite BOND pick for 2024 is BNDI. You can check it out at www.neosfunds.com