My Investing Muse

Preview of the week starting 16May2022 Holidays None for the US, China and Hong Kong.   Singapore is closed for the Vesak Day holiday on 16 May 2022. News Summary (from last week) $200B crypto wiped out in 24 hours The Fed needs to prioritize timely and adequate measures to navigate away from inflation and recession . Without this, this could pave the way for China to replace the USA as the leading economy. Traders’ flight from risky investments has halved the price of bitcoin and other cryptocurrencies, wiping out more than $1 trillion worth of digital money since November. $200 billion was wiped off from Crypto Market in 24 hours... Cryptic. The US crossed the "unwanted" milestone of over 1 million Covid related deaths as cases rise in different states. Gas prices in USA - Statista The price of fuel in the U.S. is climbing as markets remain in turmoil following Russia’s military operation in Ukraine. Additionally, the Biden administration’s embargo on Russian oil may be an...

Bitcoin $BTC has been touted as the next hedge or "digital gold".  Traditionally, gold has been the "go-to" asset that holds value over long periods and is used to hedge against market downturns .   Thus, one of the key qualities of a hedge is that of value preservation .  During the market's downturn, a hedge will need to be able to retain or increase its value against market correction or  recession. Extract from investing.com:  Gold historically performs well during market corrections because it maintains its value; its price holds somewhat steady, then tends to rise as investors move from stocks to gold if a recession is threatening. This makes it useful as a hedge—an investment that moves opposite another—against market corrections or recessions. Comparison of BTC, gold and S&P500 index To establish if BTC is a good hedge as "digital gold", it needs to display similar performance and trends like that of gold.  Let us look into the following ch...

D uring a recent interview with Yahoo Finance,   Ray Dalio has shared his concerns that Cryptocurrencies may be outlawed .  Governments would want a monopoly on money and they have concerns that Cryptocurrencies may jeopardise their currencies' role - leading to depreciation & dilution of value.  Mr Dalio has also expressed his preference for gold over Bitcoin (BTC) despite their performance.  However, this does not stop Mr Dalio from owning some cryptocurrencies. The volatility of BTC can render its own downfall, as a medium of exchange.  Of course, the people would not mind when BTC appreciated but it could also post equal downside.  For regular citizens, the drop of value from USD$63,000 to USD$28,000 within 3 months (Apr 2021 to Jul 2021) can lead to much chaos.    On its way to being a successful currency, cryptocurrency will be a threat to the legal currencies , thus, leading to a possible ban.  India and China have respectivel...