UBS sees gold as an attractive geopolitical hedge and portfolio diversifier, rating the metal as most preferred in its investment lessons for the second half of the year report. The bank highlights strong market performance driven by AI investment and recommends diversified portfolios across various assets, regions, and sectors to navigate political and economic uncertainties. […]
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UBS Raises Gold Price Forecast Amid Rising Central Bank Demand and Geopolitical Tensions
UBS has raised its gold price forecast following a record surge in gold prices, driven by anticipated Federal Reserve rate cuts and a weakening U.S. dollar. The main factors behind the investment bank’s upgraded gold price prediction include softer U.S. economic data, increased central bank demand, and ongoing geopolitical uncertainties. UBS Revises Gold Price Prediction […]
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Russia Warns US of Further Aggravation After Funding Bill Passes Amid Heightened Geopolitical Strife
Amid ongoing global tensions, the price of gold remains robust at ,391 per troy ounce, while bitcoin continues to trade at a 12% deficit from its peak value. Recently, the U.S. House of Representatives approved a series of funding bills for Ukraine, Israel, and Taiwan. Following the bill’s passage, Russian Foreign Ministry spokeswoman Maria Zakharova […]
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Circle CEO Says Investors Should Have Exposure to Bitcoin in Complex Geopolitical Environment
Circle CEO Jeremy Allaire says in a complex geopolitical environment, bitcoin is an asset that investors should have some exposure to. He emphasized that “digital commodities are here to stay,” noting that bitcoin is the largest digital commodity asset. The executive also believes that stablecoins will be “explosive in terms of its growth in the coming years.”
‘Digital Commodities Are Here to Stay’
The CEO of crypto firm Circle, Jeremy Allaire, shared his bitcoin outlook in an interview with CNBC earlier this week. “Digital commodities are here to stay,” the executive began, emphasizing that “Bitcoin is the largest digital commodity asset.” He opined:
In a complex geopolitical environment, a complex macroeconomic environment, this is an asset that you should have some exposure to.
Allaire explained that many people who invest in bitcoin believe that the cryptocurrency “is a risk hedge asset.” He added that BTC “can be correlated to the availability of money supply but also can be uncorrelated,” noting that “It doesn’t fit every box, clearly.”
The Circle executive also provided his outlook for stablecoins. Circle is the issuer of U.S. dollar-based stablecoin USDC. Allaire stated that dollar-based stablecoins can be a strong store of value and a medium of exchange that has all the power of the internet. Noting that stablecoins are a huge innovation, he opined: “I expect it to be explosive in terms of its growth in the coming years.”
Many others believe that bitcoin is a risk hedge asset. Venture capitalist Tim Draper previously explained that he is bullish about bitcoin because “it’s a great hedge against inflation.” Famed hedge fund manager Paul Tudor Jones has said several times that bitcoin is his preferred inflation hedge over gold.
Blackrock CEO Larry Fink detailed in July that bitcoin can hedge against inflation and “the onerous problems of any one country, or the devaluation of your currency, whatever country you are in.” Blackrock, the world’s largest asset manager, is currently seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch a spot bitcoin exchange-traded fund (ETF).
What do you think about the statements by Circle CEO Jeremy Allaire? Let us know in the comments section below.
Billionaire Paul Tudor Jones Sees ‘Most Threatening’ Geopolitical Environment — Warns of China, Russia, Iran
Billionaire investor Paul Tudor Jones has warned of the effects of the geopolitical uncertainty around four nuclear powers, including China, Russia, and Iran. “It might be the most threatening and challenging geopolitical environment that I’ve ever seen,” Jones stressed. “It is also happening at the same time the United States is in its weakest fiscal position since World War II.”
‘Most Threatening and Challenging Geopolitical Environment That I’ve Ever Seen’
Billionaire hedge fund manager Paul Tudor Jones, founder and chief investment officer of Tudor Investment Corp., discussed the impact of global geopolitical conflicts on markets in an interview with CNBC Tuesday.
Commenting on the war between Israel and Hamas, he said what is happening in Israel is “a huge tragedy.” However, Jones stressed: “You have to put it in a larger geopolitical context.” The billionaire explained: “We now have possibly three theaters where we’re going to have geopolitical challenges. We’ve got the Middle East and Israel, obviously the Ukraine and Russia, and then at some point down the road Taiwan and China.”
The Tudor Investment founder added:
It might be the most threatening and challenging geopolitical environment that I’ve ever seen.
“Because you have four nuclear powers, three of whom are led by sociopaths, and that would be China, Russia, and North Korea. Obviously, those leaders have zero accountability, or responsibility, to anyone but themselves. And they have not an ounce of humanity in their bones because they regularly disappear both their friends and enemies,” he described.
Jones continued: “And then the fourth, Iran, is led by someone who thinks God is talking to him and has avowedly said that they want to remove from this earth a nation-state with probably the most brilliant people ever assembled within a national boundary.” Regarding the conflict between Israel and Hamas, Jones cautioned:
Where this really gets bad is obviously if Iran and Israel get in direct conflict. That’s when it really gets bad because then you’ve got the ability to have kind of a First World War cascade when everyone gets involved.
Noting that “It’s a really challenging environment” and “a very threatening time,” Jones pointed out:
That is also happening at the same time the United States is probably in its weakest fiscal position since, certainly, World War II with debt-to-GDP at 122%. So, it’s a really tough time.
Jones was also asked whether his stance on bitcoin has changed. “I like bitcoin and I like gold right here,” the billionaire hedge fund manager affirmed, adding: “They probably take on a larger percentage of your portfolio than historically they would because we’re going to go through both a challenging political time here in the United States and … We’ve obviously got a geopolitical situation.” Moreover, he noted: “It’s a really challenging time to want to be an equity investor in U.S. stocks right now … because again you’ve got the geopolitical uncertainty.”
Do you share the same concerns with renowned hedge fund manager Paul Tudor Jones? Let us know in the comments section below.
Economist Jim Rickards Predicts Unveiling of New BRICS Currency — Says ‘the World Is Unprepared for This Geopolitical Shock Wave’
Jim Rickards, an economist and the author of “Currency Wars,” has predicted the unveiling of a new BRICS currency, stating that it “could weaken the role of the dollar in global payments and ultimately displace the U.S. dollar as the leading payment currency and reserve currency.” Emphasizing that “The process by which this will happen is unprecedented, and the world is unprepared for this geopolitical shock wave,” he noted that “The BRICS+ present a realistic effort to de-dollarize global payments and eventually global reserves.”
Jim Rickards on BRICS Currency Challenging U.S. Dollar Dominance
Economist and “Currency Wars” author Jim Rickards shared his predictions about a proposed BRICS currency in an opinion piece published by the Daily Reckoning earlier this week. The leaders of the BRICS nations (Brazil, Russia, India, China, and South Africa) are expected to discuss the proposed common currency at their next leaders’ summit in August.
“On Aug. 22, about 2½ months from today, the most significant development in international finance since 1971 will be unveiled,” Rickards wrote, elaborating:
It involves the rollout of a major new currency that could weaken the role of the dollar in global payments and ultimately displace the U.S. dollar as the leading payment currency and reserve currency. It could happen in just a few years.
“The process by which this will happen is unprecedented, and the world is unprepared for this geopolitical shock wave,” he opined.
Rickards explained that there are currently eight nations that have formally applied to join the economic bloc and 17 others have expressed interest in joining. The eight are Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates, he detailed, adding that the 17 countries are Afghanistan, Bangladesh, Belarus, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Senegal, Sudan, Syria, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe.
In April, Anil Sooklal, South Africa’s ambassador to the BRICS economic group, revealed that 19 countries have either applied to join or have expressed interest in joining. “We are getting applications to join every day,” he stated at the time.
“By every measure — population, landmass, energy output, GDP, food output and nuclear weapons — BRICS is not just another multilateral debating society. They are a substantial and credible alternative to Western hegemony. BRICS acting together is one pole of a new multipolar or even bipolar world,” Rickards stressed.
De-Dollarization of Global Payments and Global Reserves
The economist then discussed the global de-dollarization trend, as a growing number of countries shift away from using the U.S. dollar in trade settlements in favor of national currencies. “What’s behind this quest to ditch the dollar? In no small part the answer is U.S. weaponization of the dollar through the use of sanctions,” the Currency Wars author described.
“Many other nations began to conclude that they could be next if they run afoul of the U.S. on certain issues. And that fear has greatly accelerated the push to opt out of the dollar system entirely,” he continued, adding:
The BRICS+ present a realistic effort to de-dollarize global payments and eventually global reserves.
Rickards noted that efforts to shift to using national currencies “may soon be superseded by a new BRICS+ currency, which will be announced in Durban, South Africa, at the annual BRICS leaders’ summit Conference on Aug. 22–24.”
Believing that the new BRICS currency “will be pegged to a basket of commodities for use in trade among members,” Rickards predicted: “Initially, the BRICS+ commodity basket would include oil, wheat, copper, and other essential goods traded globally in specified quantities.”
He further explained: “In all likelihood, the new BRICS+ currency would not be available in the form of paper notes for use in everyday transactions. It would be a digital currency on a permissioned ledger maintained by a new BRICS+ financial institution with encrypted message traffic to record payments due or owing by participating parties.” He clarified that this new currency will not be a cryptocurrency “because it is not decentralized, not maintained on a blockchain, and not open to all parties without approval.”
The economist concluded:
Based on the impracticality of commodity baskets as uniform stores of value, it appears likely that the new BRICS+ currency will be linked to a weight of gold.
“This plays to the strengths of BRICS members Russia and China, who are the two largest gold producers in the world and are ranked sixth and seventh respectively among the 100 nations with gold reserves,” he stressed.
While Rickards anticipates the unveiling of the new BRICS currency at the forthcoming leaders’ summit of the economic bloc, there is widespread skepticism regarding the feasibility of such a currency. This skepticism extends to individuals like Lord Jim O’Neill, the British economist credited with coining the acronym BRIC.
What do you think about the predictions regarding a new BRICS currency by economist Jim Rickards? Let us know in the comments section below.
Indonesia Introducing New National Payment System to Protect Against ‘Geopolitical Consequences’
Indonesia is introducing a new national payment system as the country furthers its de-dollarization efforts and protection against “possible geopolitical consequences.” The new payment system will replace Visa and Mastercard in state-owned institutions and companies, a top central bank official said. “We expect that very soon it will become widespread.”
Indonesia Establishes New National Payment System
Indonesia will introduce a new national payment system that will replace Visa and Mastercard in state-owned institutions and companies, according to Dicky Kartikoyono, Bank Indonesia’s Head of Strategic Management and Governance Department. The central bank official was quoted by CNBC as saying Monday:
In accordance with the president’s plan, the transition to our national payment system is proceeding smoothly. We expect that very soon it will become widespread, including within state-owned enterprises.
The central banker explained that Indonesia’s decision to create its own payment system is “very timely,” emphasizing that Southeast Asian countries should establish “a safety cushion that will protect businesses and ordinary citizens” from increasing financial uncertainty in the West.
In March, Indonesian President Joko Widodo urged regional authorities to use credit cards developed by local banks instead of global financial conglomerates as a measure to shield transactions against any “possible geopolitical consequences.”
Dodit Proboyakti, a board member of the Indonesian Credit Cards Association, told Sputnik publication that Indonesia will apply what it learns from Russia’s experiences with its Mir payment system to its own payment system. The Russian government-backed Mir payment system gained much popularity after Western nations imposed heavy sanctions on Russia in response to its invasion of Ukraine.
Bank Indonesia Governor Perry Warjiyo recently said that Indonesia is following the BRICS economic bloc’s de-dollarization lead by diversifying its currency usage through the implementation of the local currency system. He noted that Indonesia has also made agreements with several nations to use local currencies in trade, including Thailand, Malaysia, China, and Japan.
Besides Indonesia, nine other Southeast Asian countries (Brunei, Cambodia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) recently agreed to “encourage the use of local currencies for economic and financial transactions.” The 10 countries are members of the Association of Southeast Asian Nations (ASEAN).
Meanwhile, the BRICS leaders plan to discuss a common currency at their upcoming leaders’ summit. The BRICS nations comprise Brazil, Russia, India, China, and South Africa. Many people believe that a BRICS currency will erode the U.S. dollar’s dominance.
What do you think about Indonesia setting up a national payment system to reduce the country’s reliance on Western countries? Let us know in the comments section below.
Bitcoin Continues To Slide As Macroeconomic And Geopolitical Anxiety Persist
Bitcoin sank to an intraday low of ,714.69 on Friday, following a late surge above Wednesday’s critical resistance level of ,500. BTC was down as traders braced themselves for the lengthy Easter weekend.
Bitcoin – the world’s most sought-after digital asset – has fallen about ,000 from a two-week high of ,220, its highest level in over four months.
However, following weeks of retreats, it looks as though market analysts have identified a stable floor at ,300, with bulls now attempting to drive prices higher once more.
Related Article | Bitcoin Price Plummets Below ,000 As Crypto Market Tallies 0 Million In Liquidations
Bitcoin Feeling The Pressure
Concerns about macroeconomic and geopolitical concerns have lingered, keeping some investors away.
Russian President Vladimir Putin stated during a news conference on Thursday that peace talks with Ukraine have reached a stalemate.
Putin further vowed that Russia’s “military operation” will continue indefinitely.
On a technical level, Bitcoin’s 200-day moving average significantly stymied the recent bull run, resulting in a large price fall.
Bears currently control the market, and the price is rapidly declining, resulting in a break below the 50-day and 100-day moving averages.
The K and K demand zones represent the next levels of Bitcoin support. If the price holds the short-term significant support level around K, it may resume its climb toward the significant resistance level at K.
BTC total market cap at 2.41 billion on the daily chart | Source: TradingView.com
BTC Could Touch K
If this level is not maintained, Bitcoin’s next stop could be the K important demand zone.
Bitcoin has lost more than 15% in the last week, prompting one indicator to declare that the market has entered a time of “severe anxiety.”
The price decline occurs in the context of a broader downturn in global financial markets, prompted by geopolitical crises and uncertainty over the prospect of the US Federal Reserve tightening monetary policy.
Related Article | Price Of Bitcoin Retreats Under ,000 As Enthusiasm From Miami Event Fizzles
Future Still Looks Bright
Despite the current dismal performance of Bitcoin, a prominent trader believes that the cryptocurrency’s price might potentially double in the next two years.
Peter Brandt made a prediction in response to a tweet from Tuur Demeester, a long-time Bitcoin supporter.
According to the latter, following extended periods of consolidation, Bitcoin tends to erupt “like nothing else on this earth.”
According to Brandt’s forecasts, Bitcoin may either double in value in two years or continue its streak of sideways trading for an extended length of time.
A seasoned trader previously predicted that Bitcoin’s next “rocket stage” will begin in 2024, based on how prior market cycles have unfolded.
Featured image from DataDriveInvestor, chart from TradingView.com
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War, Inflation, & Geopolitical Tensions Bring Gold-Backed Crypto Tokens To $1B
In the first few months of 2022 macro uncertainty has been felt in the crypto and traditional markets as economic, regulatory, and political scenarios unfold.
Historically, investors see gold as a reliable safe-haven asset they can run to when stocks and bonds decline. It is not surprising for gold prices to have seen a 19-month high as the U.S. and UK decided to ban Russian energy products. It seems that now investors are not only attracted to the metal, but to gold-backed tokens as well.
What Crypto Can Expect From Macro Uncertainty
The macro uncertainty has only increased in 2022, starting with Russia’s invasion of Ukraine, then escalating as the sanctions on Moscow have a direct effect on commodities prices. Moreover, analysts expect that a rising U.S. inflation will be reflected in the CPI numbers to be published next Thursday.
Arcane Research data noted that CPI is expected to reach 7.9%, and the Federal Reserve might perform the 25 basis point rate hike that chair Jerome Powell said he is inclined to support.
Bloomberg experts, however, project for “February CPI to show an increase of 8.0% year over year and top out in the vicinity of 9% in March or April,” and added that “CPI could rise above 10%” if energy prices continue to rise.
The Fed has also said that they might move more aggressively later on if inflation does not come down. If the market’s expectations on the rate hike do not meet reality, crypto prices could see increased volatility.
As Arcane Research pointed out, the implications of the Russo-Ukrainian war on the surging commodity prices might turn into a hurdle race for central banks trying to bring inflation down.
Related Reading | Gold-Backed Tokens Outperform Crypto Market. Further Upside Coming?
60% Growth For Gold-Backed Tokens
Furthermore, Arcane Research reported massive growth for gold-backed tokens in 2022. The macro uncertainty has led the gold price to rally with an 11% surge in the year as investors look for safety in a hedge against the expected risks.
The gold price rally could be calling the investors’ attention towards the top gold-backed tokens. Their market capitalization recently surpassed billion, a 60% growth in 2022.
As per Investopedia, “Gold-backed digital currencies link one token or coin to a specific quantity of gold (for instance, 1 token equals 1 gram of gold),” and “If the digital currency becomes popular, the price of the coin can actually exceed that value. In this way, gold-pegged digital currencies offer protection against the bottom dropping out of a digital currency’s value.”
The top gold-backed tokens to consider are PAX Gold and Tether Gold. Indicated in the chart below, Tether Gold has seen little growth during the year, and as a consequence, PAX Gold overtook its position in the market cap after it saw a high influx in February.
Source: Arcane Research’s The Weekly Update, Week 9
However, the share of gold-backed tokens in the total crypto market is still around 0.05%, a tiny size compared to the top cryptocurrencies.
What About Bitcoin?
The report also notes that “Bitcoin has underperformed in this uncertain macroclimate, but many investors still view it as an inflation hedge.” Bitcoin price is up 8.93% in the last 24 hours after President Joe Biden announced the executive order on digital assets, which took a benefitial position for the crypto industry.
Related Reading | Battle Of The Hedges: How Gold And Bitcoin Have Performed With Russia-Ukraine Conflict
Bitcoin rallying at ,923 in the daily chart | Source: BTCUSD on TradingView.com
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Bitcoin Prices Dragged Down By Geopolitical Tensions, Ukraine Nuke Plant Fire
Bitcoin prices plummeted on Thursday as global geopolitical tensions escalated to unprecedented levels.
On Thursday, there was no agreement reached to end the war during the second round of negotiations between Russian and Ukrainian officials.
In response to the impasse, markets were jittery, which pushed prices of conventional safe-haven assets up such as gold and the US dollar.
Before the Russian invasion, Bitcoin moved in a manner comparable to that of other risky assets such as technology stocks.
Related Article | Criminal Whales Hold Billion In Crypto Assets: Chainalysis Report
Investors anticipate that the United States Federal Reserve will begin raising interest rates in response to rising inflation in the near future.
Money is being transferred from riskier assets like bitcoin to stocks of banks and other corporations that perform well when interest rates increase.
Bitcoin Prices Vulnerability, Investor Worry
A change in the landscape has made Bitcoin vulnerable to stock market volatility in the US.
As a result, the current geopolitical climate will worry Bitcoin investors. They will remain restless until the situation between Russia and Ukraine is resolved.
Because of the present circumstances, Bitcoin is already down 10% for the year and roughly 38% from its all-time high achieved in November 2021.
As long as tensions between Russia and Ukraine continue to worsen, cryptocurrency miners should keep their fingers crossed for the sake of their safety.
BTC total market cap at 7.22 billion in the daily chart | Source: TradingView.com
Related Article | Bitcoin Staggers After Putin’s Nuclear Deterrence Alert Warning
Swapping Rubles For Bitcoin
Russians are swapping their depreciating rubles for bitcoin to lessen the impact of international economic sanctions imposed in response to their country’s attack on Ukraine.
Because of the government’s restrictions on residents’ capacity to conduct electronic cash transfers, Ukrainians increasingly resort to bitcoin and other stablecoins backed by the US dollar.
Volatility and inflation triggered by the Russian invasion have led Bitcoin’s value to fall 4.82% in the last 24 hours, with a low of ,104.75 and a high of ,079.23, which is lower than in previous weeks.
Both Ethereum (ETH) and Cardano (ADA) saw a price reduction as a result of Bitcoin’s decline.
The current price of Ethereum is ,722.38; it has decreased by 6.39% in the previous 24 hours, with lows of ,692.05 and highs of ,934.50. Cardano’s price is now .874909, down 5.36% from the last day.
Potential Nuclear Disaster
Meanwhile, it was reported early Friday morning that Enerhodar, Ukraine’s largest nuclear power station, was on fire after being bombed by Russian soldiers, raising fears of a nuclear calamity.
The news created panic from the crypto sector, with some investors rushing to dispose of their crypto holdings and seek other safe haven alternatives.
According to a spokesperson for the facility, Russian artillery fire directly targeted the Zaporizhzhia nuclear power plant, and one of the facility’s six reactors caught fire.
The nuclear plant official said despite the fact that the reactor has been deactivated, there is still nuclear fuel inside, and anything can happen.
Featured image from Cryptopolitan, chart from TradingView.com
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