The Federal Reserve Board’s annual stress test results reveal that large banks are expected to face nearly 5 billion in projected losses during a severe recession scenario. These losses are significantly higher than last year due to increased risks in bank balance sheets and higher expenses. The aggregate common equity tier 1 (CET1) capital ratio […]
Bitcoin News
Bank of Canada Governor Warns of ‘Sharp Correction’ Risks in Markets and ‘System-Wide Stress’
In his speech on the release of the Financial Stability Report, Tiff Macklem, Governor of the Bank of Canada, sought to emphasize the purported strength of Canada’s financial system while cautioning against ongoing risks that could precipitate a “sharp correction” in markets, potentially leading to widespread financial strain. “Some indicators of financial stress have risen,” […]
Bitcoin News
Argentine Foreign Minister Says a Latin American Common Currency Would Relieve Argentina’s Stress on the Dollar Issue
Argentine Foreign Minister Santiago Cafiero referred to the advantages the issuance of a Latin American common currency would give Argentina. Cafiero stated that the existence of such a currency would relieve the stress that the country is currently facing regarding the state of its foreign reserves and the devaluation of its fiat currency.
Argentine Foreign Minister Talks Latin American Common Currency
Santiago Cafiero, foreign minister of Argentina, talked about the benefits that the existence of a common currency for countries in Latam would bring to the region and his country. Cafiero explained that, while several proposals were brought to the four-hour meeting between Brazilian President Luiz Inacio ‘Lula’ da Silva and his Argentine counterpart Alberto Fernandez, the issuance of a common Latin American currency was not touched upon.
However, Cafiero showed his support for the creation of such a currency, stating:
It would be very good to have a common currency because it would avoid all the stress that Argentina has with the issue of dollars.
Argentina has been battling a reduction of its foreign reserves in dollars, which have to be used to pay for imports due to the current structure of international trade. This has led the Argentine government to try to substitute the use of dollars for the Chinese yuan in its bilateral settlements with China, to preserve its dwindling reserves.
Origins of the Common Currency Proposal in the Region
The proposal of a common currency for the region was part of the presidential campaign of now-Brazilian President Lula, who stated that Brazil would use this currency to connect again with other countries in Latin America, to undermine the ubiquitous use of the dollar.
The initial reports pointed at this project being similar to the euro, a substitute for the fiat currencies of several countries of the region, with Argentina and Brazil being the first proponents of the idea.
The proposal was later discussed by the governments of Argentina and Brazil at the CELAC commitment in Buenos Aires in January, where the two governments signed a document to start working on the creation of this common currency, clarifying that its usage would be limited to settlements between countries of the Common Southern Market and the BRICS bloc, which is also studying to issue its own common currency.
What do you think about the advantages that a Latin American common currency could give Argentina? Tell us in the comments section below.
Goldman Sachs Now Expects No Rate Hike in March Due to Stress in US Banking System
Goldman Sachs has revised its U.S. interest rate forecast due to “stress in the banking system.” The global investment bank no longer expects the Federal Reserve to raise interest rates at its Federal Open Market Committee (FOMC) meeting in March after the central bank announced measures to rescue depositors of failed Silicon Valley Bank and Signature Bank.
Goldman Sachs Revises Rate Hike Forecast
Global investment bank Goldman Sachs has revised its interest rate hike prediction for the upcoming Federal Open Market Committee (FOMC) meeting in March. In a note to clients on Sunday, the bank’s economists, led by its chief economist Jan Hatzius, detailed:
In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22.
Last month, the FOMC increased the federal funds rate by 25 basis points to a target range of 4.5% to 4.75%, the highest since October 2007.
Goldman revised its forecast shortly after the Treasury Department, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) announced rescue measures for depositors of two failed banks. Regulators shut down Silicon Valley Bank on Friday and Signature Bank on Sunday. In addition, the Federal Reserve Board said Sunday that additional funding will be made available to eligible depository institutions.
Commenting on the Treasury Department’s decision to designate failed Silicon Valley Bank and Signature Bank as systemic risks and the Federal Reserve’s establishment of a new Bank Term Funding Program to support institutions affected by subsequent market instability, the Goldman Sachs economists explained:
Both of these steps are likely to increase confidence among depositors, though they stop short of an FDIC guarantee of uninsured accounts as was implemented in 2008.
The economists further noted that they still expect the Fed to raise interest rates by 25 basis points in May, June, and July, with a terminal rate expectation of 5.25% to 5.5%.
Do you think the Fed will raise interest rates at its March meeting next week? Let us know in the comments section below.
Bitcoin Long-Term Holders Face Major Financial Stress
The Bitcoin and crypto market is still wallowing in turmoil from the collapse of the FTX exchange. Many crypto assets have followed a correlation with the decline of FTX Token, FTT. As a result, the past few days brought an intense bearish pull on the prices of virtual assets.
With the recent events’ outplay, the crypto market’s overall performance shows doubts and fear. As a result, investors and other participants have initiated a panic sell-off for most crypto assets.
Hence, the cumulative market cap has been experiencing a free fall since last week. The overall market cap sits at 4.19 billion at the press time, showing a drop of 1.92% over the past day.
Also, the bearing trend triggered by the FTX crisis has brought the global primary cryptocurrency down. Bitcoin has maintained a low correlation in the crypto market, creating more tension for its long-term holders.
BTC Price Drop Creates Selling Pressure
From the recent reports, BTC long-term holders are facing intense selling pressure due to the declining market situation. The price of Bitcoin has been falling since last week with no restrictions.
At the time of writing, BTC is trading at ,666 indicating an increase over the past 24 hours and its dominance over altcoins is 38.49%.
A report from Glassnode, an on-chain data provider, highlighted the MVRV ratio of Bitcoin’s long-term holders. The firm noted that BTC long-term holders are currently facing acute financial stress. They are holding an average of -33% in unrealized losses.
According to the firm, such a value is close to the lows of the 2018 bear market, where the peak unrealized loss was – 36% on average.
The data provider noted that the last time BTC long-term holders had a similar stress experience was at the token’s price reversal point. This means that Bitcoin’s bottom could be around the corner.
Bitcoin Selling Pressure Yet To Get Worst?
However, Peter Shiff, a BTC critic, thinks the worst Bitcoin selling pressure is yet to come. Sharing his older prediction from June 2022, Shiff stated that selling pressure on Bitcoin for bill payments would only worsen once the recession deepens.
Also, that could happen if several holders lose their jobs, primarily workers in blockchain firms that would become bankrupt. So unfavorable changes for such holders will lead to more Bitcoin sell-off.
Following the collapse of FTX, many Bitcoin investors have transferred their holdings from exchanges. They now refer to using self-custody for their holdings. This has created massive historic withdrawals from crypto exchanges.
According to the report from Glassnode, exchanges have witnessed one of the most significant cumulative drops in Bitcoin balance. The platforms recorded a decline of 72.9K in seven days.
The data provider mentioned that the situation is comparable to three historical periods with such a vast BTC movement. They were in April 2020, November 2020, and June-July 2022.
Featured image from Pixabay, chart from TradingView.com
NewsBTC
More Stress For El Salvador As Bitcoin Dips To $29,000
El Salvador has been on the radar of leading financial and economic institutions since it made Bitcoin a legal tender. It has mainly become a spectacle as cryptocurrency supporters and non-supporters alike watch on to see how this plays out. El Salvador which had made good on its bitcoin promise had made multiple BTC purchases at close to the height of the market last year and some this year.
The country now holds at least 2,300 BTC since it made its first purchase in September of 2021. Now that the price of Bitcoin is down significantly since the country had begun buying, how is this playing out for the North American country?
El Salvador And Its Bitcoin
El Salvador had bought another 500 BTC in May after the market had declined to .68 trillion. These bitcoins which were purchased at an average price of ,774 had brought the country’s holdings to 2,301 BTC so far. It would be the lowest price that the country had been able to purchase the digital asset and given that this purchase was only a small part of its larger holdings, the country still remains in loss from its multiple purchases.
Related Reading | Funding Rates Fall To Yearly Lows Following Bitcoin’s Fall Below ,000
The first time El Salvador had bought some BTC in September, it had been trading above ,000. What this means is that the digital asset is down about 45% since then. Its entire stash is now worth about million at present prices. So even with the dollar cost averaging method that has seen the country buy BTC at different prices, it is still down 28% from its total purchase value.
BTC falls to ,000 | Source: BTCUSD on TradingView.com
The move to accept BTC has not only proved controversial on just the bitcoin price side, but it has also affected the country’s ability to receive international aid in the form of loans.
Last year, it was made public that the country had been looking to secure .3 billion from the IMF. However, this does not seem likely to happen given that the IMF has expressed its disdain for the adoption of bitcoin as a legal tender.
It has advised the country to remove the digital asset as an official national currency, citing that this could cause problems for the economy in the long-term, revealing that the current account deficit for El Salvador’s remittance and the external financing-reliant economy is estimated to drift around billion for the next three years. But President Nayib Bukele has turned a deaf ear to this.
Related Reading | Crypto Carnage Causes Flight To Bitcoin Safe Haven, Dominance Demonstrates
El Salvador is a country that is heavily reliant on remittances from citizens abroad who send money home to loved ones. For this reason, the president has said that BTC will greatly help make these remittances easier and cheaper for its residents.
On the price side, the president is not much bothered by the recent decline either. He has said in the past that he expects the price of the digital asset to reach 0,000 sometime in 2022. If this happens, then the country will be in significant profit from its BTC holdings.
Featured image from Coingape, chart from TradingView.com
Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…
Fewer Logins, Fewer Tokens, Less Stress Ecosystem to Support DApps From All Blockchains
n Tired of managing multiple tokens and logins for your favorite DApps A new blockchain ecosystem is vowing to bring the best tools under one roof SPONSOREDn
CryptScout #BitFeed RSS – Bitcoin and Cryptocurrency News 24/7
Bitcoin’s True Stress Test Is Yet to Come
What happens if there’s another 2008-scale financial market crisis Will diehard HODLers still resist liquidating their bitcoin assets
CryptScout #BitFeed RSS – Bitcoin and Cryptocurrency News 24/7
Bitcoin Cash Stress Test Results 2.1 Million Transactions Cause No Surge in Fees
n Yesterdays BCH Stress Test Day saw over 2.1 million BCH transactions, with the number of transactions reportedly reaching up to 25,783 per blockn
CryptScout #BitFeed RSS – Bitcoin and Cryptocurrency News 24/7
Cryptocurrency Market Update: Bitcoin Cash Boosted on Stress Test Day
FOMO Moments
Sunday seeing further gains; Bitcoin Cash, Neo and Verge all performing solidly.
That green feeling has continued over the weekend in crypto land as the recovery gains momentum. Market capitalization has climbed a little again pushing it over 5 billion, its highest level for over three weeks.
Bitcoin keeps climbing, albeit very slowly, it has made 2.3% on the day to trade at ,230. The next resistance level for BTC is ,350 which it could reach soon if momentum is maintained. Ethereum has finally made a little progress inching ever closer to 0. ETH is up 3.6% on the day and currently trading at 7.
Altcoins are mostly in the green with a couple really standing out at the moment. The top ten shows Bitcoin Cash streaking away with the lead and a 17% gain on the day to 7. BCH was one of the worst performing cryptos in August dropping 30% over the month. The community is currently conducting a stress test on the network which will determine transaction speed and stability, and this is likely to have affected trade volume which has over doubled.
The Biggest Community Driven Stress Test Of Any Blockchain
So far $BCH has processed 1,265,876 transactions in the past 24 hrs
BMG Pool just mined a 10 MB / 44,705 transaction blockhttps://t.co/G135pUEmUHhttps://t.co/CLYp8rjbJdhttps://t.co/V5ver1Eaa6https://t.co/U1nlqzntSp pic.twitter.com/6Y2hND3YNg
— Bitcoin Cash (@BITCOlNCASH) September 1, 2018
Litecoin is up another 4% to but the rest are just 2-3 percent higher on the day. Leading the top twenty is another of last month’s big losers, Neo, which is up 9% on the day to . Good gains have also been made by Dash and Tezos, climbing 5-6 percent at the moment. Verge is leading the top one hundred race with a 22% pump to .019 at the moment. An update to the XVG roadmap seems to have driven momentum;
We have adjusted our #roadmap to reflect the most current status levels. https://t.co/28lN1yHvoJ #Vergecurrency #XVG $XVG
— vergecurrency (@vergecurrency) August 31, 2018
After yesterday’s pump, Reddcoin is losing the most right now with a 6.5% decline, Monacoin and TaTaTu are also down 5% on the day.
Total market capitalization has climbed another 2.6% on the day to 8 billion. Trade volume has remained the same at billion but a steady recovery seems to be happening. Time will tell if this can be prolonged to the end of the year or the bears will get back into a selling frenzy to push cryptos back down to their yearly lows.
More on Bitocoin Cash can be found here: https://www.bitcoincash.org/
FOMO Moments is a section that takes a daily look at the top 30 altcoins during the current trading session and analyses the best performing ones, looking for trends and possible fundamentals.
The post Cryptocurrency Market Update: Bitcoin Cash Boosted on Stress Test Day appeared first on NewsBTC.