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WSJ: Bitcoin’s Correlation With Traditional Assets Markets Is High These Days

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A new article published by the Wall Street Journal (WSJ) magazine is in the Bitcoin news today, suggesting that the correlation between Bitcoin and traditional assets markets has been high in recent days.

The article pulled data from the research firm Excalibur Pro Inc. in which the WSJ states that Bitcoin has traded at a 0.84 correlation to gold over the past five days where -1 indicates complete inversion and +1 indicates perfect correlation.

WSJ also shows why this kind of a pattern formed. The first reason for that is the reported influx of institutional money into the crypto and blockchain space, especially the Grayscale Investments’ over-the-counter exchange-traded fund (ETF) as a prime example. The article also shows that this trust saw $51 million in assets under management during its first year (2013) and by the end of last year, it surged to around $3.5 billion.

Another crucial factor is the venture capital (VC) investment which was around $96 million in 2013 and grew to $500 million in 2016 and to over $2 billion in all-time VC crypto investments by the end of 2017.

The WSJ report also noted that a major pull factor for traditional capital into crypto is the building of trading services and infrastructure with high regulatory compliance, the crypto futures trading market and the attempts to gain broad acceptance for crypto-based ETFs.

As reported, new major developments on the horizon could be the launch of the Bakkt Bitcoin futures exchange, the launch of investment giant Fidelity’s digital assets business and the influx of stalwart investors including the names of Yale, Harvard and Stanford Universities.

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Bitcoin Claims A New 2019 High, Other Altcoins Left In The Dust

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Bitcoin claims a new 2019 high since investors that did not generate any returns in 2019 are looking into buying the largest cryptocurrency. We take a closer look into the price analysis in the coming altcoin news below. Over the weekend, btc reached a new high to nearly $9,400 and the other assets were having trouble following it. The gains across the stock market and commodities are pale in comparison to Bitcoin so the investors are now sorry for not investing in the crypto. There is also no explanation of what fuels the price of the number one cryptocurrency despite the many claims that this could be a consequence because of the U.S.-China trade war or Facebook’s new stablecoin. The Wall Street Journal explained the disparity in returns saying that BTC is up by 150% year-to-date but the broader stock market is far behind. Bitcoin’s gains seem to be taking the market share away from the precious metal-gold and as previously reported, even the most stubborn gold supporters turned bearish on this commodity in 2019 while bitcoin continues to shine with no signs of ever slowing down. One of the people that shook things up for gold is the CEO of Digital Currency Group Barry Silbert. His company is behind the #dropgold campaign and it seems that there couldn’t have been a worse time for this precious metal. Digital currency group’s bitcoin trust reached a value of $2 billion which Silbert says this was roughly the size of Bitcoin’s value in 2014. He noted:
 “The asset class is here to stay…I think it’s now being looked at potentially as an important part of a diversified portfolio…I think the asset class is really ready for the next phase.”
Silbert also pointed out to the crypto industry that its infrastructure including the ‘’institutional grade custody solutions trading software’’ is one big sign for the maturing of the ecosystem. There are multiple catalysts that show how big the demand from institutional investors is but not one includes geopolitical tensions between the US and China. Bitcoin claims still the position that it holds as one of the best-performing assets. As noted in the latest cryptocurrency news, Anthony Pompliano noted:
 “In May, BTC had a nearly perfect negative correlation with the S&P 500.”
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Bitcoin Is Hedge Against Global Liquidity Crises: Grayscale Investments

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The major cryptocurrency asset manager which is managed by Digital Currency Group - Grayscale Investments - has recently released a report in which it says that Bitcoin is hedge against global liquidity crises. Featured on many best cryptocurrency news sites, this report shows that Bitcoin has a massive potential and ought to be considered a strategic position within long-term investment portfolios. The asset manager which acquired CoinDesk in 2016 has also said that Bitcoin is hedge - but that it also has a transparent, immutable and global liquidity. Additionally, the report shows the new shifts in monetary, fiscal and trade policies around the world. Because of that, Grayscale alleges that politicians and policymakers may find it increasingly difficult to manage their economies - insinuating a need for investors to take control of their own finances. The latest cryptocurrency news also show that the report (besides claiming that Bitcoin is hedge) examined five recent macroeconomic shocks in which the digital asset outperformed investments as a store of value. The authors in it extrapolated from the case studies including Grexit, Brexit, China's structural devaluation of the renminbi as well as the two Trump shocks - all of which indicating that Bitcoin is hedge and could be a useful tool in helping investors insulate their portfolios from any potential market failures. Snother case study showed that according to Grayscale Investments, Bitcoin managed to deal with many crises better than other assets.
“Between the day of the announcement and the trough of the drawdown, Bitcoin largely outperformed the following major markets and currencies, producing a cumulative return of 53.6 percent versus an average return of -10.1 percent.”
Bitcoin was used to hedge against the Chinese liquidity risk, caused by local investors when they sold their assets against a structural currency devaluation. When it comes to Brexit as a topic in the altcoin news, during the first one-day global selloff of the pound sterling (GBP) and euro, the researchers found that "Bitcoin was a top performing asset" which boasted a return of 7.1% on strong volume versus an average of -2.1% for the rest of the group of currencies. On top of this, the researchers find cause to recommend because the details of the transaction plan are still being worked out.
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New Banknotes Help Venezuela Set A Bitcoin Trading Record

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New banknotes that are hyperinflated help the number one cryptocurrency set a record in trading in Venezuela this week when the informal markets reached a new all-time high. Following the coming altcoin news, we take a closer look at the analysis. The data from the monitoring company Coin Dance revealed that up to the 15th of June Venezuelans transacted more than 46 billion sovereign bolivars on the popular bitcoin exchange LocalBitcoins. This is a newly reached figure after the one of 40.9 billion was set earlier in May. The ongoing bitcoin activity in Venezuela become extremely popular after the new banknotes appeared in August 2018. Under the regime of the Venezuelan president Nicolas Maduro, the national bolivar reached to a point where five zeros were deleted from the exchange rate overnight. This was a very controversial move that laid the foundation for the issuing of the new national cryptocurrency Petro. The hyperinflation has set the currency since it was founded with annual rates to increase up to 8 million percent in 2019. This week, Maduro rejected the VES and issued new banknotes in larger denominations to counter the slipping value. The Central Bank of Venezuela claimed the move happened in order to ‘’ make the ‘’payment system more efficient and facilitate commercial transactions’’ but there seems to be little sign of appreciation from the consumers. With the BTC price upstick which set at the end of last week, there was some renewed enthusiasm on the part of traders in countries such as Peru, Argentina, and Colombia. All of these countries have been heavily involved in the Venezuela crises and the reports show that the officials are now attempting to increase border control in order to decrease the flow of refugees. As noted in the latest cryptocurrency news, the president of Brazil Jair Bolsonaro also stated that Latin America should introduce its own version of the Euro but didn’t seem to know what Bitcoin was. He stated that he canceled a project that was aiming to integrate the native Indian population of Brazil by using cryptocurrency. Argentina on the other hand, as a more progressive country, says that the government is in talks with the billionaire investor and bitcoin advocate Tim Draper in order to develop an Argentinian peso –based exchange.
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Brokerage Giant TP ICAP Opens Its Doors To Bitcoin Trading

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Brokerage Giant TP ICAP with a $2 billion market cap is finally opening the gates wide for bitcoin trading. In today’s coming altcoin news, we find out more about their decision. This is just another example of institutional crypto thirst since the London-based company will execute Bitcoin futures traders in the name of its clients. In an interview the man responsible for the initiative Simon Forster stated:
 “We want to be close to what’s happening within this nascent asset class because we believe it’s important to invest in the early stages of a growing market.”
The brokerage giant TP ICAP hopes that the new bitcoin trading option will attract the new clients’ money and will diversify its offering. The company which operates as an intermediary to financial, commodity and energy markets has seen a slight slump in revenue since the 2008 meltdown. Brokerage companies like ICAP mainly make trades for its banking partners but the volumes show that the company was forced to issue a profit warning in 2018. The initiative will be conducted from London by Duncan Trenholme and Simon Forster who have plans to expand in the United States and in Asia. The ICAP services will provide derivatives trading but they won’t turn their eyes from the option to hold digital assets directly in the future. Forster admitted that the number one cryptocurrency poses a threat to traditional assets so the finance executives can’t really afford to stand on the sidelines:
 “TP ICAP also understands that this technology could disrupt or impact other asset classes where we currently operate, so we feel it’s important to be informed.”
The traditional finance firms are slowly getting into crypto as well. At the start of the year, Fidelity launched bitcoin custody services for their clients. The multi-million asset management company will also facilitate bitcoin trading in the upcoming months. Also as noted in some of the best cryptocurrency news sites, the Intercontinental Exchange (ICE), which is the parent company of the New York Stock Exchange is preparing to launch Bakkt which is a physically-settled bitcoin futures and custody offering. In the meantime, Nasdaq will launch its own platform for bitcoin derivatives in 2019.
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