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  • Bitcoin dominance rate – Why some are concerned?

    Bitcoin dominance rate – Why some are concerned?

    Bitcoin dominance rate - Why some are concerned?
    Why this question about the Bitcoin dominance rate now?

    By Guy Avtalyon

    The bitcoin dominance rate is a very important indicator of crypto market preferences. It is the measure of how Bitcoin is important in the crypto world. To know the Bitcoin dominance rate observe its market cap as a percentage of the entire market cap for all cryptos. The traders and investors pay a lot of attention to it.

    Okay, it isn’t shocking news that Bitcoin is dominant. Everyone knows that. It is here for a long time, it was the first, it has attention like a rock-star.

    So, why this question about the Bitcoin dominance rate now? The alarms are a turned-on because of Bitcoin’s current climbing.

    In the crypto markets, it covers about 70% of the market cap as a whole. The same level was seen in April 2017.
    So, there we have a concern on the scene!

    Some are afraid that this is a sign that the bull run is close. That will accelerate bitcoin’s dominance to over 90%. The existence of any other crypto would be doubtful. That high dominance rate would destroy the others.

    The altcoins are on the edge of return, think others. Or no-return, the opponents are kidding. As always, when it comes to data interpretation you can see and hear literally everything and anything. But to be serious, the bitcoin dominance rate may show us many things. Even the increase isn’t always good news.

    Why increasing dominance rate isn’t good news? 

    Well, Bitcoin’s dominance rate is not an independent measure. It is related to momentum, inclination, confidence. In one word – popularity. Bitcoin is the most popular cryptocurrency without a doubt.

     

    The price of Bitcoin is the measure of its reputation. On the other hand, dominance is related to bitcoin’s relationship to other cryptos. There is one trick: the dominance may increase when the price is going down and vice versa. To repeat, it isn’t an absolute measure.

    Bitcoin’s high dominance

    It could be a double sword.

    Bitcoin is an extremely volatile asset and risky this attribute often led investors to less risky assets and, can we say, safer. But, on the other hand, thanks to its popularity the whole sector of crypto assets may benefit if there are more investors in Bitcoin.

    This new increasing Bitcoin dominance is proof that investors’ sentiment that this crypto is relatively safe to invest in.  The sentiment indicator is just a current opinion, be careful with that.

    How can you be sure the trend will continue? With what energy? What sentiments do is give power, to push things to go further, to build a chain of very convinced investors and traders who are buying bitcoin. 

    The added importance is market trust, particularly at the initial steps of institutional engagement.

    Big traditional funds are not worried about the relative value of one token related to another. Their consideration is their portfolio. They will decide what is better to invest in, crypto, or some other asset. Having that in mind, it is more likely they will invest in Bitcoin if they want to have crypto in their portfolios. 

    Why is that?

    Bitcoin has the liquidity, active derivatives market and is registered in most jurisdictions. With the rising dominance rate, Bitcoin has the opportunity to boost investors’ trust in the overall crypto market. 

    But nothing would last forever.

    Prior run-ups in the dominance rate were followed with a change altogether with investors’ attention to new choices. That is a calculation. When market leaders grow extremely, wise investors take profits and re-invest in other winning assets. The last bull market noticed bitcoin’s dominance decline from above 85% to under 40%. This time it is something else.

    How? During the previous bull market, we had plenty of new tokens. Where are they now? They are not exciting anymore? No, they are not existing anymore.

    Moreover, the interest of institutional investors with a focus on bitcoin will launch bitcoin’s dominance to jump even more.

    Stay tuned and keep your eye on what is happening behind the stage. Traders-Paradise has a fantastic example of how to MONETIZE BITCOIN

  • The German market is overflowed by fears of a slowdown

    The German market is overflowed by fears of a slowdown

    2 min read

    German fears of stock markets' slowdown rose

    by Gorica Gligorijevic

    German fears of stock markets’ slowdown rose causes the fear, that the whole country may slip into a recession. The day before the US announced its decision to delay part of tariffs on Chinese imports.

    The trigger in the German’s markets was news that the country’s economy declined 0.1% in the second quarter of this year in comparison with the prior quarter. According to some analysts, the fears are caused due to global trade conflicts coupled with difficulties in the auto industry. The decline of 0.1% was just a trigger to show them. 

    “Data showing that the German economy contracted in the second quarter reignited fears of a global recession, dampening demand for riskier assets such as equities,” said Fiona Cincotta, market analyst at City Index

    Many European markets are down.

    Germany’s DAX was down 1.5% at 11,575. The CAC 40 in France dropped 1.4% to 5,288. The FTSE 100 index of leading British shares was 1% below at 7,181. 

    German fears of stock markets' slowdown rose

    The US Wall Street was ready for similar drops at the bell end with Dow futures and the wider S&P 500 futures falling 0.9%.

    Tuesday was one of the better days in the markets. The US Office of the U.S. Trade Representative announced that the US will delay the tariffs on some of China’s products like consumers goods. But some sorts of fish or baby seats are entirely removed. The new trade policy will be on scene until December 15.

    European shares stabilized on Thursday 

    But prior there was a brutal sell-off. It was fired by overall fears of a recession. The investors were expecting central banks would relax monetary policy and calm nervous markets.

    The pan-European STOXX 600 index dropped at 0828 GMT hitting the point very close to six-month lows.

    The trading volumes in Italy, Austria and Greece were closed for a holiday. Almost all European markets moved to the negative area.

    London’s FTSE 100. underperformed its European rivals, burdened down by oil main and some stocks that traded out of dividend right.

    In profits news, strong numbers from beer maker Carlsberg In Denmark (CARLb.CO) and shipping group A.P. Moller-Maersk (MAERSKb.CO) pushed stocks of these Danish companies to more high-priced.

    Drillisch and United Internet slipped below after the German telecom company lessened its profit outlook.

    Here is a short summary of EU markets:

    UK FTSE 100 -1.7% hits two month low
    German DAX -2.3% hits a four-month low
    French CAC -2.2% hits one week low
    Italy MIB -2.8% hits two month low
    Spain IBEX -2.2% hits two month low

    The German DAX again broke the 200-day moving average, the last low was in June. It stopped at the 50% retracement of the rally in December. DAX primarily have to survive on that level. If don’t, the market may be very violent. But if Angela Merkel announces a 180 on deficit spending, the investors on the German stock market will have hope.

  • Don’t buy stocks on a dip

    Don’t buy stocks on a dip

    Don’t buy stocks on a dip
    Many say the strategy is to “buy a dip”, but can it really lead to success? There are so many opposing opinions.

    By Guy Avtalyon

    Don’t buy stocks on the dip says UBS Group AG. It is a Swiss multinational investment bank. While analysts at Goldman Sachs Securities Division advised: “Buy bitcoin on the dip” for stocks it is a straight way to a loss.

    “Buy the dip” was a good plan for the bull market, but analysts at UBS addressed to stock investors:

    “A world where leading indicators are accelerating is generally one where a correction in equities is an opportunity for investors and ‘buying the dip’ gets rewarded. In contrast, today’s backdrop with PMIs (purchasing managers indexes) in the low 50s and rates arguing for further declines often results in buying the dip being a losing proposition,” addressed strategists Francois Trahan and Samuel Blackman, in a Tuesday.

    This announcement is quite strange because dip buyers are still making a profit.

     

    The Dow Jones Industrial Average DJIA, +1.44%  increased more above 370 points Tuesday. This increment came after the U.S. said it would pause imposing tariffs on some imports from China.

    The S&P 500 SPX, +1.48%  climbed 1.5%. The Dow is depressed 2.2% for the month, and the S&P 500 is 1.8% below in comparison to the previous month.

    Trahan and Blackman have a different interpretation of the current market conditions.

    What is buying on a dip

    It is a losing proposition.

    They said the historical records covering the last nine economic cycles, reveals that buy-the-dip works the best when leading economic indicators, like PMIs (private mortgage insurance), are accelerating.

    The analysts said that buying-the-dip had a virtually excellent history. They call it the “risk-on” period. However, it is followed by the “risk-off” period. When PMIs fell under 50, labeled the “risk-aversion” period, dip-buying has poor benefits, they said. 

    Don’t buy stocks on a dip the analysts said

    They said that defining the period of the cycle is just one piece of a three-item checklist. They also explained the perfect risk-reward scenario. It happens when the “risk-on” period is followed by interest rates,  that carries an increase in the price/earnings ratio, so the earnings opportunity is promising.

    Today, the potential dip buyers are 0-for-3, they explained. In other words, we are witnesses of the “risk-off” period, but the companies earnings opportunity has declined.

    They also estimated interest rates.

    They were looking at yields with an 18-month lag.

    Their conclusion is: “the path laid by interest rates 18 months prior to today shows that there is now tightening in the pipeline, and it’s more likely we experience multiple contractions than expansion in the months ahead.” 

    Multiple expansion points the readiness of investors to pay more for a dollar of earnings. And they pointed out that the risk/reward for buying the dip “extremely poor”.

    As you can see, analysts from Investment bank Goldman Sachs has advised investors to capitalize on the new dip and buy bitcoin.

    The bank stated that its short-term target for bitcoin is $13,971. It also suggested to investors to buy Bitcoin on any dips in the current situation. But, don’t buy stocks on the dip, says UBS Group AG.

    There is a difference.

  • Morgan Stanley Claims We Are In A Bear Market

    Morgan Stanley Claims We Are In A Bear Market

    2 min read

    Morgan Stanley Claims We Are In A Bear Market

    The analysts from Morgan Stanley claim that we are in a bear market. 

    Any proof? Don’t tell me you missed it! 

    The US S&P 500 Index was closed on Friday down by 3% compared with the highest level in late July, 26, registered in intraday trading. Bear market means the stock prices drop 20% or more but the corrections include price falls about 10%.

    So, you may ask how we already enter the bear market if prices dropped by 3%, it so far away from 10%.
    Morgan Stanley anyway claims that “we are still mired in a cyclical bear market” pointing three spots in this estimation.

    The proofs of the bear market 

    First, compared to the beginning of 2018. the S&P 500 is “roughly flat”, but Friday’s closing was less than 1% over the intraday high noticed on January 26, 2018.

    The other evidence is the fact that 80% overall equity markets dropped by 10% already.

    And third, the other US market indices are down by approximately 10%. 

     

    SP500 historical chart

    Morgan Stanly further noticed that during the past year and a half, a  majority of global stock market indices dropped notably from their highs. Actually,  all stock markets were more volatile than during the previous two years when we had the bull market profits. 

    “At this point, we would view our call in January 2018 for a multi-year consolidation and cyclical bear market as well established and documented,” said Morgan Stanly in conclusion.

    The Morgan Stanly report notes that both the small-cap S&P 600 and the mid-cap S&P 400 didn’t reach new highs in 2019. Also, both dropped by more than 10% from prior highs noticed set in September. 2018. 

    The statistics

    The statistics show, among eleven S&P 500 sectors, five have reached new highs this year with consumer staples, utilities, and REITs as leading. The two others are consumer discretionary and the IT sector.

    Morgan Stanley states “…the fact that long-term Treasury bonds have defeated the best equity market in the world over the past 18 months, especially since September [2018].”

    So, according to Morgan Stanley, we are in the middle of the bear market.

    The previous bear markets

    But there is no difference from the first four months of this year. We had a bear market rally. Yes, it came like a storm but a very long one. It was Christmas when the 25% rally started and ended on May 1 when the all-time highs were recorded. But all benefits from that short bull market period was gone with the wind. The bulls were so close, but still incapable to make a change.

    Morgan Stanley is right. Since October 2018 we are in a bear market. At the time of the mentioned rally, all had some hope based on historical performances. The fact is that some of the biggest rallies have happened throughout bear markets. But not now.

    The bottom line

    What you have to pay attention to is the overall trend. It will show you the right spot. The best way to do that is to use the long-term charts to set your trading correctly. Anyway, there is no good or positive prediction. Be ready to see the large bear rallies, there will be a tremendous loss. Having this information in your minds, you will know what to do and how to stay objective.  Over one century, we had  32 bear markets and 123 market corrections. 

    The bear market lasts shorter than bull markets. So, this one will pass.

  • Cannabis earnings – the countdown started

    Cannabis earnings – the countdown started

    The cannabis earnings potential is huge
    The cannabis industry is more than ever in investors focus

    by Gorica Gligorijevic

    Cannabis earnings is promising. This week can be very important for the cannabis industry. The time to post financial results is near. So, we will see their records for the last quarter. Aurora Cannabis is a top producer, but maybe some other marijuana stocks can generate more next year.

    First in line to show the last quarter result are:

    Greenlane Holdings Inc (NASDAQ: GNLN), Medipharm Labs Corp (OTC: MEDIF), and Village Farms International Inc (NASDAQ: VFF) they did it on Monday after the closing bell.

    Today, the results from Tilray Inc (NASDAQ: TLRY) will be shown. It is expected Tilray to record a net loss of 25 cents per share and its revenue to be of $41.11 million. Today also, earnings result from Green Organic Dutchman Holdings Ltd (OTC: TGODF), Acreage Holdings Inc (OTC: ACRGF), and Flower One Holdings Inc (OTC: FLOOF) are coming after the market close.

    On Wednesday, Aug. 14, Aleafia Health Inc (OTC: ALEAF), Jushi Holdings Inc (OTC: JUSHF), and Helix TCS Inc (OTC: HLIX) have to post their earnings reports. They are followed by Canopy Growth Corp (NYSE: CGC) and Trulieve Cannabis Corp (OTC: TCNNF) after the closing bell.

    This is a busy week for cannabis companies. Investors seem ready to reward good companies. The main criterion among investors is the company can gain a profit. But, they are more than ready to punish the ones that don’t.

    Cannabis earnings will rise

    The cannabis industry is a big-money market. With legalization in more countries than it is now the case, it can be one of the most valued markets. I know there will still be the black market and a lot of money will go there, frankly more than in the legal markets. But still, this market could produce more than $250 billion in the next 10 or 12 years, counting the annual average sales, of course.

    That sounds pretty good for long-term investors. So, I feel free to suggest to you some companies to watch in the future.

    As the first Aurora Cannabis as a top producer. 

    It is the most trustworthy cannabis company among millennial investors. This data comes from Robinhood, an online app for investing with over 6 million users. The majority of millennial investors are Robinhood users. That put Aurora to the most-held stock online investment. It is reasonable to expect that millennials will take a bigger part in the world of investment in the future and support legal cannabis growth. It is easy to evaluate the reasons behind investors’ decision to invest in this company.

     

    Aurora is leading the world production of cannabis with an annual production of 150,000 kilos. It plans to reach 625,000 kilos of annual output in 2020. And it isn’t unreasonable. By engaging the full production capacity, Aurora can produce 700,000 kilos of marijuana on the annual range.

    Wall Street anticipates Aurora can be one of the best revenue generators in 2020 and capable to deliver about $518 million in sales per year. 

    The potential of cannabis earnings

    There are not too many pot stocks in the arena that could hit this expectation. But, Wall Street predicted three cannabis stocks able to surpass Aurora Cannabis in 2020.

    Curaleaf Holdings is expected cannabis earnings at $900 million in 2020 sales but with a cash-and-stock deal for Grassroots, which will bring to it about $350 million, let’s say Curaleaf Holdings may generate about $1,250 million.
    Also, pay attention to Cresco Labs, the potential of $715 million sounds good as Canopy Growth with $521 million.

  • How to Make a Fortune Working From Home

    How to Make a Fortune Working From Home

    Make a fortune working from home
    How can anyone make a fortune working from home?

    By Guy Avtalyon

    I know you will ask how is possible to make a fortune working from home.
    I also have a question for you.
    Have you ever heard about Jack Cornes? His engineering insane idea into a home robotics start-up showed not insane but as profitably and brilliant.

    Jack Cornes is an entrepreneur. His first business was selling vegetables from his grandmother’s garden. He was 8 at that time. When he was 14 online clothes retail was his next successful business with international shipping. Jack founded a successful online clothes retail. Now he is in his 20s and he started with schoolmate Harry Smith, a new business startup, and launched HausBots. They started their robot business in Smith’s garage in Birmingham.

    Jack Cornes said about those days:

    “Harry is a self-proclaimed mad inventor. His parents asked him to paint the living room, which he found completely boring, so he let his mind wander and came up with a better solution.”

    Climbing painting robots

    Make a fortune working from home

    Their aim is to produce robots for the construction industry and for home use. Their first result is a painting robot. They are expecting to begin commercial trials in the next several months, actually, they want that in the next four months.

    This guy raised £210,000 to realized his idea about home-helping robots. His startup HausBots develops climbing robots to automate the painting of walls.

    Cornes likes being an entrepreneur. 

    “It is flipping tough, but I was never very good at being a cog in someone else’s machine. It is great to have some autonomy and it is amazing to be building something that wasn’t here before we started,” he said.  

    As a measure of how this project is interesting: currently, Cornes’ robots are beta testing. A large number of customers and companies are included. The companies specialized in painting outdoors, like walls of warehouses, for example, are very interested in his product. Cornes is expecting to start sells soon. 

    How to make a fortune working from home as plan No1

    And he is just as many Generation Z members that more than any time before are interested to start their own businesses. A lot of them want to make a fortune working from home. The benefits of this approach are numerous. They don’t have to pay high rents for a place to work, the working time is flexible, and moreover, they are working for their own ideas.

    According to some research young people are caught with this growth of startups. It becomes a trend among them. 

    Approximately 51% of the people between 14 and 25 age answered that they would like to start their own business. Many of them already are running some, revealed a survey ordered by the Entrepreneurs Network and VC firm Octopus Group. Also, this goal is more popular in a group of 22 to 25 years old people. Almost 60% of them said they would like to run their own business. 

    Tips to work from home

    If you don’t have a strong back, you have to start from your home. The majority never find some financial support and have to work different jobs to raise the funds and be able to finance the ideas they have. Also, they have to cut other expenses, so the best solution is to start working from home.   

    Listen, I am pretty sure they will. They will make a fortune working from home.

    The idea of freedom and being your own boss is powerful, and at the same time, the most popular. Having a passion is a great fuel. Desire to make success also.  If you want to start to make a fortune working from home it is wise to build a network of people who you think are doing excellent things. That will help you a lot.

    Some inspirational ideas you may find in our tutorial HERE

  • Buy bitcoin on a dip, it is an excellent opportunity

    Buy bitcoin on a dip, it is an excellent opportunity

    Buy bitcoin on a dip, advice Goldman Sachs.
    Why buy bitcoin on a dip, experts suggest that and my analysis shows that. Here you’ll find why it is a good long-term opportunity.

    By Guy Avtalyon

    Analysts from Investment bank Goldman Sachs has advised investors to capitalize on the new dip and buy bitcoin. The bank stated that its short-term target for bitcoin is $13,971. It also suggested to investors to buy Bitcoin on any dips in the current situation.

    This statement was provocative for Su Zhu, co-founder, and CEO at Three Arrows Capital. He tweeted: 

    Buy bitcoin on a dip, advice Goldman Sachs.

    The bank concludes based on its Elliott Wave analysis, bitcoin will have support around $11,094. Also, they founded a nice scope for a move higher to $12,916, then $13,971.

    “Any such retracement from $12,916-$13,971 should be viewed as an opportunity to buy on weakness as long as it doesn’t retrace further than the $9,084 low,” the statement declared.

     

    If Goldman Sachs’ analytics are correct, and their advice to buy bitcoin on a dip, we will see bitcoin recovered to 2019 highest level.

    Goldman Sachs’ analysis is based on the CloudMiningIndex (CMI) bitcoin futures market, meaning analysis didn’t cover weekend prices. Therefore, that were the gaps in the chart over the weekend at the time when futures markets are closed. If you are an individual investor you are free to neglect this advice. It is only for institutional investors.

    Applying Elliott Wave theory, Goldman predicts a short-term rise that could pop the previous highs in 2019.

    Buy bitcoin on a dip for long-term investment

    If you are or you plan to be a long-term investor, bitcoin shows a great buying opportunity at current prices. Goldman Sachs stated that any pullback under $13,000 is a sign to accumulate. The statement implies that if the price explodes once again it will be more valuable.

    “In the bigger scheme of things, this might still be the first leg of another 5-wave count similar to the trend that lasted from Dec ‘18 through June ’19.”

    We saw that in the first half of this year.

    Bitcoin already had such 30% pullbacks. To be honest, you will not profit at all if you buy a bitcoin during the bull market periods. Buying dips is not profitable for a long time ago. But Goldman’s suggestion pushed other analysts who claim that buying bitcoin in dip from fast runups is a good idea. Goldman stated that the price will hopefully strengthen again after  $13,971price and after that point, it will be pushed even higher. Bitcoin has confusing price action for several days until now. A break is above Wednesday’s high of $12,145 and that is needed to refresh the bullishness. On Tuesday Bitcoin hit a bid at $9,100 and grew to $12,325. 

    In the Asian market, the bitcoin price was $12,040 during the trading hours but felt below the $12,000 mark. On Friday it hit the fourth day in a row of bull failure over $12,000.

    The intraday highs of $12,325, $12,145, and $12,061 were on Tuesday, Wednesday and Thursday.

    Actually, bitcoin charts show lower highs above $12,000 and higher lows since Tuesday. That restricting price range is a sign of hesitation in the market.

     

    The consolidation is also a sign of bullish tiredness because it comes after a 35% price growth during the past eight days.

    Bitcoin could possibly proceed to consolidate to the end of August but also it can fall back to $10K. The price prediction isn’t quite possible because the market is still struggling at the resistance level. If bitcoin makes a break above the trend line that will be the sign of bigger movement, maybe higher than $15K to the end of this month.

  • Bitcoin Usage for Laundering the Dirty Money

    Bitcoin Usage for Laundering the Dirty Money

    Bitcoin Usage for Laundering the Dirty Money
    The military wing of Hamas, the Gaza-based Brigades called their patrons to send them money using Bitcoin

    By Guy Avtalyon

    Bitcoin usage for laundering the dirty money is made much more often than anyone can expect. Criminals utilize the fast-moving speed of technological development with financial transactions. That fact was confirmed many times until now. They are totally ready and educated to handle new payment methods and cryptocurrencies are extremely interesting for them.

    The criminals are using cryptocurrency to launder the incomes of their criminal activities, of course. The most popular is Bitcoin, of course. But not due to its nature. The reason is there are so many exchanges where they can exchange their dirty money for bitcoins.

    Their opinion is that it is easy to hide tracks of transactions just because one of the main characteristics of Bitcoin is anonymity. That way, they can hide the source of income and send cryptos all over the world without exposure to the law. 

    As Bitcoin appeared, meaning since 2009, more than $2,5 billion of dirty money was laundered through Bitcoin. But, Bitcoin usage for laundering dirty money requires much more knowledge and money.

    The chain of mistakes

    The first mistake in their minds and education and overall knowledge about crypto – it isn’t so hard to hide the tracks of transactions. Actually, it is quite easy to link Bitcoin transactions and identify the criminals. Blockchain, the technology behind the Bitcoin, is entirely transparent and browsable by literally anyone.

    The criminals are not so good artists and that’s why those stupid idiots are constantly caught for using Bitcoin in illegal activities. The point is that Bitcoin isn’t anonymous in the sense of their opinions.

    The truth is, there is hardly any crypto on the market that is able to hide identities when making transactions.
    But how do they do that? Of course, we will never disclose all their tricks here even if we know a lot about them.

    First of all, they are using the dark web.

    For example, criminals divide Bitcoin after purchasing it and reassemble it with the help of so-called “tumblers”. Tumblers are. let’s say, bitcoin mixers. Their task is to clean that dirty crypto bought with dirty money or received as dirty already as payment for criminal jobs. How do they do it?

    Tumblers are spreading that crypto on different addresses and wallets. It is necessary to have just one wallet on the so-called clearnet, and a few hosted on the dark web. No more details. That will be all about Bitcoin usage for laundering dirty money.

     

    This service isn’t cheap, the fees are ranged from 1-3% of the whole amount.

    Hamas practices Bitcoin usage for laundering dirty money

    Criminals of all colors and sorts are trying to launder their dirty money. Recently, Hamas is embracing the Bitcoin. They developed a complex cryptocurrency system to raise funds from sponsors and hide the evidence. The military wing of Hamas, the Gaza-based Izz El-Deen al-Qassam Brigades called their patrons to send them money using Bitcoin. 

     

    The fundraising operations are revealed online at the end of January this year. After so many misuses by one or the other sort of criminals, we have on the crypto-scene new ones – terrorists. For the terrorist’s group’s dark purposes, Bitcoin is useful to raise funds. 

    Hamas is one of them. Hamas rises money in Bitcoin. Its Izz El-Deen al-Qassam Brigades is a terrorist group proscribed by many countries, among others, the United States, Israel, and the European Union. In truth, sending funds to Hamas is prohibited in those regions.

    The complexity in Hamas’ work lies in Its website which is generating a new digital wallet with each transaction.

    Far more complex to track transactions but not impossible. 

    So, they were caught.

    A leading blockchain analysis firm Elliptic identified them. They discovered where the cash came from, and also, what the Al-Qassam Brigades did with the contributions. Elliptic found that the bulk of the transferred bitcoins came from a “single, major cryptocurrency exchange”. The point is that analysts didn’t have such a hard task to track cash supplying Hamas. 

    Yet, Hamas has to figure out how to use Bitcoin smarter and hide the tracks better. This terrorist group was targeting an international audience and supporters.

    Nevertheless, the scheme employed by this terrorist group reveals the weakness of cryptocurrencies. Bitcoin has already suffered criticism in the past over suspicious websites where people have used this crypto to purchase drugs and guns, or for money laundering. Without regulations in this sector, it is quite possible for terrorists to collect money, to receive donations from sponsors, to send money over the globe, and finance their nefarious activities.

    Happily, there are so many other ways to use Bitcoin for the right purpose.

  • Asian Stock Markets Perform Careful Increases

    Asian Stock Markets Perform Careful Increases

    2 min read

    Asian stock markets recorded substantial increases

    • Asian stock markets recorded substantial increases

    Asian stock markets carefully raised in early trading Monday. The previous week was volatile for overall markets because the U.S.-China trade tensions escalated.

    According to Goldman Sachs, a trade deal is pretty much impossible before the 2020 US presidential election. This US multinational investment bank cautioned that the open-ended trade war has a bigger influence on the U.S. economy than expected. In a letter to investors, this bank lowered its growth forecast for the market movements. Also, it warned the risk of recession is growing. The reason behind is the companies are reducing spending which is, of course, caused by trade-war risks.

    Asian stock markets recorded substantial increases

    Yesterday, 11/08/2019 Monday, China’s central bank set the yuan lower than 7 per U.S. dollar. The value is the same for the past three days. The People’s Bank of China set the currency’s reference limit at 7.0211 per dollar. That is lower than the level on Friday. The analysts had expected an even lower point.

    According to MarketWatch:

    “Hong Kong’s Hang Seng Index HSI, -0.18%   gave up early gains and was last about flat, while the Shanghai Composite SHCOMP, +1.45%   gained 0.7%. South Korea’s Kospi 180721, +0.23%   advanced 0.4%, while Taiwan’s TaiexY9999, -0.21%   was about flat and Indonesia’s JSX Composite JAKIDX, -0.40%   declined slightly. Australia’s S&P/ASX 200 XJO, +0.09%   was little changed. Markets in Japan and Singapore were closed for holidays.”

    Some individual stocks like Sunny Optical and Tencent raised in Hong Kong, but HSBC 5 fell. Samsung and SK Hynix increased in South Korea, in contrast to Rio Tinto that slipped in Australia.

    President Donald Trump statement

    The increases in Chinese stocks followed the U.S. President Donald Trump statement on Friday that he is “not ready to make a deal.”

    “China wants to do something, but I’m not doing anything yet,” Trump told Breitbart. “Twenty-five years of abuse. I’m not ready so fast.”

    In Trump’s opinion, as he said, it would be “fine” if the negotiation between the two countries planned for September, were “called off”.

    Meanwhile, China fixed currency’s reference limit at 7.0211 per dollar which is lower than the 7 expected value.
    Some very important data will come on Wednesday from China.  On the first place, information on industrial production, retail sales,  and the jobless rate.

    That will be interesting because Cathay Pacific Airways Limited (HK:0293) fell more than 4% just because China blamed it that its employees participated in anti-Beijing protests. Well, the pilot is suspended.

    There is Huawei too

    President Trump told CNBC that the U.S. administration will not have any relations with Huawei as the trade war proceeds to increase.

    “We are not going to do business with Huawei. … And I really made the decision. It’s much simpler not doing any business with Huawei. … That doesn’t mean we won’t agree to something if and when we make a trade deal,” Trump told CNBC.

    Speaking about Asian stock markets we cannot avoid Chinese tech stocks.

    The accepted opinion is that they should lag the rest of the market. That opinion supports Ari Wald, head of technical analysis at Oppenheimer.

    “We think the opportunity is on the U.S. side — U.S. tech — and we think the risk is in China tech,” Wald stated on CNBC’s “Trading Nation. ” and added “the S&P 500 is breaking out to the upside. We see this as the resumption of U.S. leadership.”

  • Gordon Growth Model – Mathematics of Trading

    Gordon Growth Model – Mathematics of Trading

    5 min read

    Gordon Growth Model

    by Gorica Gligorijevic

    The Gordon Growth Model is useful to determine the intrinsic value of a stock and you will see how. It is all math.
    Anyone who wants to be a profitable trader has to know math. Profitable trading is not about feelings, or prophecy and stock advice or picks. It is all about math. Yes, the main goal is to earn money more than lose.

    But trading guessing is not a good idea. The math generates success and luck in your trading. Do you want to know how the math works in your attempts to profit and be a successful trader?

    If you want to act like a pro you have to be able to explain and make the math behind your trading. Anyway, you might benefit from understanding the math behind the stock market.

    At least, you have to know the basic calculations. 

    Traders-paradise wants to show you some simple to understand. It will help you to pick the right stock and keep your hopes of future returns more realistic.

    Let’s first determine the intrinsic value of stocks. How to do that? Just use of the Gordon Growth Model. Oh, yes. You will need more explanation.

    The Gordon Growth Model is known as the dividend discount model or DDM but without the current market stipulations, meaning the factors that influence the market, such as competitors, business challenges, etc.

    The point of this Gordon Growth model is to relate the current intrinsic value of stocks to the value of a stock’s future dividends. This is a very old model but still actual and popular. The equation shows that the long-term real return from the market should be almost equal to the inflation, modified by the compound yearly growth rate in dividends and increased by the current dividend yield. 

    Let’s view this complex definition in a simple example.

    The S&P 500 real growth rate in dividends has been around 1.3% per year over almost a hundred years. At the same period, the dividend yield was 5% annual. What you have to do is to sum these both. The sum you get is a bit less than actual 6,5% compound annual return from stocks for that period.

    This is defined by an almost doubling of the PE ratio, called a speculative return. That was exactly what did add the stock returns.

    Let’s see Gordon Growth Model and how to calculate it.

    As we said the value of a stock is shown as 

    Stock’s value = D1 / (k – g)

    where D1 represents the expected annual dividend per share for the next year k is the investor’s discount rate of return. You can estimate this using the Capital Asset Pricing Model, for example.

    and g is the anticipated dividend growth rate. We take this as a constant.

    When you have all these parameters, it is so easy to calculate the intrinsic value of the stock. For example, the S&P 500 dividend yield is about 2 %, 4.5% is how much you can expect dividends to grow due to the historical performances. So you can expect a long-run return at 6.5%.

    To show you how this model is true whether or not a company pays a dividend or reinvests it let’s show you this real example.

    Suppose your preferred company plans to pay a $2 dividend per share next year (D1). Also, you expect an increase of 10% per year following (g). Also, suppose you are expecting a rate of return on the stock to be 20% (k). Let’s say, the stock is trading at $20 per share now. Using the Gordon Growth formula, you can determine that the intrinsic value of one share of the stock is:

    $2.00/(0.20-0.10) = $20

    When you have all these parameters, it is so easy to calculate the intrinsic value of the stock. 

    You will very often find the Gordon Growth Model formula calculated:

    P = D1/(r-g)

    The stock price (P) is equal to the anticipated value of the dividend (D1) divided by the difference in the investor’s rate of return (r) minus the constant growth rate of the dividend (g).

    In essence, the Dividend Growth Model utilizes the investor’s required RoR and the dividend growth rate to calculate the value of the stock. 

    But dividends will increase at different percentages. For example, dividends will grow quickly and then reach a steady rate. The dividend is still supposed to be $2 per share next year, but dividends will progress yearly by 14%, then 20%, then 24%, and then stable rise by 10%.

    By using components of this formula, but examining every year the recent dividend growth individually, we can determine the current value of the stock.

    Following the inputs for our example Gordon Growth Model formula shows:

    D1 = $2.00
    k = 10%
    g1 (dividend growth rate, first year ) = 14%
    g2 (dividend growth rate, second year) = 20%
    g3 (dividend growth rate, third year) = 24%
    gn (dividend growth rate every year after) = 10%

    Let’s calculate the fair dividends for those years (we already find the dividend growth rate):

    D1 = $2.00
    D2 = $2.00 * 1,14= $2,28
    D3 = $2,28 * 1,20 = $2,74
    D4 = $2,74 * 1,24 = $3,40 

    The next step is to calculate the current value of every single dividend during the extraordinary growth period:

    $2,00 / (1,20) = $1.67
    $2,28 / (1,20)^2 = $1.58
    $2,74 / (1,20)^3 = $1.59
    $3,40 / (1,20)^4 = $1.64

    Now we can calculate the dividend in the year of stable growth of 10%:

    D5 = $3.40 * 1.10 = $3.74 

    Further, we can use the Gordon Growth Model’s formula to calculate the value of dividends in the 5th year:

    $3.74/(0.2-0.1) = $37.40

    This allows us to calculate the present value of the dividend’s growth in this 5th year, or how much that future growth is worth to us today:

    $37.40/(1.10)^5 = $23.22

    The final step is to calculate the current intrinsic value of stocks by summing up the present value of dividends in the first four years and the value of dividends in the fifth year.

    1.67+1.58+1.59+1.64+23.22=$29.7

    The main benefit of this formula is that it may cool down your emotions when trading. Calculating this can bring you down to the ground in growth periods, and also can support you when the market is falling.

    So, can the Gordon Growth Model’s formula predict the future market returns? In short, yes. 

    But the weakness of the Gordon growth model is its hypothesis that there will be a constant growth in dividends which is rare. So, you can use this formula for companies with stable growth rates.