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12 March 2018

Forex Technical analysis

Bitcoin Price Fundamental Drivers Analysis

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Bitcoin recovers slowly as Crypto exchanges across the planet are caught up in the crossfires. How is the digital currency now trading? What challenges are Crypto exchanges faced with? The answers are discussed in this latest 12 March Bitcoin Price Fundamental Drivers Analysis.

12 March, Swissquote – Threatening Europe, China and Japan aluminum (10%) and steel industries (25%) after implementing heavy tariffs, Donald Trump is now focusing on one of Europe’s flagship industry following infructuous discussions of both European and US negotiators in Brussels, aiming at exempting European industries from potential US taxes.

Donald Trump threatens European automotive industry

Hammering his intentions to “tax Mercedes-Benz, BMW and other German automotive companies if no effort is made to remove tariff barriers for US products, American First President is putting into question the legitimacy of his measures due to decent country diversifications of these multinationals, pushing his unilateral decisions in opposition to WTO fundamentals. On the Asian side, China clearly confirmed its willingness to continue discussions with US negotiators while defending its interests at all cost.

Impact of US tariffs on the market remained subdued, as investors start to minimize Trump’s market threatening due to inconsistencies provided by its plan changes. Asian markets were rallying in the green boosted by strong US February NFP data given at 313’000 (consensus: 205’000). Hong Kong Hang Seng and Shanghai Composite were both expanding by +1.86% and +0.59% while Japanese Nikkei 225 gained 1.65%.

12 March Bitcoin Price Fundamental Drivers Analysis

The crypto market recovers slowly after last week correction, which wiped off $132 billion in valuation. The price of Bitcoin bounces back 14%, from $8,368 last Friday to around $9,550 on Monday morning. However, the momentum is fading as crypto-assets, particularly Bitcoin, is facing more and more hurdles to the broad adoption of cryptocurrencies as a mean of payment.

Crypto exchanges across the planet are facing conditions that are more challenging as governments, credit card issuers and local banks keep throwing up roadblocks. Banks are making increasingly difficult for crypto exchanges to access their services.

Recently, the Finnish broker Prasos found itself in a complex situation as four banks (out of five), with which Prosas is working to convert crypto to fiat currencies (in this case euro), ended their business relationship amid fears of money laundering.

US SEC requires cryptocurrency exchange registration

Last week, the Securities and Exchange Commission (SEC) announced that any exchange, including crypto-exchanges, has to comply with SEC rules. The news triggered a sharp sell-off that affected the entire crypto-market. Even though the regulation of crypto-assets will eventually have positive effects for investors in the long-term - such as a lower volatility - the drop in price suggests that investors are not convinced of those long-term advantages. Indeed, it could be seen as a way to delay the adoption of blockchain based solutions, especially as a mean of payment.

Indeed, banks’ business model is put in jeopardy by the blockchain technology and most them are not ready to compete with it right now. Therefore, they need to buy time and excluding crypto exchanges from the banking system is an easy way to do it.

Disclaimer

This article 12 March Bitcoin Price Fundamental Drivers Analysis was written by Arnaud Masset & Vincent Mivelaz, analysts at Swissquote. While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein.

This document does not constitute a recommendation to sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investments.

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