Word on the Street: Cannabis Stocks Take Off Again - Without Crypto

bravenewcoin (69)in #blockchain • 5 years ago

Stock markets made a significant recovery in the past week in what has been described as a "relief rally" attributed to the end of uncertainty around the US mid-term election results, which ended much as predicted with the Democrats winning the House of Representatives and the Republicans retaining control of the Senate.

The narrative for the stock rally is that the election result decreases the likelihood of Trump's tax cuts being reversed and also makes less likely fiscal initiatives that could push up interest rates - rising rates are negative for stock and bond prices.

Gold flippening watch

The price of bitcoin and the performance of the S&P 500 continues a weak positive correlation this month and almost no correlation with gold. Ideally, to justify Bitcoin's thesis as an alternative digital gold-like asset is a "flippening" of this chart: a negative to weak correlation with stocks and positive correlation with gold.

BTC/SPX correlation in blue and BTC/Gold correlation in grey.

BTC trading dominance

In the past 24hrs, the trading of bitcoin has been dominated by USDT which accounts for over 62% of overall trading, according to BNC's global spot price. This dominance in USDT is a significant jump up from 58% last week and in spite of a number of new stablecoins being listed on exchanges after the Tether volatility in the past couple of weeks.

Top 5 performers

Worst 5 performers

Macro movements around the world

North America:

Pot luck: Attorney General Jeff Session's was forced from his position on Wednesday - after many disagreements with President Trump he was asked to step down. His resignation has been viewed as a 'positive for cannabis stocks' which had a double dose of good news this week after the state of Michigan legalized the plant for recreational use and Missouri approved it for medical use.

However, this optimism hasn't transferred to the main cannabis cryptocurrencies which have seen no relief from their downtrend since the start of the year. The cannabis coins have been some of the worst hit year-to-date, with the top 5 down over 90%.

Tokes (TKS) in the candlesticks, Hempcoin (THC) red; Cannabis Coin (CANN) green; Pot Coin (POT) in yellow; and Dope Coin (DOPE) in blue.

Cannabis stocks have ripped higher this week on the hit of good news with the mercurial Tilray (TLRY) up nearly 30% in one day. It has long been assumed that there is a crossover between investors in crypto and cannabis stocks mainly on the premise that they both appeal to millennial customers - though much of the evidence is anecdotal.

However, at the start of the year, there was a correlation between the prices of Bitcoin and other cryptos and the cannabis industry Alternative Harvest ETF (MJ).

The price of cannabis payment crypto Tokes (TKS) compared to the cannabis producers ETF, MJ.

South America:

Brazil: The Brazilian Real and stockmarkets have rallied since the election of a new president in South America's largest country. President Jair Bolsonaro is a leader in the vein of Donald Trump, right-wing, conservative and nationalist.

Brazil's currency has rebounded off multi-decade lows against the USD.

Venezuela: Peer-to-peer traded volumes of bitcoin on Local Bitcoins continues to reach all-time highs as the stricken country's Petro cryptocurrency struggles to find buyers.

Middle East:

Iran: The US this week ramped up its trade war on Iran as President Trump reimposed trade sanctions on Iranian oil and penalized countries and companies trading with it in spite of the sanctions. The adversarial rhetoric has also raised a notch with Secretary of State Mike Pompeo stating there will be "severe, swift penalties".

Major crypto exchanges Binance and Bittrex this week also dropped their services to Iranian customers apparently in accordance with trade sanctions. The move has blocked Iranian customers from using the trading platforms but hasn't blocked them from accessing their assets.

The Iranian government has legalized cryptocurrency mining as of last month and has sent out signals that it is working on its own national digital currency with the head of Iran's Civil Defense Organization saying "cryptocurrencies can help bypass certain sanctions through untraceable banking operations".

Turkey: Another victim of US trade sanctions, Turkey has been singled out this week by Morgan Stanley research alongside Argentina as likely to slip into recession after narrowly avoiding a currency crisis.

Asia:

Emerging markets also rebounded strongly this week after they were sold off on rising US interest rates and worries around Chinese tech companies.

Research round-up:

Estimates of ICO funds raised differ by the millions between ICO trackers: According to Bloomberg, the estimates of ICO fundraising this year fluctuate between $22b and $11b - depending on the data source.

Binance research on Loom: A Layer-2 scaling solution for Ethereum that is a network of DPoS sidechains, allowing for scalable user-facing dApps and games