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Daily Market News: Dow plunge, Yuan devaluation


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Mati Greenspan, Senior Market Analyst at FX broker eToro, has provided his daily commentary on traditional and crypto markets for August 6, 2019. The text below is an excerpt and does not contain the full analysis.


Hi Everyone,

We’ve got Tezos!!

Seems like a really cool blockchain. Like Libra, the Tezos company is headquartered in Switzerland. Their ICO, however, raised a record $232m in 2017.

The main focus of this unique blockchain is smart contracts and security token offerings, which is right in line with one of our goals in eToro to help tokenize all financial assets.

It does seem like they’re well on their way too. As recently as last month, Tezos partnered with Dalma Capital, one of Brazil’s largest banks, in a potential billion-dollar deal.

As far as price, it is one of the best performing cryptos this year with a total gain of 331% from January 1st until today. The token is also strongly positioned as one that will benefit greatly if we do see more crypto-friendly regulations in the United States.

Today’s Highlights

  • US Markets Slide: With the Dow’s slide of 8%, the question now becomes will the price turn around from here or will we head towards the lows from December?
  • US-China Trade War: For the first time since the financial crisis, the USDCNH surpassed 7 Yuan to the Dollar.
  • The Reason for Bitcoin’s Rally: Some people may say it’s a direct result of the falling Yuan, but it’s possible the prospect of a no-deal Brexit has a role in the rally.
  • Litecoin’s Halving Success: The production of Litecoin’s new coins dropped in half, as the price per coin has tripled since December.

Please note: All data, figures & graphs are valid as of August 6th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The Dow’s slide of 8% can be seen below. On Friday we mentioned a fair chance of testing the 200 DMA (blue line), a level that we’ve been toying with today.

As you can see, we’re getting a bit of a bounce this morning and the question now becomes will the price turn around from here or will we head towards the lows from December?

More than Seven

The US-China trade war reached a milestone too as the USDCNH surpassed 7 Yuan to the Dollar for the first time since the financial crisis.

Bitcoin Connection?

Some people have gone so far as to say that the rally we had in bitcoin is a direct result of the falling Yuan. Of course, this is one possible explanation, but so is Brexit for that matter.

The possibility of a no-deal Brexit could very well have people hedging themselves against the potential of another large leg down for the Pound Sterling.

Due to the anonymous nature of bitcoin, it’s extremely difficult to tell exactly where the demand is coming from. The supply factors of course, have not changed by much.

The supply side has however changed for Litecoin over the weekend, who has seen a very successful block reward halving event. There was a minor pop in the price of LTC around the event but it’s now back to where it’s been holding steady for the last few weeks.

All in all, Litecoin is up 333% since the mid-December lows, making the run up to the halving fairly significant. As we’ve been saying, these type of things have a tendency to get priced into the markets well before they occur and in this case we can see the production of new coins dropped in half and the price per coin has tripled.

Let’s have an awesome day!


Mati Greenspan can be found on LinkedInTwitter, or etoro

This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.

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Daily Market News: Dow plunge, Yuan devaluation

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