Cryptocurrency

WEEK AHEAD: The great Crypto sell-off, external reserves continue upward trend

by with No Comment Businessfinance

THE GREAT CRYPTO SELL-OFF

The coming week would be accompanied by bearish trend in the crypto-community. The Crypto is under intense selling pressure amid the recent sell-offs in the crypto-verse, as the fast-ever-changing Crypto market lost over $200 billion in value within a few hours.

READ ALSO: Cryptocurrency Ban: Turkey, says risks are too big

The flagship crypto was down by more than 5,000 dollars pulling back below $60,000.

The crypto market has shed much of its stellar gains earlier recorded, as significant selling pressure from crypto investors pushed the value of cryptos lower across the market spectrum amid profit-taking. The global crypto market value was thus put at $2.03 trillion, a 10.42% plunge from its previous position.

Other Crypto assets like XRP, Bitcoin Cash EOS, lost as much as 20% within a twinkle of the eyes. Market pundits argue that a likely factor for such intense drop was the relatively high funding rates for taking long positions on Bitcoin alongside a strong dark cloud built around the $64,000-$65,000 price level.

Adding credence to such bias is Cantering Clark, a popular crypto strategist, who added that recent data points to the market cooling off arbitrarily. “50k and 80k strikes highest contract/notional for $BTC I think these writers will be happy and I am still in the same opinion that the end of April – May begins the shift that makes Bitcoin a less favourable long. No breakout, just range and rotation.”

Crypto pundits are of the opinion that a market correction has long been overdue after the sudden bullish move. The bearish trend prevailing at the bitcoin market is largely attributed to a significant amount of profit-taking in play, on the account that Bitcoin’s realized profits are at record highs and is anticipated to linger in the coming week.

BEARS DOMINATE THE NSE BANKING INDEX

The NSE Banking Index traded bearish at the end of the Friday’s trading session. 6 banks posted Gains and 4 Losses were recorded. The NSE Banking Index finished red with a loss of -0.52% adding to the -0.97% held in the previous trading session. The index dropped to 343.03 index points at the close of trading activities today.

Sterling Bank posted a substantial loss of -9.76% adding to the -0.61% held at the previous trading session pushing the price downwards from N1.70 to N1.49 and leading the top losers in the NSE Banking index.

Zenith Bank also saw another loss of -1.38% adding to the -0.91% held in the previous session pushing the price from N22.00 to N21.80. Jaiz Bank lost some profit from the +6.67% held in the previous trading session by posting a loss of -1.56% settling the price at N0.63.

Fidelity Bank broke the stalemate held at the previous trading session to post a loss of -2.83% settling the price at N2.39 from N2.47. Union Bank posted profits of +2.20% to settle the price at N4.65. UBA also made gains of +2.21% pushing the price downwards to N6.95 from N6.80.

Wema Bank recovered from the decline in the previous session to post gains of (+1.79%) pushing the price to N0.58 from N0.55. GT Bank also posted a profit of +1.39% moving price from 28.75 to N29.15. Access Bank made a decisive move from its stalemate position with gains of +0.66% settling the price at N7.60. Ecobank made profits of (+1.04%) settling the price at N4.90.

Outlook for the coming week look promising as Market sentiment trends towards recovery as 6 companies in the NSE Banking Index made gains as opposed to 4 losses at the end of Friday’s trading session.

GRADUAL RECOVERY IN THE NIGERIAN STOCK EXCHANGE

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Bitcoin

Bitcoin Market Cap Hit $1trn, Above Apple, Amazon

by with No Comment Businessfinance

Bitcoin market capitalisation has notched the $1 trillion mark putting it ahead of Apple and Amazon.

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Data from cryptocurrency trading simulator, Crypto Parrot indicates that it took bitcoin just 12 years to hit the current capitalisation, the least time frame than four leading traditional assets.

Among the overviewed assets, Microsoft (MSFT) took almost half a century at 44 years to hit the $1 trillion valuations, representing 3.6 times more time than bitcoin. Apple (AAPL) required 42 years to hit the milestone, meaning bitcoin hit the mark 3.5 times faster than the electronics giant.

Elsewhere, it took Amazon (AMZN) 24 years to hit the $1 trillion in market capitalization representing double the period than bitcoin. Lastly, bitcoin took at least 1.75 times faster to hit the $1 trillion market cap when compared to Google’s (GOOG) 21 years.

The report explores the nature of growth between bitcoin and the highlighted mainstream assets over the past year.

“Based on bitcoin’s recent market cap rate growth, the asset will potentially surpass the highlighted traditional assets’ value at some point in the future. Although the technology stocks have soared from last year, none has been able to outperform bitcoin”, noted Crypto Parrot

Furthermore, as bitcoin adoption becomes more mainstream, it can amass a higher market cap than the traditional assets, according to the report “

“If bitcoin sustains the growth coupled with increased institutional adoption that will lower volatility, the market cap might surpass some mainstream assets. The achievement is possible considering the bitcoin market cap has exceeded other formidable players like Tesla.”

The adoption of bitcoin by institutions spells good fortunes for the asset in the future.

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Bitcoin

Visa joins cryptocurrency market, now allows crypto transaction, but not bitcoin

by with No Comment financeNews

Visa joins cryptocurrency market, now allows crypto transaction, but not bitcoin

Visa has become the latest payment company to accept cryptocurrency, as the firm made its first cryptocurrency transaction this month.

READ ALSO: 45% of N75bn MSMEs survival fund provided for women owned businesses

The incorporation of crypto into its payment options followed Mastercard plans to accept bitcoin.

Visa partnered with digital asset bank, Anchorage, to conduct its first transaction using Crypto.com to send USDC to Visa’s Ethereum address at Anchorage. Head of crypto at Visa, Cuy Sheffield, said the move was encouraged by consumer demand.

Sheffield said the company experienced an increase in customer demand, prompting the firm to conduct a test at an unspecified date. He stated that the company’s clients want product built in line with the digital asset.

Visa is not going in the same direction as most companies embracing cryptocurrency, as it preferred USD Coin (USDC), which is a stablecoin digital asset with a value pegged directly to the dollar.

READ ALSO: United States to make second bitcoin sales, as CBN refuses to innovate

Speaking on its entry into the crypto market, Sheffield said, “We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers”, he told Reuters on Monday.

Global payment companies are beginning to embrace cryptocurrency as it becomes popular among investors and online shoppers.

Although, in Nigeria, payment companies are still keeping distance due to the Central Bank of Nigeria’s ban on crypto transactions.

Aside from payment firms, manufacturers and service providers are also stepping into the market.

Last week, Tesla founder, Elon Musk had announced that his automaker will now accept cryptocurrency as payment for its vehicles.

Musk said bitcoin is the preferred crypto, as he and the company bet big on bitcoin becoming a traditional payment option in the future.

He said Tesla will remain exposed to crypto through bitcoin, as payment made will not be converted into fiat.

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Cryptocurrency

CBN Denies Placing New Restrictions On Cryptocurrency.

by with No Comment financeNews

The Governor of the Central Bank of Nigeria, (CBN), Gowin Emefiele has denied that the apex bank place new restrictions on the use of cryptocurrency noting that the recent directive was to protect the financial system and generality of Nigeria from the risk inherent in crypto-asset transactions.

READ ALSO: CBN: Digital economy to drive growth, create jobs

CBN in a directive to financial institutions barred banks and other financial institutions in the country from facilitating cryptocurrency. The bank regulator had on February 5, 2021, sent a letter to all local financial institutions to shut down all bank accounts associated with cryptocurrency trading platforms.

This directive generated uproar some quarters and economic analysts who commended the commitment towards building a digital economy.

The CBN Governor in a keynote address at the 30th Seminar for Finance Correspondents and Business Editor over the weekend explained that the directive was not new but only amplified an earlier regulation on the subject of cryptocurrency.

“The recent directive became necessary to protect the financial system and the generality of Nigerian from the risk inherent in crypto-asset transactions, which have escalated in recent time, with consequences on financial stability and implementation of monetary policy.”

He however added, ” our policy does not preclude Nigerian from harnessing the underlying technology that supports crypto transactions, which is distributed ledger, commonly referred to as a blockchain.”

Emefiele disclosed further that there are several examples where blockchain technology has been used to facilitate and improve transparency in the settlement of trade transactions.

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OIL PRICES

WEEK AHEAD: More of same for naira, Bitcoin rally to continue

by with No Comment financeNews

More of same for Naira

The Naira closed at N411.88 on the I&E window, a 0.21 per cent depreciation from N411.00 which it closed at the previous session on Friday, according to data from the FMDQ Security Exchange.

READ ALSO: CBN to phase out old cheques March 31

The currency also lost at the parallel market as data posted on abokiFX.com, a website that collates parallel market rates, showed that the currency closed at N482.00, a 0.42 per cent depreciation from N480.00 as it exchanged hands on Friday. As a result of this, the spread between the unofficial market and the I&E window exchange rate is pegged at N70.12, which translates to a gap of 14.54 per cent. A look at the data tracked from FMDQ indicated that forex turnover increased from $36.92  million recorded on Wednesday, March 10, 2021, to $192.11 million on Thursday, March 11, 2021, being the highest dollar supply recorded in two weeks. However, the coming week wouldn’t be any different as the Naira is anticipated to continue to fluctuate around the threshold of N406/$1 and N412/$1.

Bitcoin’s bullish trend intensifies

It’s no longer news that the world’s most popular crypto has got its mojo back, but what seems to be news is that leading crypto experts are anticipating that the bullish rally is still in its early stages amid the fact that it has risen more than eighteen folds within a year. The crypto soared higher on Saturday and was trading at $61,050.29 with a daily trading volume of about $60 Billion. Bitcoin is up 23% for the week. It’s currently the most valuable crypto with a market value of $1.14 Trillion.

The flagship crypto’s importance for “commerce on the internet” has also helped its credence among a significant number of millennials globally. Its important to note that the strong holding fundamentals that have kept the flagship crypto above the $55,000 price levels in the past few days are the strong hands that came in to buy this latest dip. Finally, it’s key to note that Bitcoin is becoming very scarce, amid the bias that its present supplies are arbitrarily squeezed by strong institutional buying, as recent data reveal Bitcoin’s supply has been dropping for 12 months. Also, recent developments indicate that Zugacoin Cryptocurrency, founded by a Nigerian, Naira can now be comfortably used to purchase any type of vehicle, motorcycles, plastics and all the other products under the INNOSON Group anywhere in the world. This follows the sealing of a business partnership deal between Archbishop SamZuga of Zugacoin and Chief Dr Innocent Chukwuma of Innoson vehicle manufacturing company on Saturday, March 13, 2021. With these dynamics in play, the week ahead looks promising for the flagship crypto (Bitcoin) amongst others.

Oil prices continue rally

Brent Crude oil on Thursday 11th March 2021 gained momentum as it rose by 2.55% to close at $69.63, indicating a recovery from its slump recorded on Monday and Tuesday. The price of Brent Crude had topped $70 per barrel in the early hours of Monday this week before sliding down on account of the news of an attack by rebel Houthi rebel on the Saudi oil infrastructure on Sunday. The recent increase in oil price can be attributed to OPEC+’s decision to maintain the current production cuts for another month. According to the Foreign Minister of Saudi Arabia, Prince Faisal bin Farhan, while speaking after a meeting with his counterpart from Russia, Sergey Lavrov, the Organisation of Petroleum Exporting Countries is looking for a “fair” price for its crude. Afterward, Lavrov noted that the OPEC+ alliance was strong and there was nothing that could at this point undermine the good working relationship between Russia and Saudi Arabia. This is a strong indication that both parties are in synergy towards ensuring that Crude oil price continues its current bullish run, hence good news for oil in the week ahead.

External reserves on steady dip

Nigeria’s external reserve declined by 0.13% to stand at $34.67 on Wednesday, 10th March 2021 being a record low in 10 months. The country’s external reserve declined from $34.71 billion recorded as of Tuesday, 9th March 2021 to stand at $34.67 billion as of 10th March 2021. Nigeria’s current external reserve position indicates a total loss of $433.68 million in the month of March 2021. With the current unattractive investment environment coupled with the ripple effects of the COVID19 pandemic, Naira FPI’s aren’t likely to be motivated any time soon, hence depletion of our external reserve is most likely to persist in the week ahead.

NSE-30 companies post N1.13trn loss year to date

The top 30 companies listed on the Nigerian Stock Exchange (NSE) known as the NSE-30 have lost a total of N1.13 trillion in market capitalization year to date. The elite list, which consists of the top 30 companies in terms of market capitalization and liquidity, recorded a decline of 6.66% in market capitalisation from N17.00 trillion recorded as of 31st December 2020 to stand at N15.87 trillion as of 12th March 2021.