Where will the price of cryptocurrency go next?

Last week was the test time for Bitcoin and other cryptocurrencies.

After Tesla CEO Elon Musk vigorously promoted the token and won the support of online fans in the market, Tesla CEO Elon Musk changed the acceptance of Bitcoin Currency as its payment plan for electric vehicles.

However, after the People’s Bank of China issued a warning to Chinese financial institutions prohibiting the use of digital currencies for payments, prices fell as much as 30% in the middle of the week-the news was reiterated a few days later. The Chinese authorities have also launched a crackdown on Bitcoin “mining”, which is the process by which computers unlock coins.

In addition, global regulators are stepping up their sense of control over this slightly regulated industry, and US tax and monetary authorities, including Federal Reserve Chairman Jay Powell, have also hinted at repressive actions.

In recent days, the broader stock and bond markets have shown a certain degree of sensitivity to the trend of Bitcoin, which shows that from a marginal point of view, the development of Bitcoin may affect the broader market.

The way forward is unclear. The plunge in the price of Bitcoin and other cryptocurrencies last week was reversed only when Musk tweeted his support for the asset class and indicated that Tesla had no intention of selling his shares.

Musk’s famous unpredictable online news means that it is difficult to predict what will happen next in this increasingly tight market. Mark Dowding, Chief Investment Officer of BlueBay Asset, said: “In some ways, Jay Powell and his colleagues seem to obey Elon Musk as the true king of the central bank. , The market seems happy to follow his orders.” Management. Dowding added: “For Musk and his followers, hope did not shed all the tears.” Katie Martin

How fast is the German economy rebounding?

Two surveys conducted this week showed that after Germany’s growth rate was the weakest among the largest economies in the Eurozone, it rebounded quickly, shrinking by 1.7% from the previous quarter.

Since the end of March, due to accelerate Vaccination plans, the cancellation of some coronavirus containment measures and a surge in export orders from manufacturers.

Economists believe that these two surveys will raise people’s expectations of economic recovery in the second quarter. These two surveys are the business environment report from the German ifo Institute on Tuesday, and the other survey is from the German Financial Market Research on Thursday. The company’s (GfK) consumer confidence survey.

Carsten Brzeski, head of macro research at ING, said: “Starting from a low base, we should get growth in private consumption. The development of the construction industry may be stagnant, and production is expected to reach the highest record in manufacturing history. All factors have experienced a substantial growth rebound.”

A Reuters survey of economists shows that Ifo’s business climate indicators are expected to reach their highest level since May 2019, while GfK’s survey is expected to reach a seven-month high.

However, German companies face More and more destruction Ifo found that it reached its highest level in 30 years last month.

In contrast, high-frequency data (such as Google Mobility data) shows that German consumers visit entertainment venues and leisure venues more frequently, while their consumption Surge May approached pre-pandemic levels. Martin Arnold

How long can gold recovery last?

Due to concerns about inflation and the weakening of the U.S. dollar, the price of gold reached its highest level in four months on May 19th. A sharp decline The price of Bitcoin.

Since then, the metal has been on the rise Blow At the beginning of March, the price of gold fell to its lowest level in more than eight months, at US$1,707 per ounce. At that time, signs of global economic recovery weakened its appeal. On Wednesday, the price of gold once hit a four-month high of US$1,887 per ounce, and fell only slightly to US$1,878 by Friday.

Like many other parts of the financial market, its path to development depends on the prospects for economic growth and inflation. Generally, investors view gold as a hedge against inflation. Therefore, the rise in consumer prices should play a supporting role. The rise in consumer prices in the United States is the fastest since last month.

However, the fact that can make up for this is that dynamic global growth is bound to weaken people’s attractiveness to safe haven metals.

Julius Baer analyst Carsten Menke said that the latest round of US government inflation stimulus measures have mixed effects on gold.

Menke added: “Since we expect global growth to recover, even if the inflation rate may be too high in the short term, we believe that gold and silver prices will face downside, not upside.”

Capital Economics agreed, saying it expects the price of gold to reach $1,600 per ounce by the end of the year. Henry Sanderson