A Deeper Look at what’s driving Bitcoin’s Growth?

1. Institutional Adoption

Major financial institutions are embracing Bitcoin at an unprecedented scale. Significant inflows into Bitcoin-focused exchange-traded funds (ETFs) underscore this shift. For instance, BlackRock’s Bitcoin ETF has attracted substantial assets, highlighting surging institutional interest. This endorsement from traditional financial powerhouses validates Bitcoin as a mainstream asset class.

2. Regulatory Developments

A crypto-friendly regulatory environment is bolstering market confidence. Notably, President-elect Donald Trump’s nomination of Paul Atkins—a pro-crypto advocate—as head of the SEC has sparked optimism for clear, supportive policies. Regulatory clarity is paving the way for broader market participation and innovation.

3. Market Sentiment

Statements from influential figures like Federal Reserve Chair Jerome Powell, who compared Bitcoin to “digital gold,” are solidifying its role as a store of value. This legitimization is boosting investor confidence and attracting capital from both retail and institutional investors.

What Comes Next for Bitcoin?

Bitcoin’s journey past $100,000 is just the beginning, with exciting opportunities and challenges on the horizon:

• Continued Growth: Analysts predict Bitcoin could surpass $200,000 by 2025, driven by global adoption and use as a payment system and hedge against unstable currencies.

• Regulatory Developments: While recent regulations are encouraging, the market’s future depends on clear global frameworks for trading, taxation, and security.

• Market Volatility: Bitcoin’s history shows that major price milestones often lead to corrections. Investors should prepare for fluctuations as the market adjusts to new demand levels.

• Competition and Innovation: Bitcoin faces growing competition from Ethereum and emerging blockchain technologies. Innovations like DeFi and NFTs could shift focus toward alternative cryptocurrencies.

• Environmental Pressures: Bitcoin mining’s energy consumption remains a challenge. The industry must move toward sustainability, which could reshape mining practices and supply dynamics.

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The post What’s Next For Bitcoin After Hitting $100,000? first appeared on IC Markets | Official Blog.

Currency Trades
The dollar, in general, should rally further in the days and weeks ahead as the FX world prices in more inflationary conditions in the US. However, there are some clear pairs that many traders will be looking at:

• USD/CNH: Trump has not been quiet about his plans to impose substantial tariffs on China, and there should be potential for most topside gains in this pair as the next few sessions unfold.
• USD/MXN: Mexico is also in Trump’s sights, and traders are expecting to see further downside for the MXN against the dollar and on the crosses.
• EUR/USD: The Euro could take a lot more pain for a few reasons. Not only will tariffs hit European goods coming into the US, but as the world’s most traded currency pair, it is vulnerable to more volume hitting it as a reflection of dollar strength.

Stocks
US Indices:
They have reacted well in the initial aftermath of the Republican victory, with surging moves—especially for financials, which should benefit from looser regulation. However, there is some concern that tech stocks, particularly those linked with China, could be in for tough times ahead.

Global Indices:
As with US stocks, it looks like being a case of picking and choosing strong sectors for the months ahead as Trump’s policies are implemented and their impact is felt. Clearly, Chinese and European bourses may struggle if tariffs are as hard as the President has promised.

Cryptocurrencies
Trump has been a strong advocate of cryptocurrencies, and they have surged since the result came through yesterday, with Bitcoin driving to new record highs. Investors are expecting crypto to remain in vogue both as currencies and from a stock perspective moving forward, and will be paying close attention to plans from the new government.

The post Trump Victory to Reverberate Around Markets first appeared on IC Markets | Official Blog.

What does Biden’s withdrawal mean for the 2024 election? Here’s our analysis of the potential market reactions and shifts following his announcement.

Will Biden’s Withdrawal Strengthen the Democrats’ Chances in November?

In recent weeks, financial markets have been increasingly factoring in a higher likelihood of Donald Trump securing a second term in November. This sentiment has been fuelled by Joe Biden’s poor performance in the recent debate and the failed assassination attempt last weekend. Many commentators now believe that with Biden out of the race, Kamala Harris will provide a stronger challenge to Donald Trump.

Who Will Take Over?

The longer-term market reaction will largely depend on who is perceived to have a better chance of winning the election and how this is priced in over the next few months. We will experience a few weeks of uncertainty, as the Democratic nominee will not be confirmed until the party’s national convention, scheduled to begin on August 19. Currently, Kamala Harris, Biden’s running mate, is the hot favourite, benefiting from his personal endorsement and the financial support initially raised for his campaign.

Biden’s Move Was Expected by the Market – But What Happens Now?

There had been growing calls for Joe Biden to step down, and his withdrawal has cast doubt on some of the ‘Trump Trade’ strategies. The initial market reaction has been relatively subdued: gold prices have risen, and there was a brief sell-off in major FX pairs, which has since largely reversed. 

However, stronger reactions are expected once markets in London and New York open, and further US updates emerge. US stocks have been under pressure recently, exacerbated by a global cyber outage on Friday. Biden’s announcement has added fresh uncertainty, potentially pushing major indices lower. Investors will also be watching for earnings reports from Tesla and Alphabet this week, which could significantly influence the market.

What is the ‘Trump Trade’ and Its Future?

The ‘Trump Trade’ refers to market reactions anticipating a second term for Donald Trump, generally expecting looser fiscal policy, higher trade tariffs, and weaker regulations. Despite Trump’s recent comments about a lower dollar, these policies would typically lead to inflationary pressures, higher US yields, and a stronger dollar. If the Democrats are seen as strong contenders against Trump, expect increased market volatility and a potential unwinding of these moves. Conversely, if Trump continues to lead in the polls, volatility may decrease, and the ‘Trump Trade’ could gain momentum.

The post Biden’s Withdrawal: What It Means for the 2024 Election and Market Reactions first appeared on IC Markets | Official Blog.

The recent assassination attempt on Donald Trump has had a significant financial impact, with the U.S. markets demonstrating resilience, closing higher on Monday, July 15, 2024. The Dow Jones Industrial Average rose by 0.6%, reaching a new record high, driven by recent inflation data and Friday’s historic close above 40,000. Additionally, the S&P 500 gained 0.3%, while the Nasdaq Composite added 0.4%.

Looking ahead, the election is set to influence several key sectors, including financial, renewable energy, traditional fuels, and healthcare. Understanding these potential impacts can help investors better navigate their portfolios in the months ahead.

Financial Sector

Under a potential second Trump administration, UBS predicts a relaxation of capital and liquidity regulations. This regulatory easing is expected to benefit major banks like JPMorgan Chase, Bank of America, and Wells Fargo, and extend advantages to smaller lenders such as Discover Financial, KeyCorp, and Synchrony Financial.

Solar Stocks Outlook

Experts caution that Republican opposition to green initiatives, supported by Trump, could jeopardise $1 Trillion in low-carbon energy investments incentivised by the 2022 Inflation Reduction Act. Conversely, UBS expects a second Democratic administration to maintain these incentives, potentially benefiting solar manufacturers like First Solar, NextEra Energy, and Sunrun.

Clean Energy vs. Oil Companies

Under a Democratic administration, continued support for electrification and green hydrogen production could benefit companies like Eaton, Quanta Services, Tesla, and Air Products and Chemicals. Incentives would also favour manufacturers of energy-efficient products, such as Johnson Controls and Trane Technologies, and waste management firms with strong recycling infrastructure, like Waste Management and Republic Services.

Conversely, a Trump administration could stimulate the oil and natural gas sectors with increased investments, drilling activity, and higher natural gas exports, benefiting producers such as Exxon Mobil, Cheniere Energy, and ConocoPhillips.

Healthcare

Historically, healthcare stocks tend to underperform as investors anticipate reform. However, this year, they have kept pace with the broader market, returning 8.9% compared to the S&P 500 Index’s 10.6%. 

Total healthcare expenditure is expected to rise under both administrations, focusing on reducing medical inflation. A Democratic win could benefit the sector the most, with healthcare spending projected to reach 16.9% of US GDP by 2028. As a result, big pharma companies including Eli Lilly & Co, Thermo-Fisher Scientific Inc., Amgen Inc., Merck & Co, and Johnson & Johnson should continue to grow.

The post Could the Upcoming US Election Impact Your Portfolio? first appeared on IC Markets | Official Blog.

With a remarkable 3.5% increase in shares on Tuesday, Nvidia’s market capitalisation now stands at an impressive $3.4 trillion USD, firmly establishing its leadership position.

Market Impact

As investor interest in AI continues to grow, Nvidia’s leading position in AI technology positions it as a key player in this technological revolution. The company’s revenue consistently triples each quarter, and its stock has surged by nearly 174% this year.

Nvidia’s success has had a significant impact on the stock market, with both the S&P 500 and Nasdaq reaching new records. The S&P rose by 0.25%, and the Nasdaq added 0.03%. Nvidia’s performance has been a major driver of these gains, accounting for almost a third of the index’s rise through May.

What’s Next?

Nvidia’s future appears promising, with Wall Street analysts setting an optimistic price target of $160 per share. If achieved, this could elevate Nvidia’s valuation to an unprecedented $4 trillion. 

This projection underscores the sustained interest and confidence in Nvidia’s growth trajectory. Financial analyst Sarah Thompson further emphasised this sentiment, stating, “Demand is showing no signs of switching off,” highlighting the ongoing conviction in Nvidia’s future prospects.

The post Nvidia: Takes the Lead as the World’s Most Valuable Public Company first appeared on IC Markets | Official Blog.

The chipmaker’s shares saw a climb of 5.16% on Wednesday ahead of the much-anticipated stock split scheduled for Friday. This surge is part of a larger trend, following a robust May 2024 Earnings Report, that propelled the stock by 28%. Nvidia’s performance is a clear indication of investor confidence and the company’s strategic positioning in the tech industry.

While Nvidia has made headlines by surpassing Apple, Microsoft Corporation still holds the top spot as the world’s most valuable with a market capitalisation of $3.15 trillion. 

Nvidia’s announcement of a 10-1 stock split for June 10 underscores the company’s intent to make its shares more accessible to a broader range of investors. This move reflects Nvidia’s confidence in its financial health and future prospects, aimed at enhancing shareholder value. By reducing the price per share, the stock split facilitates easier acquisition for individual investors, potentially expanding the shareholder base and increasing market liquidity. 

With the demand for Artificial Intelligence technology on the rise, Nvidia is poised to maintain its growth momentum, as shown by its stock soaring 2,800% in the last five years. 

The post NVIDIA Overtakes Apple as the second-most valuable company first appeared on IC Markets | Official Blog.

On 22 May 2024, NVIDIA’s earnings announcement sent ripples through the financial markets, with its share price increasing by 6% in after-hours trading. The company reports record-breaking revenue of $26 billion for Q1 2024, an impressive 18% increase from the previous year. This growth underscores NVIDIA’s robust market position and its ability to harness the surging demand for AI and gaming technologies. Additionally, the company’s net income also saw a boost, increasing to $1.91 billion compared to $1.29 billion in Q1 2023. Again, this increase could be attributed to NVIDIA’s efficient cost management and strategic investments in high-growth areas. 

What’s next for NVIDIA?

Broadly speaking, this earnings report solidifies NVIDIA’s position as a leader in AI hardware. The company provided a strong outlook for the next quarter, forecasting revenue growth to somewhere around $28 billion. Gross margins are expected to increase to between 74.8% and 75.5%, while costs are anticipated to rise in the low 40% range, highlighting NVIDIA’s status as a growth stock. 

As founder and CEO of NVIDIA, Jensen Huang aptly stated: “the next industrial revolution has begun” alluding to strong continued company performance. “AI will bring significant productivity gains to nearly every industry and help companies be more cost and energy efficient while expanding revenue opportunities.”

What’s next for AI?

AI is here to stay and is transforming everything from the way we work to the way we play. The strong earnings report suggests that AI will continue to grow and expand to new areas such as healthcare and industries. With its cutting-edge technologies and strategic vision, NVIDIA is well-positioned to lead the charge in this new era of technological innovation.

The post NVIDIA Earnings Report Q1 2024: What You Need To Know first appeared on IC Markets | Official Blog.

What is the RSI?

The RSI is a momentum oscillator that helps traders gauge the speed and change of price movements. Developed by J. Welles Wilder, it’s a widely respected indicator in technical analysis. RSI is measured on a scale from 0 to 100, with readings above 70 indicating that an asset may be overbought and readings below 30 suggesting it might be oversold.

When to Use RSI:

1. Identifying Overbought and Oversold Conditions: RSI is particularly useful for recognizing when an asset’s price has moved too far in one direction. A reading above 70 suggests the asset might be overbought and could experience a pullback. Conversely, an RSI below 30 implies oversold conditions, potentially indicating a buying opportunity.

2. Confirming Trends: RSI can help confirm the existence of a trend. In an uptrend, RSI readings typically remain above 50, while in a downtrend, they tend to stay below 50. This can provide traders with additional confidence in the direction of a trend.

3. Spotting Divergences: Divergences between RSI and price movements can be strong reversal signals. For example, if an asset makes a higher high while RSI forms a lower high, it suggests weakening upward momentum.

How RSI is Measured:

The RSI is calculated using the following formula:

RSI = 100 – (100 / (1 + RS))

Where:

– RS (Relative Strength) is calculated as the average gain over a specified period divided by the average loss over the same period.

How to Use RSI Effectively:

1. Divergence Confirmation: When RSI and price diverge, be cautious of potential reversals. A bullish divergence (higher RSI, lower price) can signal a potential upward move, while a bearish divergence (lower RSI, higher price) might indicate a reversal downward.

2. Confirmation with Other Indicators: RSI is most potent when used in conjunction with other technical indicators, such as moving averages or trendlines, to confirm trading signals.

3. Overbought and Oversold Zones: While RSI can remain in overbought or oversold territory for extended periods in strong trends, it’s crucial to use these zones in conjunction with other signals for confirmation.

Common Mistakes to Avoid:

1. Ignoring Other Factors: RSI is just one tool in your trading toolkit. Relying solely on RSI without considering other technical indicators, fundamental analysis, or market news can be risky.

2. Overtrading: Avoid the temptation to make trades solely based on RSI readings. Always consider the broader context and have a comprehensive trading strategy.

3. Neglecting Risk Management: Implement stop-loss orders to protect your capital. RSI can help identify potential entry points, but it doesn’t guarantee a profitable trade.

In conclusion, the Relative Strength Index is a valuable tool for traders, offering insights into momentum and potential reversals. When used wisely, RSI can be a powerful aid in decision-making. However, like any tool, it’s most effective when combined with other forms of analysis and used within a well-thought-out trading plan. Avoid common pitfalls, and the RSI can become a valuable addition to your trading arsenal.

The post A Guide to the Relative Strength Index (RSI) first appeared on IC Markets | Official Blog.

The participants of the Forex market include banks, corporations, institutional investors, hedge funds and individuals. In simple terms Forex trading is where you can buy and sell currencies, simultaneously. The way it works is much like the process of currency exchange at airports or hotels where you can exchange the currency you deal with for the local currency.

The Forex market is open 24 hours a day 5 days a week, enabling traders to buy and sell around the clock acting on global news events as they happen.

IC Markets allows individual traders the opportunity to access currency prices previously only available to large institutions and wealthy individuals.

The post What is Forex? first appeared on IC Markets | Official Blog.