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Bitcoin investors dig in for long haul in ‘staggering’ shift

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As bitcoin heads into 2022, a growing cohort of long-term investors is doubling down on its stashes of the cryptocurrency, hoping a December dip was merely a festive blip.

Some industry watchers point to the underlying stability of such long-term investments as potentially promising indicators for the capricious cryptocurrency.

Since last July, for example, the amount of bitcoin held in digital wallets with no outflows for more than five months has been steadily increasing, according to digital currency brokerage Genesis Trading.

In addition, the amount of the bitcoin held in “illiquid” wallets – which spend less than quarter of their inflows – is also rising, meaning fewer coin are being actively traded, it added, citing wallet data across several exchanges.

“The number of bitcoins that haven’t moved in over a year has been climbing since July,” said Noelle Acheson, head of market insights at Genesis Trading. “That’s pretty staggering.”

Many investors were nonetheless sent diving for cover in December when the world’s most popular cryptocurrency sunk almost 20%, roughly the same as the second-biggest coin ether, with risk appetite hit by inflation fears and a quicker pace of interest rate hikes from the U.S. Federal Reserve.

While bitcoin and ether both posted gains last week – up 2.9% to $43,107 and up 6.3% to $3,350, respectively – they are still some way off their 2021 highs of $69,000 and $4,868

‘STRONG HANDS’

Many cryptocurrency experts caution that no one has been known to reliably predict bitcoin’s characteristically wild price swings. In 2017, for example, it went from about $1,000 to around $20,000. In early 2020, it sunk below $4,000 at one point before beginning a dizzying rise.

Yet advocates of bitcoin and other coins say the increasing acceptance of cryptocurrencies in mainstream financial and investing in recent years has shored up the sector.

Cryptocurrency research firm Delphi Digital said their research showed a similar shift towards bitcoin being held for longer period by investors, which it said “illustrates a transference from shorter-term ‘weak hands’ to long-term ‘strong hands’.”

Crypto data platform Coinglass’s bitcoin Fear & Greed index, has wavered between 10 and 29 since the start of the year, which could be an indicator of a possible market bottom and buying opportunities, according to Will Hamilton, head of trading & research at Trovio Capital Management.

“Previous market bottoms in July 2021 and March 2020 correlated with Fear and Greed scores of 19 and 10 respectively,” he added.

For the uninitiated, 0 indicates “extreme fear” and 100 is “extreme greed”

MUSK AND DOGE

There were, meanwhile, more headlines for cryptocurrencies last week.

Meme-based dogecoin stole the spotlight after Tesla CEO Elon Musk tweeted that the company would accept it as payment for select merchandise.

The tweet sent dogecoin up nearly 12%.

“If more people are looking to buy Tesla merchandise with dogecoin then there’s more demand,” Acheson said, adding that this move could improve fundamental factors for dogecoin.

Cryptocurrency Solana was another altcoin in focus, with Bank of America analysts saying the Solana blockchain could pull market share away from ethereum and “could become the Visa of the digital asset ecosystem”.

Elsewhere, bitcoin miners bounced back from mining crackdowns in China and the recent unrest in Kazakhstan, one of the world’s primary centres for bitcoin mining.

Bitcoin’s mean “hash rate” a measure of the power of the bitcoin computing network, touched an all time high of over 215 million terahashes per second on Thursday, according to blockchain data provider Glassnode.

 

(Reporting by Medha Singh and Lisa Mattackal in Bengaluru; Editing by Vidya Ranganathan and Pravin Char)

Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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