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Rally in the cryptocurrency market

Аналитика финансовых и товарных рынков

Market Watch review. 14.04.2021.

In today's release, we’ll cover the following topics:

  • Bitcoin and Ethereum set new records.
  • Bank of England redeems debt obligations.
  • Worsening sentiment in the German business environment.

Updating historical highs by any asset is considered a landmark event, but not in the current year. Starting from the main US stock indices and up to the majority of cryptocurrencies, we observe periodic updates of extrema, because each subsequent maximum is a new achievement, a new point in history. In fact, this is exactly what happened on Tuesday, Bitcoin and Ethereum were growing in anticipation of the Coinbase IPO, which is scheduled for today. But the listing of the largest US cryptocurrency exchange on the Nasdaq exchange is considered a landmark event.

An IPO or initial public offering of a cryptocurrency exchange indicates an obvious victory and, to a certain extent, a level of trust and recognition among investors. The high activity of buyers among different levels of investors remains one of the most objective confirmations of their trust. While the largest companies, such as Tesla, Mastercard and a number of others, already accept payments and invest in cryptocurrencies. All this continues to support the main coins and the digital currency market in general.

And now let's move on to more familiar and, as we used to say, traditional assets. I will start with the debt market and here the Bank of England attracted some attention. According to the Debt Management Agency, the share of the central bank in British bonds exceeded 30%. The reason for the rapid growth of government debt remains the quantitative easing program, according to which the regulator will buy out 150 billion pounds sterling this year.

Of course, further growth of the balance sheet of the British regulator will reduce its stability and reliability. Therefore, a number of analysts are already talking about the high probability of early reduction of the quantitative easing program - it is a direct tightening of monetary policy, and therefore is a bullish fundamental factor for the British currency, which is likely to activate closer to the end of the year.

We should also pay attention to the report on the change in business sentiment in Germany and the currency bloc as a whole published on Tuesday. Economists had expected the German index to rise above 79 points, but in fact we can see its decrease to 70.7 points. The situation is similar with the index that shows the overall situation in the Eurozone. Considerable sales of EUR/USD currency pair didn't occur, but it is important to understand that this is a bad signal for the whole region.

Closely monitor the news background and be prepared for all the surprises of the market.


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