Fair price for Bitcoin, the pound - worst week, artificial oil

21 maj 2019

JPMorgan Chase & Co analysts in connection with the rapid growth of the cryptocurrency market in recent times, and Bitcoin in particular, have thought about the question “what is its fair price?”, so-called intrinsic value. Determining the fundamental cost of cryptocurrency is a very difficult and highly ambiguous question, but considering Bitcoin as a commodity asset, you can simply calculate the amount of the cost of "its production" (electricity, the computing power of computers, equipment depreciation, etc.).

So, according to their calculations, the current price sharply exceeded the “cost price” of Bitcoin. This last happened in 2017. We know the result. Recall, any increase in cryptocurrency should be used for their sales – that is our position.

The pound remains under pressure. Actually, previous week was the worst for the pound since 2017. There was little chance that the Government will accept the deal. And the chair Theresa May is sitting on wobbling quite a lot. According to the polls, the most likely candidate is Boris Johnson. Property prices in the UK are continuing to decline, reflecting the concerns of investors and consumers about the results of Brexit. Given that there is no domestic political unity in the UK, the chances for a positive outcome in the near future are not visible. This means that the pound will continue to be under pressure. Like real estate prices in the country.

Oil price is growing. The reasons are the same - tensions in the Middle East and the potential threat of war with Iran. Despite the fact that the current desire of the market is to buy oil, we recommend looking for points for sales on the intraday basis as well as medium-term. Why? - some artificiality of the current market conditions. OPEC + has limited the offer, but this process is unnatural and at any time in the market may appear 1.2 million b / d above. The current position of Russia, that proposes not to rush to the issue of extending OPEC + after June is playing in its favor. At the same time forecasts for oil demand have become increasingly gloomy lately.

Important macroeconomic statistics will not be published today, so the events will probably continue to evolve in line with current trends.

Our trading positions for today are as follows: we will look for points for buying the euro against the US dollar. Points for selling oil and the Russian ruble and points for buying gold and the Japanese yen.