Bitcoin over $12k & Google sued!

GURU WISDOM

I’ve got some advice for the young: if you’ve got anything you really want to do, don’t wait until you’re 93.” – Charlie Munger
 

MARKETS

The euro made headway on Tuesday with EUR/USD making a new monthly high. Other crosses including EUR/GBP and EUR/JPY also broke out of recent ranges. Strong US housing data bolstered confidence in the global economy – as did the decision to hold rates steady in China. At the same time the EU received 150 billion euros in demand for the first SURE bond sale.

News that Ant financial, the payments spin-off of Alibaba was authorised to list in Hong Kong for what could be the world’s biggest ever IPO generated some enthusiasm in China and Hong Kong stock markets. 

Swiss bank UBS was a glimmer of hope in European stock markets after reporting a $2.1 billion third quarter profit. European indices were mixed with the DAX index down 0.9% while Italy’s FTSE MIB gained over 0.5%.

Wall Street rebounded on Tuesday, gaining back around three-quarters of Monday’s price drop as traders hang on the words of negotiators and the chances of a US stimulus bill. Shares of Google-parent Alphabet gained nearly 2% despite the department of Justice announcing it was suing the search-engine giant.
 

Bitcoin breakout

There is no single catalyst for the price breakout but Bitcoin has been moving steadily higher with signs that professionals are taking positions in anticipation of CBDC (central bank digital coin) adoption. We mentioned the one notable buyer when it happened – the $50 million investment by US digital payments platform Square ran by Twitter CEO Jack Dorsey. 


CBDCs would not be decentralised like Bitcoin but are highly centralised – issued directly by central banks – circumventing the usual process of commercial banks adding to the money supply via bank loans. While the CBDCs are in theory competitors to Bitcoin, they also legitimise the idea of digital currencies for use as a medium of exchange.
 

Google sued

The Department of Justice (DOJ) antitrust case against Google is very reminiscent of the case levelled against Microsoft in the 1990s. The DOJ is alleging Google has unlawfully maintained a monopoly in online search – the same accusation it made against Microsoft and its Windows operating system. The stock gained 2% as investors brushed off the news. After all, MS Windows still dominates PC operating systems with a 77% market share.