World markets tumble as digital currencies gain

LAWRENCE KEKETSO

The reality of markets’ digitisation is drawing nearer as major crypto investment instruments experience growth gains against dropping traditional market vehicles. According to reports, Tuesday this week marked yet another milestone in the market dynamics as world markets tumbled and major digital currencies were surging positively in the opposite direction.

Bitcoin rose to its highest level in more than a month as the broader US financial markets sold off Tuesday, CoinDesk reported, adding that the digital currency was trading near US$9,436 as of 4:21 p.m. ET, jumping nearly 20 percent in the past week. According to the report, Bitcoin is coming out of its worst quarter ever, when it lost about 48 percent of its value in three months.

The report continued that other financial markets were moving in the opposite direction of the cryptocurrency on Tuesday, hurt by rising interest rates and bearish comments from a conference call by Caterpillar, which is often seen as a bellwether for the US economy. The Dow Jones industrial average closed 400 points lower, representing more than 750 points drop from its session high to the lows of the day, while the S&P 500 fell 1.3 percent, and the Nasdaq composite declined 1.7 percent, the report showed.

According to market reports, other factors to have pushed the digital currency gains were research reports of major investment players in global markets considering going the digital route by next year as one of the major vehicles and an appealing alternative to push their value gains. Goldman Sachs Group, one of the leading players, also reported to have hired on Monday head of digital asset markets to help clients gain exposure to cryptocurrencies, saying cryptocurrency- focused hedge funds have continued to open amid the market slump earlier this year.

Bitcoin reached its highest level since March 14 on Tuesday but is still down more than 30 percent this year, according to CoinDesk, also adding that much of the digital currency’s drop in 2018 was attributed to investors selling to meet US tax obligations, regulatory scrutiny, and major tech companies banning advertisements for cryptocurrencies.

Other digital currencies also outperformed the broader markets, and all of the top 10 by market capitalisation were trading higher Tuesday, according to CoinMarketCap.com. Ethereum, the second largest cryptocurrency, rose 10 percent, while ripple was up more than seven percent, according to data from CoinDesk.

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