Is it too late to buy BTC?

Thoughts of the Day

Bystanders who have never invested in Bitcoins may always feel like it’s too late to get involved. After all, just seven years ago, it was trading below $1,000, and this time last year, it was below $17,000, but it is now trading above $42,000.

So how much higher can it go? Subscribe to our daily and read the full report on our insights into crypto investing to find out why you are still early.

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Day Ahead

The Canadian Consumer Price Index is expected to show that prices rose +3.3% Year-on-Year in December, rising from +3.1% in November.

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What Happened Yesterday

Market Movements as of New York Close 15 Jan 24
  • The Japanese Producer Price Index surprised markets, showing that prices remained unchanged on an annual basis in December (vs -0.3% Year-on-Year expected), falling from +0.3% in November. On a monthly basis, producer prices rose + 0.3% (vs 0% expected) in December, the same as in November (revised from 0.2%).
  • The US stock and bond markets were closed due to Martin Luther King Jr. Day.
  • *(Market movements for the US Stock Indices are based on US stock futures.) The US stock futures remained in a range due to the lack of trading volume on MLK Jr. Day.
  • The crypto market edged up slightly on Monday as renewed interest in the crypto market remains.
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Headlines & Market Impact

China’s record crude, coal, iron ore imports don’t tell the whole story

Notable Snippet: China’s imports of crude oil, coal and iron ore all soared to record highs in 2023, but this seemingly strong performance by the world’s top commodity buyer comes with a few caveats.

Crude oil imports rose 11% in 2023 from the prior year to 11.28 million barrels per day (bpd), according to customs data released on Jan. 12.

This eclipsed the prior record of 10.81 million bpd from 2020, and came as China re-opened its economy after ending its strict zero-COVID policy at the end of 2022.

But is the gain in crude oil imports as impressive as it first appears?

In volume terms, 2023’s arrivals were 1.11 million bpd higher than those in 2022.

However, this is well below the forecast for a 1.8 million bpd increase in China’s oil demand from the International Energy Agency (IEA).

Of course, imports and total demand aren’t the same thing, but looking at the other factors at work in China’s crude oil market doesn’t offer much support to the bullish view.

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Japan’s Nikkei hits 34-year peak above 36,000 as shippers rally

Notable Snippet:   Japan’s Nikkei share average on Monday crossed the 36,000 mark for the first time in 34 years, powered by shippers and financials, with a retreat in U.S. bond yields and a stabilisation in the yen exchange rate buoying sentiment.

The Nikkei (.N225) finished the day nearly 1% higher at 35,901.73, after touching the highest since February 1990 at 36,008.23.

Value shares outperformed after lagging growth stocks last week when the Nikkei index booked its best performance in 22 months.

The broader Topix (.TOPX), which is less weighted towards technology shares than the Nikkei, rose 1.22% on the day and also touched a new 34-year high during the session.

The continued gains for Japanese stocks come despite signs of overheating. One closely watched technical indicator called the relative strength index, or RSI, climbed to 76.41 for the Nikkei, with readings above 70 signalling “overbought” conditions.

Providing another tailwind, after the close of Monday’s trading, the TSE will begin publishing a monthly list of companies that have disclosed plans to boost capital efficiency.

The TSE’s corporate governance initiatives are “generating a lot of excitement,” said Daniel Hurley, portfolio specialist of emerging market and Japan equities at T. Rowe Price.

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‘Very good chance’ that U.S. passes stablecoin laws this year, Circle CEO says

Notable Snippet: The CEO of Circle, the company behind popular stablecoin USD Coin, sees a strong chance that laws for stablecoin issuers like itself will come through in 2024.

Stablecoins, which allow traders to move in and out of crypto, are a $135.3 billion market — but they are for the most part unregulated. The U.S. is yet to pass federal crypto regulation, even as jurisdictions around the world are approving new crypto-focused laws.

But Jeremy Allaire, Circle’s boss and co-founder, hopes that things will change this year, stating that there is a “very good chance” U.S. lawmakers approve a stablecoin bill.

“I think what you’re seeing is a desire from the administration, a desire from the Treasury, from the [Federal Reserve], by both chambers of Congress, and certainly on a bipartisan basis,” Allaire told CNBC Monday.

“Digital dollars are happening around the world, other governments are regulating dollar-digital currencies before the United States. And so I think there is a very strong desire to act and assert U.S. leadership and get the right consumer protections involved,” Allaire added.  

Allaire was asked about the Clarity for Payment Stablecoins Act, which seeks to bring stablecoins within the same regulatory frameworks that govern traditional financial services companies.

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Phan Vee Leung
CIO & Founder, TrackRecord