Weekly review: A terrible week for cryptos, or was it?

Benjamin Weiss, Friday, 17 July 2020

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In a week that promised a lot in terms of high-impact data releases, we saw an unprecedented, adhoc event steal the headlines. This week’s Twitter hacking trusted Bitcoin into the spotlight for all the wrong reasons, but looking back, has it really turned out that badly for the cryptocurrency? Elsewhere, the European Central Bank shed light on its current monetary policy situation and Pret a Manger just got cheaper. Here’s your review of this week in the markets.

Bitcoin hack

Bitcoin is never too far away from a scandal. Since its inception the crypto has been notorious for wallet hacks and cheap scams that have conned people out of millions of pounds worth of Btc.

And this week, one of the biggest cyber attacks (in terms of profile and stature) took place on Twitter. For a short time, the world was deprived of the insightful tweets from the likes of Kim Kardashian, Kayne West and Donald Trump as the unknown hackers gained access to numerous accounts. Elon Musk, Joe Biden and Bill Gates were all also hacked along with a few major company accounts, with tweets being sent out via their official, verified Twitter profiles.

The now-deleted tweets all followed a similar tone and structure, asking followers to send money (Bitcoin) to an address, which would then be doubled and sent back to the sender. It’s not sure exactly how many people were exploited as a result of the hacks, but given the followings of just the people that were hacked combined has an outreach of nearly 400 million, we can assume a fair few fell victim.

Twitter Account

Followers (millions)

Donald Trump

83.6

Kim Kardashian

65.7

Kayne West

29.8

Elon Musk

36.9

Joe Biden

6.9

Bill Gates

51.2

Barack Obama

120.7

Total Potential Outreach

394.8

So, surely that’s terrible news for Bitcoin and the other cryptos? And it was. The negative publicity and re-association between Bitcoin and scams was undoubtedly damaging. It’s tough to quantify the exact impact, but it could continue to be felt going forward. What is quantifiable though, is the price fall of cryptos across the board.

Bitcoin, Ethereum, Litecoin, Ripple and other major cryptos all lost between 1.5 to 5% in their prices. Again, nothing here suggests that this week has been anything but abysmal for cryptos in their battle to break through and become a main form of payment. However…

Could we look into the fact that there was not a bigger backlash in the price of these cryptos? Sure, they lost a little, but Bitcoin fell barely 150 points which in retrospect is a drop in the ocean compared to some of the losses it has seen previously. The crypto has firmly established itself at the 9,100 (USD) level, and it seems to have deviated far less frequently from this spot over the past couple of months.

coinsgraph17072020

Call us optimistic, but Bitcoin still remains at 9,100 at the time of writing after all of this week’s drama. This might suggest a certain durability to the asset, or maybe perhaps it’s being embraced as a safe-haven asset during these times of uncertainty. Either way, it seems like Bitcoin’s characteristic of being highly volatile and heavily reactive might be a thing of the past. The hacks this week showcase that it’s perhaps not as volatile as it once was.

ECB stands pat

Christine Lagarde was at it again, assembling her crew of monetary-policy makers in the latest ECB meeting this month. Nothing too much was expected from the decision, with Lagarde herself heavily implying that the bank wanted to let their previously implemented policy take its toll on economies.

And this week, rather welcomingly during these crazy times, there were no surprises from the announcement with interest rates and the stimulus packages remaining unchanged. No change is positive news, as the ECB feels there’s no new need to re-stimulate economies in the eurozone. It’s taken a step-back approach going forward, but this does mean that interventions  will not be made in the future if needed.

Here’s Thursday’s press conference in full, in case you missed it.

 

Netflix about to struggle?

Struggle is perhaps not the best choice of terminology when describing Netflix and the year that it has had so far. Unsurprisingly, with millions condemned to the confinements of their own homes during lockdown, subscriber growth rallied impressively.  

Netflix released its Q2 earnings this week, and the results were interestingly mixed. Over ten million new paying subscribers were added to the platform, smashing estimates that were pitched around the eight million mark. However, forward guidance from the company into Q3 is what disappointed investors. Netflix fell short in their estimates going forward for Q3 in comparison to market analysts, anticipating a slowdown in growth as restaurants, pubs, bars, clubs and other alternative forms of entertainment begin to reopen. This caused the streaming service to lose 10% of its share price.

netflixgraph17072020

Sharp fall in VAT, consumers to benefit

And finally, some good news to end on this week for all you fans of somewhat-overpriced sandwiches. A VAT cut, reducing the cost from 20% down to just 5% has come into effect, meaning food shops and restaurants have been subsequently lowering their prices. Pret is one of those to offer their customers slightly cheaper products, but if you’re not so much of a frequent Pret-a-Manger goer, the likes of KFC and Nandos have also slashed prices. Who doesn’t love a bit of Portuguese-style chicken?

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