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Here's what happened to the stock market on Friday
Investors cheered strong earnings and positive news on trade.
Other companies reporting better-than-expected earnings included Visa and Alaska Air.
WATCH: Where Is the Crypto Market Headed Next Week?
Arca Chief Investment Officer Jeff Dorman joined CoinDesk’s Brad Keoun on Thursday, Oct. 24, to talk about the current downward trend in crypto pricing and why things may be looking up.
(On Friday, bitcoin’s price shot up 13 percent to more than $8,400.) “It’s always difficult real-time to understand what’s causing a price decline or a price appreciation. After the fact, you can piece together pieces of news that may have caused it,”
He’s a former high-yield bond trader with big firms like Citadel, Merrill Lynch and Friedman, Billings, Ramsey, and lately he’s been bringing that experience to bear in the crypto space.
We need to get reputable companies in here who help traditional investors get in here and part of it is simply getting traditional investors to recognize that this really is an asset class that they can you can use for a variety of different purposes, whether that’s for hedging with speculation, whether it’s for growth.
BK: Just sort of anecdotally looking at bitcoin market, and it seems like we’ll have these big stair-step moves and then we’ll go along in a range, and then we’ll have another very large move.
JD: I think for the most part, traditional investors are not scared off by volatility as long as there’s upside volatility as well right now, but volatility can be managed.
For the most part, traditional investors are very good at managing risk, and they’re very good at managing volatility so that that’s to me, not something that’s going to scare people away from this market.
I think what will scare them away is not understanding where the volatility is coming from, and I think that’s where a lot of the due diligence is going through right now, trying to figure out how it’s happening, how they can prevent against it what kind of managers or that they can trust to actually manage that risk for them.
The first cut really did spark a 25 percent rally over the next five days, August 1- August 6, just because it is such a reversal of what had been happening over the last four or five years of going the other way with tighter monetary policy rather than looser long term.
However, you couldn’t ask for a better long-term backdrop for bitcoin right now, with anything from what’s happening with the QE and all in the repo markets and just constant injections of liquidity, which obviously is going to lead to inflation at some point or just raising the debt ceiling.
JD: In debt, we’re trained to look at downside, not upside, whereas equity guys usually look through rose-colored glasses and look at the upside first.
There are people who, nine years ago, eight years ago were calling for the same demise as people are calling for now and truthfully, nothing has really changed, except for this giant band-aid of liquidity that the Fed and other central banks have put over the problem.
And, you know, a lot of people, especially in the United States, when you’re not affected by the issues that are going on elsewhere, with real restrictive government regimes and real currency depreciation, you’re just not going to appreciate how important bitcoin really is to the future success of money.