Scared Investors Demand Digital Banking Safe Haven
Beijing threats at Washington keeps on escalating the trade war. Concerned investors are shifting towards new-age investment vehicles and revenue shares, to quantify new profits and liquidity opportunities.
Spotting the “rare-earth elements threat” as the potential latest trigger to precede the “2021 recession” (which had been previously predicted by a majority of insurance companies), investors enjoy the hype of the ever-evolving financial technology Blockchain once again, providing creative yield business models with different hedging perspective.
Red May
May 1st, 2019 — the International Workers Day, ignited the downfall in US markets. The yields on government bonds have been falling rapidly since September 2017 and the market is pricing in a Fed rate cut in 2020. The latest Chinese production position currently stands around 92% of the rare metals used to produce various technological products: such as computer chips, smartphones, and many military-grade security products. Stopping the production of these metals is said to pretty quickly lead to a shock in the production processes of many common products- and because these are metals with a high cost of production, we should exact a jump in price which will send global shock-waves.
After the decline from the record peaks of nearly $20,000 in December 2017, and in parallel with the rare metals issue mentioned above, Bitcoin had spent most of the first quarter of 2019 floating below the $4,000 price level. April showed a different picture as Bitcoin entered a bull market and brought back the hunger for extreme yields with cryptocurrencies and alternative investments vehicles rising up quickly. Creative regulated blockchain offerings became an innovative way to raise funds, as regulators around the world published proper guidelines. Institutional money is now joining the party with new blockchain-based liquidity solutions, pushing retail investors around the world towards alternative assets to safely invest in.
Cheap Risk VS Cutting your losses
Should we choose to go on defense and shift to traditional bonds? This is the old fashion survival mechanism. The option to receive timely and appropriate compensation becomes worthwhile when the market becomes more volatile.
That’s the advice coming from Elad Kofman, head of strategy at Stellerro: digital investment banking and a veteran of the retail and private financial sphere.
“Our expectation is that stocks will suffer even more volatility before they continue to grow. We believe this is due very soon. Our guess is that the stock markets will be affected mainly by the tension, which may take several weeks. Then the risk will increase on the sellers’s end. Looking ahead, it is important to understand that measures such as diversification and hedging do not mean risk abundance, but rather exploitation of opportunities. Any extreme market stress should force the Federal Reserve to take further actions to secure market stability.”
A Warning to the Curious
The state-run News Agency, Xinhua, reported the following last Saturday and it seems this is only the beginning:
Last Friday, China announced that it would work to establish a list of “unreliable” entities that harm the interests of local Chinese companies and could affect foreign companies as trade margins intensify.
A potential recession for the US economy could become tangible if the US realized its threat to impose up to 25% tariffs on goods imported from Mexico. US President Donald Trump said on Thursday that he would impose a 5 percent tariff on all multinationals and their supply chains could suffer, as two-thirds of trade between Mexico and the US are using intra-company. it seems that a sector relevant employee cut, will be one of the triggers that will assure the recession is upon us.
Xinhua used two hashtags in the two Weibo FedEx reports:
#RetaliateAgainstUSTradeBullying and #ChinaUSTrade. This worries many financial entities as China could retaliate against the U.S. as they reckon the move was “politically motivated” and an “abuse of export-control measures.”
Taking the dynamic eco-system into consideration and having the technological edge and grasp of the above, Stellerro Plans to Launch Its Fully Regulated STO Under ESMA Regulations, by Mid -June 2019. Read more about it here.
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