Bitcoin Bubble │ Re-Emerging Asian Fever

Source: CryptoCompare BTC/USD Index

Continuing its stellar rise, and adding more than 30% to its value in just a week, on May 25 (Thu) one Bitcoin was worth USD 2,768.32, way over twice as much as one ounce of gold. After crashing more than USD 500 from its intraday highs in less then 9 hours (-18.6%), Bitcoin has bounced back USD 300 off its intraday lows extending gains into what is likely to be another frenetic Asian session. While there are numerous drivers of the recent action, 'scaling' and 'asian fever' are the greatest factors with Japanese and Korean premia exploding.


Bitcoin has risen 170% over the last three months to reach a capitalisation of USD 40 billion according to the CryptoCompare BTC/USD Index, Ethereum too has seen its market capitalisation jump 330% in the past three months to reach USD 20bn according to the CryptoCompare BTC/ETH Index. It is Japan, Korea and Asian interest that is causing the price to rise and dragging up Western prices on the back of regulatory moves as well as scaling. This is the total market capitalization of all cryptocurrencies:  

Source: CryptoCurrency Market Capitalizations

To date that has mostly meant Bitcoin, but over the last two months Bitcoin’s share of cryptocurrency capitalization has actually plummeted to less than 50%, thanks to the sharp rise of Ethereum and Ripple in particular: 

Source: CryptoCurrency Market Capitalizations

This news is the latest bit of good news for the Bitcoin: 

• At the beginning of April, Japan announced Bitcoin had become a legal payment method in the country. 
• Additionally, Ulmart, Russia's largest online retailer, said it would begin accepting Bitcoin even though Russia had said it wouldn't explore the cryptocurrency until 2018. 
• The gains also seem to be boosted by speculation the US Securities and Exchange Commission could overturn its ruling on the Winklevoss twins' Bitcoin exchange-traded fund.  
• And most recently, Fidelity's CEO Abigail Johnson lending some credibility to the crypto-currency, explaning how her firm was mining Bitcoin, and accepting payments in the virtual currency. 
• And finally, as a reminder, it appears Bitcoin is one of the only (un-rigged) assets in the world that is reflective of global policy and geopolitical uncertainty.

In 50 Years this has never failed to trigger a Bear Market | Jesse Felder

Jesse Felder (Jul 30, 2016 @ Zero Hedge) - Over the past half-century, we have never seen a decline in earnings of this magnitude without at least a 20% fall in stock prices, a hurdle many use to define a bear market. In other words, buying the new highs in the S&P 500 today means you believe “this time is different.” It could turn out that way but history shows that sort of thinking to be very dangerous to your financial well-being.

On July 29 CNN's Fear & Greed Index indicated "Extreme Greed"
Source: CNN Fear & Greed Index

Citigroup's Panic/Euphoria Model on August 01, 2016 = Most 'euphoric' since August 2015.
Source: Citigroup Panic/Euphoria Model