Facebook Is Going Full Tilt Into Crypto as Bitcoin Soars Above $6,000

June 6, 2019

5-Day Change

  • Bitcoin $5,929.60
  • S&P 500 $2,892.66
  • Ethereum $169.11
  • Dow Jones $26,112.07

Top Movers

  • Bitcoin reaches $6,000, the highest price since November 2018
  • Ethereum up 8.27% since the start of the week, moving towards its previous all-time high
  • Ripple has remained nearly flat, losing 1.31% over the past week on the USD pair
  • Akorn, a pharmaceutical company, has gained 27.31% over the previous week despite a Q1 earnings loss
  • Vivint Solar, a residential solar power firm, grew 22.33% ahead of expected earnings growth this week
  • Catalyst Pharmaceutical is down 34.49% after the FDA approves a competitors drug

Facebook Is Going Full Tilt Into Crypto as Bitcoin Soars Above $6,000

Facebook has made waves recently with two major reports coming out about their highly secretive FB Coin project. Project Libra (as Facebook calls its cryptocurrency project internally), is looking to recruit dozens of partners to help it implement its USD-pegged stablecoin. It’s already started with the rumored hiring of noted MIT crypto economist Christian Catalini, though like everything involved with Project Libra, Facebook is keeping its cards close to its chest. And FB isn’t the only crypto news - Bitcoin’s reached its highest peak since the start of the year, with no signs of slowing down.

  • Is this good for crypto? It’s definitely not bad. If all the rumors about FB Coin are true, it may give Telegram’s yet-to-be-launched Gram coin competition in the ‘first to mass market’ space.
  • What about Bitcoin? TO THE MOON? While predictions that Bitcoin’s price will reach six figures are a tad far-fetched, there’s no denying that Bitcoin, and the crypto space in general, are picking up steam, despite efforts by state actors to keep it down.
  • Both Gram and the Facebook Coin currently aren’t released, and Bitcoin’s rise signals that the grand-daddy of crypto is here to stay. With Ethereum 2.0 and Bitcoin Cash both on the horizon, however, the world’s first cryptocurrency may soon find that it has fresh competition for the top spot.

THE TAKEAWAY: Price predictions are notoriously hard to get right, but some analysts have been right on the money. It remains to be seen how the entrance of Gram and FB Coin will disrupt the crypto market, but so far, it hasn’t been a bad year for Bitcoin bulls.

US-China Trade War Heating Up

After a seeming Q1 ceasefire between the two economic superpowers, the US-China trade war has flared up once again after US President’s Donald Trump’s announcement that he’ll be raising tariffs up to 25% on $200 billion worth of goods, and set another 25% tariff on $325billion worth of Chinese goods in the near future.

  • Why the sudden change? The announcement comes ahead of an expected last round of trade talks on Wednesday, and is probably representative of the president’s ‘tough negotiator’ image. The move puts additional pressure on a China struggling to preserve an economic recovery.
  • Corporate Winners: Conventional economic thinking assertsthat trade wars are inherently destructive to all parties involved, but some companies can still win and lose big. Domestic manufacturers might see demand shift as comparatively cheaper Chinese variants get more expensive, such as US steel company Nucor.
  • Corporate Losers: Importers like Ford suffer greatly from retaliatory tariffs on Chinese steel, and US farmers have already felt the hit, especially soybean and grain. Popular US brands may soon be affected - included in the 25% hike on $325 billion worth of goods is Apple and other electronics makers, so get ready for some heavy price hikes.
  • But No One Really Wins a Trade War: The trade war has already been estimated to have cost the US economy over $40 billion in lost exportsaccording to a study by the Institute of International Finance.

THE TAKEAWAY: It’s definitely a rocky road ahead for investors as nearly every aspect of global trade is affected by the US-China trade relationship, and a projected trade deal may now fall through. In fact, the projected trade deal may have been a reason for markets being high the past few weeks...watch the fallout from this latest round of tariffs carefully, as China decides how to respond and companies refocus their strategies.

World of Warcraft Creator Activision Blizzard Bleeding Users

Games-as-a-Service isn’t paying off like Activision Blizzard thought it would...The popular video game company, famous for gaming staples like Overwatch and World of Warcraft, has shown a 7% fall in revenue from the previous year, even though it beat expectations over February’s forecasts. While the company reported $1.8 billion in Q1 revenue, its stock has taken a 4.96% fall since earning were announced on May 2nd.

  • Is WoW still digital crack? Well, not as much as it used to be. The popular MMORPG has lost nearly 600,000 players since its peak in 2016, and nearly 1 million across all of AVTI games, including popular team shooter Overwatch and digital cardgames Hearthstone.
  • What are gamers playing now? Fortnite, a ‘battle royale’ style game where players compete in an arena containing 100 competitors, has attracted nearly 250 million monthly active users, coinciding with a 28% drop in ATVI stock.
  • Game over for Activision Blizzard? Well, not exactly. Blizzard’s Overwatch League, a major esports initiative that involves major sports style teams competing in Blizzard’s Overwatch game, has actually grown in viewership by 30%, showing that Blizzard’s games are still popular, and there’s still room to expand in the popular esports scene.

THE TAKEAWAY: While AVTI has taken a beating, don’t write it off yet - despite revenue numbers falling below forecast, it still reported record revenue numbers in 2018 and a 9% y-o-y dividend increase. And, with the esports scene booming and likely continuing to grow, especially with new leagues being launched for popular games like Call of Duty, AVTI is well-poised to become a leader in the esports space.

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