How Is Bitcoin Marketing Itself

As a result of the Greek economic downturn and financial crisis as a whole, Bitcoin found itself at the centre of the news debate. Due to its natural characteristics, its decentralised platform, and ultimately its fascinating make-up due to the blockchain technology on which it is based, Bitcoin offers an exciting new wealth of opportunities. With the development of the bitcoin gambling casino which has introduced provably fair gaming to the online world and implementation by brands such as Subway and Steam, the cryptocurrency is continuing to grow. Despite numerous restrictions being placed on Bitcoin, the debate around its potential is continuing, and in turn the cryptocurrency has begun to market itself. Here, we’re taking a look at how.

The Characteristics Of Bitcoin

There are numerous exciting opportunities which Bitcoin provides, and a lot of these come from the characteristics behind the blockchain technology which makes up the cryptocurrency. Firstly, the decentralised element to the Bitcoin offers numerous advantages which is actually leading to disrupt numerous financial institutions. Despite its unpredictability and its evolution under the auspices of a nebulous entity, it is this challenging nature which is actually attracting numerous investors. The cryptocurrency is almost completely anonymous, and as such, many users feel protected when making purchases.

The blockchain technology itself is also exceptionally secure, with fraud being somewhat deterred by the make-up of the cryptocurrency. All of these characteristics have gradually marketed themselves, and with the boom in investment, more individuals are turning to this cryptocurrency as an alternative payment method.

Price Performance

A major indicator of the cryptocurrency’s growth is its price performance, and with the huge amount of investment going into the currency in recent months, it’s unsurprising to see that the price has boomed. Despite many critics believing that the currency remains unstable, the Bitcoin is marketing itself as a well-performing investment opportunity for many. While many are concerned about the regulations which are beginning to be imposed, these will only stabilise the cryptocurrency, further opening opportunities for use.

 

Fear By Financial Institutions

One of the major marketing aspects for Bitcoin is the fear it has imposed in some traditional financial institutions, which may now have to evolve their techniques in order to keep up with this ever-growing technology. While traditional financial institutions may see this as a negative, consumers and individuals will see this as a positive, as banks will now have to adapt their methods in order to keep funds as secure, yet accessible, as possible. Some financial institutions, such as Barclays, have already started to adopt cryptocurrency and blockchain technology, and have begun discussions with regulators on how to bring this technology into play more efficiently. With big brands such as these, alongside the likes of Subway, Microsoft, PlayStation and more embracing this technology, Bitcoin is being marketed in more ways than ever before.

While many associate Bitcoin with having an image issue, in modern times, this is very much the opposite. With increasing regulations being implemented, Bitcoin is only going to stabilise more efficiently, and as a result grow with more investments. Since the boom, Bitcoin’s marketing has been handled by the news and simply by word-of-mouth.

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What Is Going on in Equities Markets Around the World

 

Global stock markets are agonizing through some of the worst selloffs in recent history. The performance of the Dow Jones Industrial Average, the NASDAQ Composite Index, and the S&P 500 has been nothing short of disastrous heading into the month of love. Equities traders, speculators, economists, and media talking heads have used every conceivable adjective in the book to describe the torrid time that markets are enduring. Equities traders have used terms like writhing convulsions to meteoric drops, bearish markets, corrections, and worst multi-year performance.

This begs the question:  Where are markets headed?

It’s important to take a step back from the current grim reality before simply weighing in on the otherwise lackluster performance of global markets. If we look at the following major indices, we can appreciate how well they have performed, and how significant the current market movements are:

  • The Dow Jones Industrial Average is currently down 6.58% over 1 month
  • The S&P 500 Index is currently down 6.05% over 1 month
  • The NASDAQ composite index is currently down 5.75% over 1 month

When we extrapolate further, we can see that the Dow Jones has a 52-week trading range of 20,061.73 on the low end and 26,616.71 on the high-end. Clearly, the current level of 23,715.44 (Friday, February 9, 2018) is firmly in the middle. The S&P 500 index has a 52-week trading range of 2,296.61 on the low end and 2,872.87 on the high-end. The current level is 2,583.74 – again right in the middle. The tech heavy NASDAQ composite index has a 52-week trading range of 5,685.15 on the low end and 7,505.77 on the high-end. It is currently trading at 6,744.55, 1,000 points above its 52-week low.

Why Are Markets Convulsing Right Now?

Major investors, and everyday folks are scared that runaway inflation and rising interest rates could hurt stock market investments. It must be remembered that the fundamentals of the US economy are sound – there is no questioning that. According to Olsson Capital trading guru, Edward Bronstein:

 

‘We have to appreciate the bigger picture here. The Fed has been pushing to raise interest rates ever since the US economy turned the corner. By December 2015, we started to see incremental increases to the federal funds rate in 25-basis point intervals. Come Wednesday, March 21, 2018, we are likely to see yet another rate hike if stock markets stabilize and employment numbers continue to shine and inflation keeps rising.

 

According to the CME Group FedWatch tool – a great barometer of sentiment for interest rate movements, there is a 71.9% likelihood of a rate hike of 25-basis points in the region of 1.50% – 1.75% in March. Unfortunately, stock markets don’t like rate hikes, especially when they are part of a series of ongoing rate hikes. When the monetary authorities decide to raise interest rates, the value of stocks declines. The thinking is that consumers have less personal disposable income, companies are paying more in interest, and naturally this is going to lead to lower demand for company products and services, and ultimately to lower prices.

 

So, to be safe, investors take their money out of stocks and put it into safe-haven assets like gold, gold ETFs, treasuries, and interest-bearing accounts. They are also going short on derivatives trading options like CFDs and spread betting. Is the stock market going to continue its massive selloff? Probably not. But for now the safe money is on a market correction before the value-investors jump back into the markets to pick up bargain deals on top stocks.

 

While the year to date gains have been erased from major bourses around the world, we should take pause and see what US inflation figures will be before determining whether Fed action is warranted. Meanwhile, German, US and UK bonds have reacted with high volatility to current economic conditions. Oil is down, gold is down, copper is down, and the USD is down. The current trajectory of financial markets is attributed to bearish sentiment.

 

 

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Bitcoin The Hottest Topic in World Currency

 

Bitcoin surged to a fresh all-time high on Thursday hitting $5,231, eclipsing the previous record of $5,014 hit in early September. The cryptocurrency is now up more than 420% for the year.  So far, investors and customers have shrugged off negative commentary about cryptocurrencies, despite being unable to break into the U.S. markets.

In September, Chinese authorities banned exchanges that deal in crypto currencies. They also banned initial coin offers which are the way most digital currencies raise capital. This has further perpetuated the rally, since there is a limited supply on the amount of a crypto currency that can be mined. With supply contained by regulators and demand increasing, the price of bitcoin is getting forced higher.

There have been reports floating during the past week that China might allow cryptocurrency exchange as well as ICOs. Sources cite Chinese regulators saying that bitcoin trading will likely resume with more regulation. This could include new licensing and anti-money laundering regulations.

SEC Does Not Give Its Blessing to Bitcoin

To date, the Securities and Exchange Commission (SEC), which is the main U.S. securities regulator, has not given its blessing to crypto currencies. Without consent from the SEC mainstream trading is not possible. Their unwillingness to consider bitcoin has frustrated exchange applicants who are now withdrawing their applications. This will likely be a long process, and need consent from congress as a new currency that is potentially subject to manipulation, would undermine the U.S. dollar. Bitcoin is a treat to the greenback globally, which will make it difficult for the digital currency to gain widespread acceptance in the United States.

Swedish Officials Pay Debt in Bitcoin

Swedish regulators with the Swedish Enforcement Authority has paid a debt with bitcoin. This is the first time the enforcement agency in any country has accepted bitcoin as a currency that is paid directly to a government.

Swedish authorities see bitcoin as an asset that can be used to make payment and its increasing acceptance will provide an alternative method for payments of debt. While the Swedish authorities are used to handling these issues through the banking world, they also take payments which need to be converted into cash.  By taking bitcoin, they greatly enhanced their ability to retrieve debts. In this regard, it seems the Swedish Enforcement Authority will likely continue accepting bitcoin for debts citizens wish to settle.

 

Bitcoin prices have broken out to fresh all-time highs pushing through the highs made in September, and poised to test higher levels.  Support on Bitcoin is seen near the 10-day moving average at 4,576.  Volume on the breakout is average, which does not add to the accelerating in prices.  Bitcoin prices are experiencing accelerating positive momentum as reflected by the relative strength index (RSI). The index is a momentum oscillator that also measures overbought and oversold levels. The currency reading on the RSI is 75, which is above the overbought trigger level of 70, which could foreshadow a correction. Reading below 30 on the RSI are considered oversold.

 

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Accounting 101: What Will the IRS Do If Your Small Business Files Late

Not every small business has the luxury of having an employee with a bachelors of accounting, but it would be good if they did. Taxes are one of the most difficult to understand aspects of running a business and, believe it or not, one small error can translate to huge losses. Perhaps your bookkeeper plays it down, but the point is, taxes are not joke. You must file and pay on time. What will the IRS do if you file late? You might not like the answer!

Failure-to-File Penalty

It doesn’t take a bachelors degree in accounting to know that the IRS can, and usually will, impose a penalty for filing late. What you may not know is that failure to file on time typically carries a larger penalty than failure to pay on time. Many business owners find that a bit odd. Why would Uncle Sam give you a stronger penalty for being late filing than late paying? The answer to that isn’t clear. It’s just the way it is.

What Kind of Penalties Are Imposed for Filing Late?

Every business will be penalized individually, based on the taxes owed for that period. This is because penalties aren’t set in dollar amounts but rather as a percentage of taxes due. Here is where it gets a bit sticky. The usual amount of a penalty for failure-to-file is five percent of unpaid taxes. That’s why every business will be assessed a different amount. However, if you’ve filed late and have as yet not made final calculations, there is no way of knowing what you will be assessed. Also, you will be assessed that five percent penalty for every month your return is late.

Failure-to-Pay Penalties

On top of failure-to-file penalties imposed by Uncle Sam, you will also incur failure-to-pay penalties because, obviously, your return will be late. This penalty is equal to one-half of one percent of the total taxes you owe. However, there are ways to avoid the failure-to-pay penalty if you understand what’s expected of you.

Timely Requests for Extensions

Most often, small businesses file taxes in much the same way as individual payers. This is often because they operate from their homes and have formed an S Corporation. If you are new to filing a small business return and need that extra time to sort through deductions and itemizations you can claim, simply request a filing extension. If you can pay a pre-specified percentage of what is due and ask for an extension timely enough, you may not be penalized.

Unfortunately for most small businesses, business and individual taxes are calculated differently. If you are not up on corporate taxation, you just might be filing or paying late. Rather than being assessed a penalty, why not hire an accountant to help you meet the requirements of the IRS. Whether you choose to get a degree in accounting yourself or hire someone well-versed in tax law, the one thing you can be assure of is that the IRS will impose a penalty for late filing of business returns.

 

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The Future of Wall Street is On Line

 

Investment bankers were the lords of Wall Street for a long time. However, things started to change after the 2007 financial crisis. Lehman Brothers filed for bankruptcy and led to greater scrutiny of the operations of other Wall Street bankers.

It was during at same time when Morgan Stanley and Goldman Sachs decided to become bank holding companies so that they can gain access to the Federal Reserve’s discount window. By transforming into bank holding companies, the two firms are able to tap into deposits from their retail customers.

      Difference between Investment Bank and Bank Holding Company

An investment banks help governments and companies raise funds by issuing and selling securities. They also provide advice on other financial transactions, such as acquisitions and mergers. Although they are regulated by the Securities and Exchange Commission, they operate with less supervision compared to commercial banks.

A bank holding company is an umbrella corporation that operates commercial banks that include accepting deposits from their customers. They are supervised by the Federal Reserve, as well as the Federal Deposit Insurance Corporation.

After the two firms became bank holding companies, there are no independent investment banks operating in Wall Street. Citigroup remained the largest holding company in the United States, followed by JP Morgan.

                             What’s Next for Wall Street Banking

Morgan Stanley and Goldman Sachs are still able to engage in their investment banking activities even after they became bank holding companies. However, their operations will be under the supervision of the Fed.

Going to the Cloud

Financial services are now moving to the cloud. Trading firms and asset managers are in the process of moving all their data to the cloud. As the technology advanced, cloud servers have become more safe and secure. Plus, they offer flexibility and agility to their customers.

Cloud computing has become more important in the past couple of years, that there are talks of the death of traditional brokerage firms. It will not be long when companies don’t need Wall Street bankers. Instead, they can do their business in the cloud, just like in the real estate and travel industries.

wall street cloud text on blue sky, business concept

One of the main roles of an investment bank is to serve as the third party between corporations and investors through initial public offerings. Investment banks offer underwriting services for new stock issues once the company goes public and looks for equity funding.

In the future, FinTech companies are able to offer the same services through cloud computing. Such company can partner with several banks to reduce exposure of a single bank. Everything will be transparent to ensure all transactions comply with existing rules and regulations.

The 2007 financial crisis has exposed the weaknesses of Wall Street banks. It is time to be gone with the old ways of doing things on Wall Street, and adopt new methods and technologies to make things more secure, safe and convenient for all stakeholders. And the key to all this is cloud computing.

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Beating Credit Card Debt with an Unconventional Solution

 

 

 

Credit card debt is a bugbear for many people in the United States. Once it gathers momentum, it is extremely difficult to stop. A slew of recent data reports confirms a new reality: credit card usage is rising but there are encouraging signs on the horizon. In Q2 2017, credit card debt increased to a record high of 91 million additional accounts, according to the ABA (American Bankers Association).

After a lacklustre Q1, volumes surged by an estimated 9% across the board. The slew of data is not necessarily bad: banks, credit authorities, and non-bank lenders are a lot more cautious about who they’re lending money to and how much they’re lending. This is one of the biggest differences between current credit card expansion and the pre-2008 global financial crisis levels. Multiple checks and balances are in place to guard against default, by limiting banks’ exposure to risky customers.

US Economy Improving with Better Credit Management

The subprime market also faces lower levels of credit expansion, and this is good news for the US economy. The annual figures also indicate room for optimism, with purchase volumes increasing by 4.9% for prime accounts, and super-prime accounts rising by 5.2%. Subprime accounts decreased by 1%. According to the October 2017 credit monitor, which encompasses data from April through June of this year, the number of accounts open in the past 24 months increased at the slowest pace since 2013. This indicates that new subprime and prime accounts have been beset by subdued growth.

Credit card utilization is increasing, but customers are increasingly careful about how they manage their credit card debt. Another encouraging statistic from credit card utilization and personal disposable income indicates that PDI increased to 5.46% during Q2 2017, after declining in Q1 2017. However, this level has remained stagnant since 2012. Growth in credit card utilization and expansion bodes well for the overall US economy, since it indicates increased spending. 70% of US GDP is comprised of consumer expenditure. The fact that US customers are managing their credit card debt and other lines of credit is also an encouraging sign.

Effective Debt Management Solutions

Growth in the credit markets is moving in tandem with the growth in the US economy overall. With rising levels of consumer confidence, it is clear that various tactics and strategies are being employed to deal with debt in a much more effective manner. Several strategies are being used to limit the negative effects of a burgeoning debt levels. One of them is a growing range of debt consolidation options available to clients.

Debt consolidation is a highly effective way of making lower payments on your outstanding debts through a lower-interest loan. Simply put, debt consolidation groups together similar debt (in this case credit card debt) and pays it off with a single loan from a lower-interest bank or non-bank lender. In this way, clients get to enjoy a lower debt burden and affordable repayments. Debt consolidation should certainly be considered over debt settlement for many reasons. For starters, debt consolidation will not adversely affect your credit score.

Why Debt Settlement is Bad

Debt settlement requires a negotiation (settlement) with your creditors. This typically results in your paying less to settle all your debts with your creditors. However, they are likely to report you to the credit bureaus which will then lower your credit score. If you are unable to make good on your repayments, debt settlement can be negotiated either directly between yourself and the creditor, or a third-party to negotiate a deal on your behalf. It should only be considered if no other options are available.

Debt consolidation is available through several means, such as transferring high credit card balances to credit card accounts with low balances, and/or lower interest repayments. However, experts caution that balance transfer fee should be taken into account. Unpaid credit card balances on a high-interest accounts have an adverse effect on credit scores. The other option is a debt consolidation loan. You may pay 10% as opposed to 20% to 25% in interest. This is a major cost-saving and a big incentive for getting out of debt and keeping more of your hard-earned money in the process.

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What Is MiFID II and what impact will it have on business

Even though the delay of the Markets in Financial Instruments Direction, MiFID II, will have been a relief to a number of investment firms that had waited for the release of the European Securities and Markets Authority’s regulation, it doesn’t hide the fact that it will come into practice. The impact that MiFID II will have on businesses is constantly changing and it is imperative to keep a finger on the pulse.

The launch of MiFID II in January 2018 is set to have a sweeping effect on asset management firms in particular who are responsible for providing transaction reports. Despite a couple of exceptions, these firms will no longer be able to rely on brokers for transaction reporting.

However, new technologies will be implemented to help businesses to meet their MiFID II reporting needs.

What is MiFID and MiFID II?

The first Markets in Financial Instruments Directive (MiFID) resulted in a major change to cash equity markets. Its best intentions were to remove barriers to make cross-borders trades and exchanges within Europe safer and more transparent. MiFID II regulates firms that provide services to clients, such as collective investment schemes or derivatives, and this also includes trading of location instruments. The legislation has a number of core objectives, including:

  • To improve investor protection
  • Alignment of regulation across certain areas within the EU
  • To increase competition between financial markets
  • To introduce reinforced supervisory powers

So essentially, MiFID II will introduce a set of requirements regarding communication, disclosure and transparency to benefit investors.

                                        What impact will MiFID II have on business?

 

                                 There are three main challenges ahead of MiFID II:

    

To Improve the market

MiFID II improves the competitive environment for financial instrument trading. This is achieved by establishing access in the market for trading platforms to expand. New rules regarding high-frequency trading will also be put into practice. It is likely for this to involve strict requirements for both investment firms and trading venues. Investment firms will also need to be aware of what types of businesses they are and are not in, and those that they are interested in joining.

To Increase Transparency

When MiFID II is introduced, more requirements will need to be filled when reporting commodity derivatives trading to attain transparency. To ensure success, all trading information must be recorded before and after the transaction for a larger number of financial instruments, when compared to MiFID, to provide increased accountability. Certain shares will be required to be travel-use regulated platforms, as opposed to over the counter, making the process more secure and private.

To provide investment protection

MiFID II focuses on improving investor protection to extend the introduction of robust controls, to prevent conflicts of interest. This will aid in encouraging transparency between pre-execution and post-execution, and enables fees payable in respect of investment advice to be banned. The introduction of new requirements and implementing existing ones will strengthen the protection of investors.

How to Really Benefit from Low Interest Rates

 

 

 

 

98% probability of interest rates remaining at their current rate

The current interest rate is 1.00% – 1.25%. The Fed has not indicated any desire to increase the federal funds rate at its next meeting on Wednesday, 1 November 2017. According to the CME Group FedWatch tool, there is a 98% probability of interest rates remaining at their current rate when the FOMC meets within a month. However, the likelihood of a rate hike at the final meeting of the Fed FOMC on Wednesday, 13 December 2017 is currently 76.4%. By contrast, the probability of interest rates remaining at the current level of 1.00% – 1.25% is just 22.1%. The importance of probability estimates vis-à-vis interest rates cannot be understated. Since August 25, 2017 through September 22, 2017, we have seen an increasing probability ranging from 37.8% to 71.4% that the target rate will increase by 25-basis points.

Monetary and Fiscal Policy: Interest Rates

Current forecasts are based on the estimates of leading economists, analysts and stakeholders. If the Fed deems it appropriate to raise the federal funds rate, this will have a dramatic effect on the USD and the US economy. While the impact of a rate hike is typically priced in to the value of the USD well ahead of time, the actual announcement will cause a slight bump in the USD. For example, interest rate hikes are typically indicative of an improving economy. When the inflation rate (CPI figures) begins to rise, this means that the purchasing power of the USD may be declining. To keep the economy in check, the Fed has several tools at its disposal, notably monetary tightening (rate hikes and unwinding the $4.5 trillion balance sheet). Fiscal policy can also be used to tighten economic conditions by raising taxes, and reducing government spending. However, neither of these fiscal measures are likely given the Trump administration’s policy of tax breaks and massive government stimulus. Therefore, it will be up to the Federal Reserve Bank to adjust monetary policy to prevent inflationary pressures and to keep the USD strong.

The Nonlinear Relationship between Interest Rates and Stock Markets

Low interest rates – as they currently are – will last for some time, but there is a trend towards a gradual tightening of interest rates. If the Fed raises rates before the end of 2017, the federal funds rate will rise in the region of 1.25% – 1.50%. Further rate hikes will be forthcoming in 2018. Right now, we are seeing an increase in the number of personal loan applications as individuals take advantage of historically low interest rates in the country. Any increase to the federal funds rate will invariably spill over into other areas of the economy, and make all lines of credit relatively more expensive. This is particularly true of credit cards which are associated with high APRs, business loans, mortgage loans, automobile loans, student loans and the like. Provided it is feasible to finance a line of credit, it is always better to do it when interest rates are low. Typically, the bulk of payments on personal, business and mortgage loans go towards repaying the interest on the loan. In latter years, the principal amount is repaid. The Fed is also cognizant of the rising level of household debt in the US, and how an increase to the federal funds rate might affect that. If the FOMC decides that conditions are rife for a rate hike, this will provide a short-term boost to Wall Street, but ultimately the increased costs of loans will lead to a slight decline in share prices and profitability, but consumers will ultimately bear the burden.