Weekly Update 26 May 2017
Government-issued currencies and bonds were lower this week, while stocks and commodities were mixed. The biggest news and the biggest gains were once again in Bitcoin, which rose 13.0% to close at 55.3 grams (more on this below). The largest drop was in cotton, which fell 4.0%. Gold stocks continued to fall, dropping 2.2% on the heels of last week's 1.7% loss.
The Japanese Yen and the US Dollar were the weakest of the currencies, declining 1.0% each. The strongest national currency was the Chinese Yuan, which fell just 0.1%.
Bitcoin was the strongest of all currencies, and the strongest asset class overall, rising 13.0%. Bitcoin made a new all-time high every day this week until Wednesday, when it closed at 61.5 grams. On Thursday, trading continued higher, peaking at 69.0 grams before falling sharply to close the day at 58.3 grams. On Friday, the slide continued, ending the week at 55.3 grams, still up 13.0% for the week, and up 74.5% in the last month.
This stunning rise is just part of the story, though. Bitcoin is not the only cryptocurrency out there, though it is the largest by market cap. Many others, including Ethereum, with the second-largest market cap, also set new all-time highs this week. Lots of money is moving into this space… and while prices will undoubtedly continue to be highly volatile, many feel that these free market currencies are going to move much higher as they become more broadly adopted and enter the mainstream of finance.
Bonds were lower, favoring the shorter maturities, with the long term TLT down 1.2%, the short term SHY down 1.1% and USD cash down 1.0%.
After a strong showing 2 weeks ago, gold stocks have been pulling back. This week the HUI fell 2.2% to close at 4.8 grams. The Euro STOXX fell 1.5%, but US stock indexes were higher, with the S&P 500 gaining 0.4%, and the Dow Jones Industrials 0.3%.
The weakest commodities were cotton and crude oil, which dropped 4.0% and 2.1% respectively. The biggest commodity gains were in silver, which rose 1.3%, and platinum, which rose 0.9%.
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