BItcoin Price Exceeds $8,000

US stock markets closed lower on Friday which marked a lower close for the week for the Dow Jones and only a two-point gain for the S&P 500. The ASX 200 closed higher on Friday although was down for the week. The index is back below 6,000 after briefly exceeding this level the prior week. ASX 200 futures are down four points this morning.

The bitcoin price has exceeded US$8,000 per coin for the first time ever following a strong rally later in Friday’s trading session. The rally coincided with a national address by Zimbabwe president Mugabe stating that he doesn’t intend to resign in the African country that is currently experiencing hyperinflation. The price of bitcoin in Zimbabwe is US$13,500, a massive premium over the price elsewhere in the world as Zimbabweans scramble to preserve their wealth. This is the second bout of hyperinflation experienced by Zimbabwe after inflation in the country reached 80 billion percent in 2008. Swiss asset-manager, Vontobel, has launched a futures product that will allow retail investors the possibility of shorting bitcoin.

The gold price climbed on Friday, especially in Australian dollars, as the Aussie dollar continues to be weak against the US dollar. The AUD price of gold is now $1,710 per ounce, having broken through $1,700 in Friday’s trading session. The gains in gold have come despite very high market implied probabilities of a rate hike in the US at the December meeting of the Federal Open Market Committee (FOMC). According to the CME Fedwatch tool, the probability of a December rate hike is 100%.        

Data Releases:

–    No Significant Data

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This article was written by William O’Loughlin – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.