BUZZ-COMMENT-Bitcoin Boom Can Make Others Gamble

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October 5 (Reuters) – Since the U.S. Federal Reserve announced a withdrawal of the stimulus last month, bitcoin has risen by 10,000 points. This strong performance for a very risky asset may encourage traders to reinvest in other risky currencies.

Cryptocurrencies are largely a gamble. Their technology is shrouded in mystery, and not all of these currencies have the fundamentals and interest rates that typically provide reasons to trade.

So, the big bitcoin gains provide a strong signal of increased willingness to gamble regardless of the Fed’s change of course, and this is why other risky currencies are rebounding.

With oil rising to new highs, commodity-linked currencies should do better and the free-floating, high-yielding South African Rand and Mexican Peso could do better.

The Russian ruble, Brazilian real and Indonesian rupiah could also thrive, while the rise in the Chinese yuan, which is at the heart of the positive trends, could strengthen even more quickly if traders who had sold since the hawkish Fed meeting of June were buying it now. The Indian rupee, close to the base of its range, is also expected to attract buyers.

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Bitcoinhttps: //tmsnrt.rs/3FkLJHd

(Jeremy Boulton is a market analyst at Reuters. The opinions expressed are his own; edited by Susan Fenton)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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