(New York)

Okay, we are calling it. Officially. While some had been holding out hope that Bitcoin might regain ground back up to its peak of around $20,000, the bottom appears to have officially fallen out. The cryptocurrency is now trading under $8,000, down around 60% since its peak. The currency continues to suffer setbacks from regulatory efforts in various jurisdictions, and it has put bears firmly in control.

FINSUM: Bitcoin and cryptos will be around for a long time, but the price discovery for a realistic level is going to be painful.

(Houston)

Oil prices have been rising strongly on the global market. However, those gains took a breather yesterday when eye-opening new info emerged on the oil market—the US is now producing more than 10 million barrels of crude oil per day. The mark was hit in November, and arrived much sooner than anyone expected. The US has only broken that threshold twice in the past, both times in 1970.

FINSUM: Okay so our big concern with the oil market right now is that these higher prices are not sustainable. The fundamental oversupply of oil has not been solved. The only thing holding up prices is the fact that OPEC members, for the moment, are happy to let the US benefit disproportionately from their output cuts. This output figure might change that.

(New York)

ETFs have been the dominant investing trend for the last half decade or so, eating away at mutual funds’ grip. However, what will be the next major investing trend? The answer may have just debuted. Orion Advisor Services has just announced a new product called ASTRO (Advisor Strategy & Tax Return Optimization tool). ASTRO “allows advisors to build tax-efficient SMA portfolios that can take into account clients’ environmental, societal and governmental concerns”, according to Michael Kitces, who says that the new technology is a threat to asset management and could prove highly disruptive, as it would allow better loss harvesting and more tax-sensitive liquidations in retirement. The system would allow advisors to “buy, own and manage a portfolio of all the underlying individual investments directly”.

FINSUM: This sounds like it could be a very potent offering, but we do not expect ETFs do go away any time soon.

(New York)

Morgan Stanley went on the record yesterday arguing that market liquidity will likely vanish in the event of turmoil. The bank says that the reduction in bank participation in trading, brought on by post-Crisis regulation, has led to “shadow banks” taking up the burden of liquidity. Such shadow banks including entities like professional trading firms, hedge funds etc. However, Morgan Stanley points out that this type of liquidity provider has never been tested in a tumultuous market, and that liquidity is likely to vanish.

FINSUM: While there may be some truth to it, banks love to over play the amount of liquidity they provide in periods of turmoil. When the market gets ugly, they tighten up just like everyone else.

(Houston)

So oil has staged a slow and cautious recovery over the last year powered largely by OPEC’s oil cuts. That said, prices are still ~35% below the $100 per barrel threshold. But guess what, it does not matter. In an absolutely eye-watering piece of data that is a testament to both management and technological innovation, Shell oil company is making as much profit barrel with oil at $60 as it did when oil was $100. Exxon performs even better.

FINSUM: Oil companies have done a truly commendable job rejigging their business models and cutting costs to maintain profitability.