1. As the price of Bitcoin surged above $10,000 this week, our Bitcoin Market Monitor, which measures global online interest in the cryptocurrency, hit its highest level since 2013. Major drivers of the signal were sources related to “mining pool” — the practice of combing processing power to obtain bitcoin — reflecting a continuing rush to enter the market. Our backtest engine has revealed a strong positive correlation between online interest in bitcoin and its price.
2. Browsing patterns of online audiences this week reflected heightened concerns about a possible U.S. stock market bubble. On November 29, views of the English-language Wikipedia page for “stock market bubble” were the highest they have been in more than a year. That same day, investors abruptly sold off tech stocks. More generally, Predata's backtest engine has found a negative relationship between our U.S. stock market bubble signal and U.S. 10-year yields — a reflection that investors buy longer-dated bonds when bubble fears surface. Going back to 2012, yields drop nearly 70% of the course of a 10-day holding period following spikes in the U.S. stock market signal
3. Attention to the U.S. Debt-Ceiling emerged again this week after a CBO report found that, “Under current law, as of December 9, federal debt will be at the statutory limit and the Treasury will need to take certain 'extraordinary measures' to continue to raise cash without breaching the debt ceiling. If the limit is not increased, those measures will probably be exhausted and the Treasury is likely to run out of cash sometime in late March or early April.”
4. With the divorce bill squared away, Downing Street is keen to move to the next phase of Brexit negotiations, which will be focused on future trade and political relations. Brussels, on the other hand, is adamant that “nothing is agreed until all is agreed” and is taking a strong line on a proposed way forward for the Northern Irish border. In the digital traffic, Michel Barnier and the EU negotiating team seem to be dominating the conversation, as both Hard and Soft Brexit activity in the UK remained stagnant
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