Two technicians inspect Bitcoin mining at Bitfarms in Quebec.
LARS HAGBERG/AFP via Getty ImagesBitcoin is down 4.3%—and though it might not seem like it, that’s good news.
If Bitcoin were the stock market, Tuesday’s drop would be frightening. For Bitcoin, it’s nothing. The cryptocurrency has moved less than 5% only one other time in the past week. What’s more, the spread between Tuesday’s high and low price is roughly 8%. Coming into Tuesday, the daily spread has averaged 21% over the past week. The level of volatility has been extreme—even for Bitcoin. Now, it’s calming down.
Falling daily volatility is a sign the recent selling frenzy in Bitcoin may be running out of steam. The cryptocurrency, remember, dropped from a peak near $65,000 into the low $30,000s, with the volatility driven by concerns about regulation, the environmental impact of mining, and comments from Tesla CEO Elon Musk.
Now, Bitcoin looks oversold, according to Fairlead Strategies market technician Katie Stockton, who said the crypto was likely to find support near $34,000. She is bullish on Bitcoin in the long run, despite the recent correction.
But even optimists have to acknowledge just how wild trading can be. “Bitcoin lost more than half its value after peaking near $65K in April,” Stockton wrote in her Monday report. “That serves as a reminder of the volatility inherent to cryptocurrencies.”
Volatility won’t go away, but the current correction eventually will.
—Al Root
*** In this week’s Barron’s Streetwise podcast, Noodles & Company CEO Dave Boennighausen talks about his turnaround and tortelloni, and keeping workers. Plus, Nino’s in southwestern Pennsylvania is short on staff and Chianti. Listen here.
***
George Floyd’s Family to Visit White House on First Anniversary of His Death
President Joe Biden had hoped to sign into law the George Floyd Justice in Policing Act by the first anniversary of the Minnesota man’s death. Instead, Biden is inviting Floyd’s mother, siblings, and other family members to remember him at a private ceremony at the White House.
- The bill, which has passed in the House, aims to prevent racial profiling, limit use of deadly force, prohibit no-knock warrants and chokeholds, make officers undergo training, and require them to intervene when other officers use excessive force. It would also create a National Police Misconduct Registry.
- Floyd, a Black man, died last May 25, sparking international protests against police brutality. Former Minneapolis police officer Derek Chauvin, who is white, was convicted of Floyd’s murder and manslaughter and will be sentenced June 16.
- “We have to come together to rebuild trust between law enforcement and the people they serve, to root out systemic racism in our criminal justice system, and to enact police reform in George Floyd’s name,” Biden said in April after the House voted to pass the bill 220-212.
- Sen. Cory Booker (D., N.J.), on Sunday told CNN that while advocates of the bill have made “meaningful progress” in the Senate, Democrats and Republicans disagree over ending qualified immunity, which shields police officers who violate others’ civil rights from civil lawsuits. “We need this to create real accountability,” he said.
What’s Next: Congress isn’t planning another vote on the issue soon. White House press secretary Jen Psaki said Biden is “eager to listen” to the family’s perspectives and that he will continue to press the issue.
—Janet H. Cho
***
Another Big Possible Media Deal With an Eye to Streaming
There’s another blockbuster Hollywood deal in the works. Streaming giant Amazon.com is in negotiations with MGM Holdings on a deal worth a potential $9 billion including debt, The Wall Street Journal reports.
- It would be Amazon’s second-largest acquisition in history, after the $13.7 billion purchase of Whole Foods in 2017.
- The deal size is nearly twice what the privately traded MGM was valued around last December, the Journal reported, some $5.5 billion, including debt. It highlights the value that content commands as the streaming wars force consolidation among the biggest operators.
- Word of the deal emerged when AT&T agreed to combine its media assets with Discovery and form a new company that would rank third in streaming behind Netflix and Disney.
What’s Next: A deal could be announced this week if talks don’t break down, the Journal reported. Amazon and MGM have been on-again, off-again since the start of this year, the report said, and the MGM board was briefed on the matter Sunday night.
—Liz Moyer
***
Pressure Rises on Tokyo Olympics Amid Covid Outbreak
The U.S. State Department on Monday warned Americans not to travel to Japan, citing a Covid outbreak, with 794 deaths reported in the past week. That adds more pressure on the Tokyo Olympics, scheduled for July 23 to Aug. 8, as critics continue to call for the event’s cancellation.
- The U.S.’s bulletin, at Level 4, is the highest warning to citizens and applies to travel to Sri Lanka.
- In a post on Twitter, SoftBank Group CEO Masayoshi Son warned about the potential danger to lives and to Japan’s economy, saying “I think we could have a lot more to lose” than the penalties from canceling the Games. Only 2% of Japan’s population is fully vaccinated, per Johns Hopkins.
- The 6,000-member Tokyo Medical Practitioners’ Association and Tokyo Medical Association oppose hosting the Games. Games organizers said 10,000 medical workers are needed, that 80% of the athletes and officials will be vaccinated, and that participants will be tested daily.
- Singapore, Taiwan, Vietnam, Cambodia, Laos and Thailand have all reported new outbreaks, with cases traced to incoming travelers, airports, or to variants from outside their borders. Cases have also risen in Nepal, including at least 100 climbers and support staff at Mount Everest.
What’s Next: International Olympic Committee Vice Chairman John Coates has said the games would absolutely go ahead, even if Tokyo remains under a state of emergency.
—Janet H. Cho
***
New York City Schools Will Return to In-Person Classes
New York City public schools won’t offer online education this fall, as more states signal a return to normalcy in the U.S. is near.
- Pointing to vaccinations and falling cases, New York City Mayor Bill de Blasio said students at city public schools will attend in-person classes with no remote option.
- Los Angeles Unified School District Superintendent Austin Beutner also announced a return to class five days a week, though that district will still offer online class options.
- New Jersey Gov. Phil Murphy said starting May 28, there will no longer be social distancing requirements for indoor and outdoor businesses. The state’s mask mandate will also be lifted. On June 4, the state will drop indoor gathering limits, including at concert venues.
What’s Next: The relaxed restrictions come as the Centers for Disease Control and Prevention say 61.5% of U.S. adults have at least received one Covid-19 vaccination, compared with 49.4% of the entire U.S. population.
—Connor Smith
***
British Competition Watchdog to Investigate AstraZeneca’s $39 Billion Takeover of Alexion
The U.K.’s Competition and Markets Authority said on Tuesday it was opening a consultation on the $39 billion planned takeover of U.S. drugmaker Alexion Pharmaceuticals to determine whether it would adversely affect competition.
- The watchdog is trying to assess whether the merger “may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
- The CMA said in a release that it was opening a consultation and inviting comments with the aim of reaching a preliminary decision by a tentative deadline of July 1.
- Anglo-Swedish pharmaceuticals group AstraZeneca, one of the largest manufacturers of Covid-19 vaccines, announced in December an agreement to acquire Alexion and its portfolio of rare-disease drugs such as the bestselling Soliris, in an attempt at diversification from its main cancer drug business.
- The deal, which would be financed by a $25 billion capital increase once it is concluded, was approved by AstraZeneca shareholders two weeks ago. It has already been approved by U.S. and Canadian authorities.
What’s Next: The CMA decision is a procedural, quasi-routine announcement that the consultation of interested parties is formally opened. The crucial decision will come in two months’ time, when the watchdog will announce whether it deems the merger worthy of a so-called phase 2 investigation, a more in-depth probe of its competition impact.
—Pierre Briançon
***
Be sure to join this month’s Barron’s Daily virtual stock exchange challenge and show us your stuff.
Each month, we’ll start a new challenge and invite newsletter readers—you!—to build a portfolio using virtual money and compete against the Barron’s and MarketWatch community.
Everyone will start with the same amount and can trade as often or as little as they choose. We’ll track the leaders and, at the end of the challenge, the winner whose portfolio has the most value will be announced in The Barron’s Daily newsletter.
Are you ready to compete? Join the challenge and pick your stocks here.
***
—Newsletter edited by Stacy Ozol, Mary Romano, Liz Moyer, Matt Bemer, Ben Levisohn
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