Australian shares are expected to drop following a volatile session on Wall Street, while bitcoin has surged above $US52,000 — a new record high.
ASX futures were down 19 points (-0.3pc) to 6,806 by 8:10am AEDT.
The Australian dollar was steady (-0.1pc) at 77.5 US cents.
Several major companies will report their earnings today, including ANZ, Coca-Cola Amatil, Crown Resorts, Fortescue Metals, Origin Energy, South32, Santos, Woodside Petroleum and Wesfarmers.
Brent crude oil futures jumped (+1.6pc) $US64.33 a barrel, while spot gold fell (-1.2pc) to $US1,772.96 an ounce.
‘Perfectly legitimate’ speculation
Bitcoin soared to yet another record high, a day after vaulting the $US50,000 hurdle, even as analysts warned against the sustainability of such prices amid elevated volatility.
The world’s biggest digital currency soared to a record $US52,536 on Thursday morning, fuelled by signs that it is winning acceptance among mainstream investors and companies like Tesla, Mastercard and BNY Mellon.
Despite the flurry of mainstream acceptance this year, some analysts warn bitcoin is still far from becoming a widely used form of payment.
“Bitcoin presently is not an efficient manner for high-volume transacting, and it is certainly not a store of value as its price volatility at 80 per cent is a dozen times higher than the euro and sevenfold of the Russian rouble,” said Harley Bassman, managing partner at Simplify Asset Management.
“That said, it is a perfectly legitimate speculative asset, quite similar to Dutch tulips in 1636.
Dutch tulips in the 1600s reached extraordinarily high levels before dramatically collapsing in 1637.
Bitcoin has risen eightfold since last March and has added more than $US700 billion in market value since September.
US markets struggle for direction
On Wall Street, technology-related companies fell sharply as investors rotated out of growth stocks.
Shares in Apple (-1.8pc) and PayPal (-2.5pc) weighed on the tech-heavy Nasdaq , which weighed heavily on the tech-heavy index.
The Nasdaq Composite finished moderately lower (-0.6pc) at 13,966 points.
The S&P 500 was flat at 3,931, while the Dow Jones index rose (+0.3pc) to 31,613 points.
“Investors are just refocusing their attention back on to inflationary worries and perhaps the valuation aspect of the market, especially as it relates to the more technologically-related companies,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
The US Federal Reserve has pledged to pin interest rates near zero until inflation rises to 2 per cent and looks set to exceed that goal.
That stance, coupled with the Biden administration’s proposed $US1.9 trillion spending bill for pandemic relief, has some analysts warning of a coming surge in inflation.
Meanwhile, data showed US retail sales rebounded sharply in January after households received additional pandemic relief money from the government, suggesting a pick-up in economic activity after being restrained by a fresh wave of COVID-19 infections late last year.