Bitcoin’s at $11,500 – Can It Keep Going Higher?

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Ah, Bitcoin – the cryptocurrency that people either love to love, or love to hate. 

Yesterday’s trading session saw Bitcoin break through the $11,500 barrier via a +5% increase over a span of 24 hours. 

Many experts are starting to speculate about what this means. For starters, it’s much too early to call this a bullish run as several key levels need to be reached first. Bitcoin has been as high as $12,000-$13,000, as evidenced by prior bullish runs over the past two years. 

Current levels of resistance include $12,100, $12,500, and $14,000. What you’ll see from now on is a focus on how Bitcoin price action will unfold once it reaches said levels. Will it retrace and fall back down, or will it be able to break through each of these levels? 

Furthermore, we’ll have new levels of support to take note of – $10,500 and $9,500 should Bitcoin reach $12,500 but gradually start to fall down from there. 

Like gold, many investors are starting to see Bitcoin as a potential hedge against the current stock market volatility. And thanks to several banks expressing a great deal of interest in cryptocurrency, the long-term view is Bitcoin’s increasing immersion into the financial world.

In other words, Bitcoin is here to stay for a while and having a few coins in your portfolio isn’t going to hurt you. 

How much Bitcoin do YOU have right now? And how are you trading it – holding on for dear life, or taking advantage of intra-day movements? Reply to this newsletter and let us know! 

How Boeing Can Fix the Disastrous 737 MAX

Good news for Boeing: The Federal Aviation Administration (FAA) has told Boeing exactly what needs to be done to clear the 737 MAX for regular flying again. A clear path has been laid out which could see the aircraft back in service as soon as early 2021

Bad news for Boeing: The suggested advice from the FAA is contained in a dense 136-page document: 36 pages of introduction, and 95 pages summarizing all the changes that need to be done. Training, maintenance, software, hardware – you name it, they got it!

Here are some of the changes that need to be made, according to The Motley Fool:

  • Rerouting the wiring in the place
  • An alert system for when the Maneuvering Characteristics Augmentation System (MCAS) software malfunctions
  • Linking dual sensors to the MCAS software
  • Reducing the power of MCAS 

The last point is especially important, as an ultra-powerful MCAS is what caused the fatal crashes last year. Specifically, when the MCAS received faulty sensor data, the plane’s pitch was significantly affected to the point where pilots could not manually correct it. 

With all the free time Boeing has due to an all-time low in travel demand, let’s hope they can restore life to their once-famous aircraft!

Digital Nomads Coming to A Place Near… the United States?

In the field of economics, there’s a particular phenomenon called “brain drain”:

“…a situation where all or the majority of intelligent, skilled or capable resources within a given field or geographic region leave the area because of various factors including lack of high paying jobs.”

It’s not exclusively limited to third-world workers leaving their countries to work in America. The same thing also happens when people leave rural cities to work in the big cities. 

Fortunately, this “brain drain” to larger cities is gradually dying down due to the rise of domestic nomads: People are traveling to other cities within America, rather than outright leaving the country to work in Europe or Asia. 

As I’ve said numerous times on this newsletter, there’s simply no more need to live in expensive city areas when you can remotely work anywhere. You can do the same work and ideally get paid the same amount by living in a more affordable place. 

Cities such as Dallas, Philadelphia, and Denver are some of the top locations when it comes to monthly rent – both in terms of how much you pay, and the quality of living you get. 

Rather than move to somewhere like NYC and deal with ludicrous rent prices, you can now set up shop somewhere with affordable housing where it was previously impossible to find a high-paying job. And instead of having all of the top talent crammed into a small geographical area, our workforce will be far more spread out and diversified across the country. 

EasyJet’s Flying Schedule Is About to Get Busier, Even During the Pandemic

Even with several European countries locking up their borders due to recent surges in daily COVID-19 infections, passenger demand is slowly but surely rising. And to capitalize on this paradoxical trend, EasyJet’s flying schedule is going to be far busier. 

While they were projected to have a flying capacity of 30% compared to 2019 in the months of July to September, EasyJet plans to boost that number to 40%. While this seems unreasonable, several low-cost airlines such as Ryanair are aiming for as high as 70% capacity next month. 

EasyJet has expressed confidence in the current passenger demand, even though their Q2 2020 results were dismal: 99% decrease in revenue compared to Q2 2019 (sitting at €7 million), and 709 flights compared with 165,656 in the previous year. 

And while Q3 2019 saw a profit of €174 million, Q3 2020 sees a pre-tax loss of €325 million. Their cash burn has come out to €774 million for Q3 2020, which is quite dreadful but still better than the projected €1 billion. 

The future for low-cost airlines is uncertain… while their budget-based model proves to be fruitful for people seeking cheaper flights, their success is far more reliant on frequent flights, which is not so necessary for larger airlines. 

Let’s play this by ear and see how things go!

U.S. Airlines: “We Want More Money, and We Want It Now!”

For those of you who don’t remember, the CARES Act stimulus package launched by the federal government gave out $32 billion in grants and loans to several airlines in America. 

But as part of the deal, jobs cuts had to be suspended until October 1st of the calendar year. 

Seeing as the deadline is fast approaching and travel demand is still 80% lower compared to last year, airlines are now demanding a second round of funding to guarantee they won’t lay off or furlough any more employees. 

The only airline which has “promised” not to issue any layoffs come October 1st is Southwest and even that’s not a guarantee. 

While I can agree with this movement in principle, it makes me wonder how much leverage and power the airlines have over the federal government. 

Just think about it: If October 1st comes around and no more funding is left, we’re talking about tens of thousands of jobs being let go in the blink of an eye. I shouldn’t have to tell you how devastating this would be to the American economy. 

Furthermore, I don’t know how much more money the federal government can afford to dish out to airlines. They may be known as the never-ending printer of artificial money, but I would suspect that everyone has their limits. 

What do YOU think the government should do? Give airlines more money, or let them bleed dry? Reply to this newsletter and tell us which is the lesser of two evils!

Out with Passengers, In with Cargo for Ethiopian Airlines

African-based Ethiopian Airlines has managed to somehow avoid relying on government funding or cutting employee salaries during the pandemic, surviving on 50% of its income… despite 90% of their aircraft being inactive. 

Their secret? Abandoning the wait for passenger demand to return to normal levels and switching to the transportation of cargo instead. On top of tapping in to their current cargo fleet, 25 passenger aircraft have been converted into cargo planes. They are currently shipping to 70 destinations around the world as of this writing. 

It’s not all sunshine and rainbows, however, as Ethiopian Airlines cannot sustain itself off this new business model in the long-term. Eventually, they will have to resort back to flying passengers (which is how the majority of their income was made prior to COVID-19). 

Unless travel demand amongst leisurely and business travelers starts to improve, Ethiopian Airlines may not keep up their success for much longer. After all, their business model heavily relies on shuttling travelers between Africa and the rest of the world. 

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