With rapid progress made on the coronavirus front, at least in terms of vaccinations, and central banks around the world maintaining an accommodating stance, markets closed last week on a risk-on note. The S&P and the Dow reached new highs, the Nasdaq printed a strong green candle. The 10-year yield seems to remain in range, between 1.6% and 1.75%. Gold is retracing.
Investors seem to be more interested in crypto than in gold. Over the weekend, BTC revisited -but didn’t breach- its previous all-time high, at around $61,500. We’re now closing the Sunday session at $59,900, or up about 3%. Perps funding rates hit were close to all-time highs.
During the weekend, the BTC dominance index fell further. This is beautiful to watch for any diversified crypto holder. We’re now at 55.80, highlighting how well alts outperformed in the past weekend -but really in the past month.
While ETH just gained 3.5% over the weekend, ADA managed about 5.5%, LINK almost rose 7%. LTC gained 15% on Saturday. We also saw a flurry of privacy coins (think DASH, XMR, ZEC) with about 10-15% gains.
While the risk-on tilt in traditional markets certainly helps, solid fundamentals directly linked to crypto supported the recent push up.
Maybe one of the most obvious trends is the rapid growth of BTC-linked investment products. For example, over the weekend, the Purpose Bitcoin ETF hit $1 Bn worth of BTC holding, and that’s just one among many.
It was also great to spot another large BTC outflow from COINBASE (as a reminder, this suggests large institutions bought and then withdrew to hold, which is supportive of price at current levels).
More towards alts and DeFi we saw first the CME Futures on ETH hit a new all-time high both in terms of volume and open-interest. Away from institutional activity, so many traders allocated to DeFi project that the total value locked in the DeFi space is the equivalent of the Top 40 US banks… Time to wake up.
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