Traditional markets were mostly moved, yesterday, by inflation data coming out. Numbers are better than expected and hint at a pause in the incessant ramp up we’ve observed recently. Bonds were bought, pushing yields lower, and investors also bought equities. The S&P and the Dow both printed a strong green candle and reached new highs. Gold is recouping somehow.
In the crypto space, we’re seeing none of those big moves, if anything BTC is staying put, closing essentially flat at $45,500 (which isn’t a bad place to pause at, by the way).
The metric that did move is the BTC dominance index, which fell all the way to 45.5. So, just like they did the day before, alts really held up their own on the session. The outperformers are MATIC, up a fantastic 18%, NANO gaining 10%, ADA still rising for the third consecutive day and a total gain of 25%. Then one can look at pretty much any alt, say, XTZ, LUNA, VET, AAVE, DOT and see an out performance of at least a few percent.
The dynamic here is pretty clear and makes me feel optimistic. As BTC strengthens and gains, the crypto space as a whole feels ‘safer’ (?), and investors who now expect a new wave up will pile in to admittedly more volatile or speculative projects (alts). So, one expects that if BTC is to rise another 100%, coins like MATIC, or AAVE, or DOT might rise by 200% or 300%. Whether they’re right or not remains to be seen.
News that was supportive is COINBASE saying that ten of the top 100 hedge funds by AUM are among its clientele. A humble brag for sure but also telling that funds of that size are already plugged in to crypto exchanges and finding a way to trade or at least get long exposure.
On that note, exchange volume for crypto is on pace to reach $16 trillion this year, up more than 8-fold from last year, which means that the activity by central banks and in macro markets along with the value proposition of cryptocurrencies and blockchain really hasn’t gone unnoticed.
Among quick but noteworthy news, the PolyNetwork hackers have started returning some of the funds taken away from the Matic, BSC and Ethereum network, asking for donations and also enjoying the fame that comes with pulling off such a stunt.
Lastly, and less fun, the SEC chair Gary Gensler is asking Senator Warren for more regulatory authority over crypto. This could go very right, or very wrong.
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