Yesterday, traditional market traded mixed, in Europe and in the US, with conflicting news of covid variants but also soon-to-come lifting of restrictions in the UK, then an inflation spike but in very specific products/industry and then also a positive development with regards to labour, where demand outpaces the supply.
Ultimately, equity indexes retraced moderately, while most of the other assets like commodities or precious metals stayed in place. One exception, though, it’s fascinating to see the price of lumber fall further down these days, to levels not seen since the beginning of the year and might signal less demand for construction material.
In crypto, we saw barely more decided moves. BTC fell but barely 1.5%, from $33,000 to now $32,250. It’s interesting because inflation fears are long-term supportive of the bitcoin thesis but, it seems, short-term negative as it weighs on risk assets like equities and even gold nowadays.
Alts are very clearly underperforming across the board. Some are holding better than others, like STX, MKR, VET or ADA, down about 2-4%. But others are doing worse, like COMP, AAVE, LUNA down between 7% and 9%.
There’s quite a lot of news to look at, some positive and some negative.
Google searches for BTC hit a 7-month low which unfortunately can’t really be seen as a contrarian indicator; it right out means that less people are curious about the asset class or searching ways to get involved. Granted, the interest is higher than several years prior, but it still shows a downtrend.
On the more positive side, we heard about the S&P announcing new indexes, including one that will track more than 200 cryptocurrencies. It might not sound like much but I suspect it will go a long way to help traditional investors look at, stay aware of and understand the space.
Lastly, it was great to hear about BNY Mellon working with GBTC to essentially help them convert their fund into an ETF that would then be supported by the bank. It will make it a much more investable and agile product to trade and so is supportive of more capital flowing in.
That’s it. We’re still range-bound and above the lower 30K support zone for BTC, let’s see if the longer we settle down there, the stronger we can rise up.
For my readers I'm also adding this chart showing the fall in hashing power related to different Chinese crack-downs and regulatory announcements.
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