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Morning‌‌ ‌‌Update—June 10th—Macro and Crypto Markets

Morning‌‌ ‌‌Update—June 10th—Macro and Crypto Markets

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Rated:115

While global investors seem to believe in a recovering economy, inflation data coming through later today, in the US, has left most of them selling risk assets for now. Stocks retreated and bonds were bought, pushing the 10-year yield down below 1.5%. Gold also edged down lower.

I suspect there are interesting dynamics affecting crypto markets in relation to macro markets namely: the rotation of capital from crypto gains to tech stocks that had previously been sold massively and, more recently, the pick up in inflation.

On the session, crypto decidedly bounced back from the previous down day. BTC was the leader and outperformer, rising more than 11% and taking us from $31,000 back above $37,000.

The BTC Dominance index rose, showing that alts didn’t match the advance. They’re up though. ETH gained almost 4%. It’s worth noting that ETH wasn’t sold off as much as BTC and so probably had less impetus for a massive move up. ZEC rose almost 10% along with other privacy coins -maybe due to the Chinese crackdown or the pick-up in regulation globally. DOT and LINK advanced around 5%.

Looking at the news, I have to mention the bill in El Salvador passing to make BTC legal tender. This is a truly historic and momentous event for the country and for the crypto space. It means people will have to accept BTC for commercial transactions and have the right to hold, account and pay taxes in BTC. It’s worth noting that they have the choice to stick to USD if they so choose. I think this type of adoption can happen slowly and then all at once, and we might see more countries making similar moves in the future.

While they might not be countries, it was great to also hear from two large financial firms looking to enter the space, I’m talking about Interactive Brokers which should offer crypto trading sometime this summer and also Victory Capital (a massive asset management firm with $160 billion in AUM) announcing that they plan to allocate to crypto.

That being said, China is still cracking down on crypto, by blocking search engines from showing crypto exchange websites and also arresting a large number of people on crypto related money laundering charges.

To finish with some interesting data, Glassnode’s binary CDD, essentially looking at the on-chain movement of old coins relative to previous periods, seems to show we are back into ‘pre-bull’ accumulation, suggesting we might be forming a base of longer term holders.