Institutional Love in the Time of Cholera
Cryptic ball: time to keep reading.
Not much has changed in sentiment since yesterday, except that more and more bears are in disbelief with bitcoin, ether, and alternative cryptoassets pumping in tandem, with total market cap rising 5.8% over the past 24 hours. What's interesting here is seeing that the leading orange coin jumped 5.2% while ether is up 7% and several top 100 alts between 10% and 20%. Alas, Ethereum Classic - the original Ethereum chain which was abandoned after the infamous DAO hack and the subsequent hard fork which took place exactly five years ago - is even up 30%!
That's likely because it's one of the few sh*tcoins available on RobinHood, the popular trading app used by millions of American millennials, but not only. Which brings us to another important correlation we've briefly covered here on May 18th in a well-timed anticipation of the next day's crash: crypto vs. tech stocks. Back in May, we told you to keep following tech stocks as they were dumping hard and this weakness could mean institutional investors were first de-risking their equities and crypto would follow after, as such relationship had been observed before.
Chart art: time to add another indicator to the list.
Market musings: time to eat cheese.
What's behind that relationship? As cryptoasset adoption by institutions grows, the market is naturally more influenced by rational investors - something which clearly didn't happen in the previous bull runs. As the US Fed became more hawkish, i.e. hinted it was prone to put the brakes on asset purchases and rise interest rates to fight inflation, global markets felt their money shouldn't on risky assets like tech stocks, where huge allocations exist, and crypto, which so far only represents a minuscule portion of global portfolios.
Now it's party time again, because, as explained over the past week, the markets calmed down and believe that the Fed really believes inflation is transitory and that the most central bank will continue to prop up the economy. What's nicer is that, as better explained by Jonathan Cheeseman - former HSBC executive and FTX's Head of Institutional Sales - it seems yesterday was "a monster session for tech equities" and Nasdaq was "powered to all time highs". Riskier tech stocks are lagging and crypto is just recovering, which means further upside is expected.
Visual block: time to research alts.
Three things: time to party while the lights are on.
- Arthur Hayes, former CEO of BitMEX, is back. Again, everything this man writes is pure gold, regardless of topic, so we must ask you to read it. In this case, to pique your interest, it's about how inflation is not transitory!
- Deribit Insights is one of the best crypto blogs around. This time we recommend Jason Choi's first article which explains the "China FUD" and helps you understand "China’s Recent Crypto Regulations".
- Kraken Intelligence produces the nicest pdf reports you can easily share with your bosses. But now it's not about crypto, but about our newest and fiendish foe: learn more about "Inflation, the Insidious Thief".
Tweet tip: time to tip more than tweet.
Meme moment: time to bring back Ethereum's narratives.
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