A 40 year high
3 min read

A 40 year high

Cryptic ball: a fear spike.

Note: Mailgun had some issues Thursday which seemingly affected the delivery of the past two newsletters. Here's the one which I tried sending 24 hours ago.

The latest CPI data has been released and the market is digesting the news. YoY inflation in the US this May stands at 8.6%, higher than the 8.3% forecast shared yesterday. MoM we're at 1%, also higher than the 0.7% consensus. What's next?

  • As anticipated in yesterday's newsletter, bears are attacking - equity futures and crypto have started falling as this data shows that inflation isn't peaking yet. Remember this is the highest reading since 1981 in the US!
  • Naturally, sentiment is getting worse as the S&P 500 is about to fall below 4,000 and has failed to break the 4,100 resistance. AlgodTrading, who rose to fame as an early shorter of Terra's LUNA, even argues this is just like 2018.
  • I'm not that pessimistic in the long term as I agree that "the market structure is fundamentally different". Still, note I've been urging caution since last December, arguing that crypto would slow bleed until at least next September.
  • I maintain that view, noting that the rest of June will be critical to see if global markets survive such removal of liquidity from the system - and then things could eventually return to "normal" in Q3 - or if this is indeed like 2018.

Let's see how US stocks behave over the rest of the day and I'll be back tomorrow to comment on the weekend ahead. In any case, some stock analysts I respect believe we're about to see the next leg down and that the bottom isn't in!

Chart art: an earnings slump.

Higher costs hurt profits which hurt stock prices as these depend on earnings expectations. Then, lower stock prices hurt the global risk appetite which hurts cryptoassets!

Three things: some deep reckoning.

Tweet tip: some mediocre alpha.

What about crypto traders?

Meme moment: some solid friendship.


Credit goes to @FOMOcap, because we can't let energy prices run higher, right?

FV Bank: where to find alpha.

Miles Paschini, co-founder and CEO of FV Bank, will be speaking at the Grit Daily House Media Stage, the official side event of Consensus, on a panel about "Where to Find Alpha in 2022" with Caitlin Long and Stefan Rust.

Get started: download the B21 Crypto app!

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Our newsletter offers opinions and insights from analysts in the cryptoasset space. It is not intended to be investment advice, and should not be treated as such. You must not rely on its information as an alternative to financial advice from a qualified professional. Without prejudice, we do not undertake or guarantee that its information is correct, complete or non-misleading; or that the use of the guidance in the report will lead to any particular outcome or result.