Cryptic ball: shall move on.
As anticipated, not much is happening across most global markets today - given tomorrow's interest rate hike announcement at the Fed's FOMC press conference. The CEO of Coinbase predicted crypto will have one billion users in a decade, but I'm sure you're more concerned with what happens tomorrow. Let's dive.
- Firstly, most have forgotten Otherside's metaverse hyped and congested land sale, which spiked Ethereum's gas fees to the largest average price in the history of the popular dApps platform. That's good. Just like last summer everyone talked about AxieInfinity, the crypto crowd shall ape on once they understand the ponzinomics behind such raises, as Charles explains below.
- Back to the stock market, most indexes are bouncing wildly and I'm expecting the bounce to increase in intensity before yesterday's announcement, as more and more people understand the Fed is not going to do anything other than what the market has already priced in. We don't need much to rally as those who are short will likely cover their positions, adding buying pressure.
- Such an effect will surely overflow to crypto markets, so I'm expecting the rest of the week to be rather green, even if no spectacular pump shall take place. Still, a 0.5% interest rate hike is bad for risk-on assets as it sucks liquidity out of the economy in order to tame inflation. And that's the same liquidity used to bet on the orange coin and the various not so non-fungible apes.
All-in-all, remember April 2021 was the worse month for US tech stocks since October 2008 - so May will only be worse if the central bankers decide it's time to close the party, something which won't happen without a clear political mandate.
Let's see how the politicians react to this, but I bet it's time for more sideways action with some short-term relief. At least until the first algorithmic stablecoin loses its pegs and implodes the wider ecosystem. May the force be with you!
Chart art: shall wake up.
Three things: shall decentralise further.
- Punk 638 explains "how best to position for Ethereum's Merge".
- Charles explains why "scarce virtual land is not only unethical, but it's almost certainly a losing strategy".
- Preston Byrne explains "how (and why) to build decentralized Twitter".