Cryptic ball: the Fed woke up well.
Bitcoin is above $42k after momentarily testing $39k yesterday, while dragging down the rest of the cryptoasset market. American equities have also recovered, with the S&P 500 strongly bouncing from Monday's scary low. And, as this newsletter is being sent out, Jerome Powell - the chair of the Federal Reserve, USA's central bank - has just announced the latest policy changes.
Everyone was anxious to know if the powerful decision-maker would provide further clarity on the tapering of its monetary stimulus program which is currently sustaining the global bull run (Chinese stocks apart, of course). And with the current volatility and overall weakness in the markets due to the Evergrand conundrum (which is kind of behind us), it was expected that the Fed would indeed share an optimistic view to keep bulls alive for a little while longer.
Did that happen? Kind of. Interest rates remain the same, but it was hinted that tapering would be coming "soon". But soon isn't now and that's what matters! US stocks started pumping again and so did the whole cryptoasset market! This implies bullish spirits will remain strong until tapering is indeed announced, possibly in November or December - which is aligned with our expectation that we'll see a 2017-like blow-off top by the end of the year. WAGMI!
Chart art: US stocks are leading crypto.
Market musings: it's all about the simple things.
A popular macro strategist recently mused about having never seen "a bull market that was viewed with such scepticism", referring to equities, not crypto, and implying we're far from the euphoria levels typically seen at the top of a cycle. We agree and hope this reminds you to check your feelings and the overall sentiment in the cryptoshere over the next months. It's that simple.
Visual block: remember to buy the fear.
Three things: and to overcome the fear.
- There's only one thing to read today: Mark Dow is another popular macro investor who shorted the BTC top in 2017. He recently surfaced an old post of his where he talks about the two key themes for investing today - it's all about overcoming the bearish myopia that the next crisis is always around the corner.