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Traditional markets feel… toppy? From many angles or data points, a lot of assets are just overextended or at high valuations. That doesn’t mean they can’t go up further and for a long-time, just that the impetus to go higher might be weaker and the impetus to go lower might be stronger.
This week, investors got a lot of results from companies, reporting earnings from the second quarter; the results were good but stocks dropped, still. It seems that inflation fears are the main driver and that it’s pushing people to reconsider price, risk profile and allocation. Along with stocks, bond yields fell as well, while gold -the inflation hedge- rises.
Based on the above, one would expect BTC to rise as well. It didn’t. It’s just fascinating to see the range-bound narrative annihilate any impact from other macro events. The isolation deepens. But this reminds me of the summer of last year; equities were making new highs while BTC was the most boring asset around, trading sideways… then we know what happened after the consolidation was done: DeFi pumped, ETH rose, BTC then led a massive bull run.
On the session, BTC fell about 3%, from $32,800 to now $31,800. The BTC dominance fell, so alts gained market share, slightly. Among the better performers KSM, MKR and STX (always STX, these days). AAVE, ADA and COMP also showed some outperformance relative to BTC, even if they’re down in dollar terms.
Away from price action, there’s a flurry of quick one-line news which I want to list out: J.C. Flowers is set to acquire a 30% stake in LMAX, to accelerate growth in FX and crypto markets.
As expected, Paraguay has drafted a bill that would set regulation around bitcoin and digital assets, with the view of enabling them for commercial and individual level transactions. We need to keep track of those news, they’re the slow build-up of crypto infiltrating global finance.
A great chart from Glassnode shows that the hash rate is starting to recover. This is a natural result of Chinese miners stopping operations and then re-opening elsewhere or other players buying the machines for themselves.
PayPal just increased the crypto purchase limit to $100,000 per week. Seeing massive demand?
Square is also in the loop, rumoured to create a new company focused on non-custodial, permissionless, and decentralised financial services (with a focus on Bitcoin). Make of that what you will.
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