Friday, May 19, 2023

Global currency turmoil and crypto adoption, stock market signals and what it could mean for bitcoin, and more...

“Don't believe anything you read on the net. Except this. Well, including this, I suppose.” – Douglas Adams ||

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WHAT I’M WATCHING

• Crypto adoption. As currency devaluations hurt incomes, crypto’s hedge use cases become more prominent. More on this below.

• Markets feel confident. Yesterday, the S&P 500 reached its highest level since last August. I don’t get it. More on this below.

• China and crypto. Greenland Financial Technology, a subsidiary of China’s Greenland Group, is reportedly planning to apply for a virtual assets license in Hong Kong to be able to trade crypto, carbon credits and NFTs. This is particularly intriguing in that the Greenland Group is a real estate developer 46% owned by the Shanghai government.

• Low activity. BTC spot volumes are back down to multi-year lows, according to data from The Block, and volatility is still languishing. Time to dust of the “coiled spring” metaphor again.

MARKETS

I don’t get it

I’m an analyst, I like things to make sense, and so you can understand how disconcerting recent market moves are to me. Yesterday the S&P 500 reached its highest level since last August, despite the higher cost of debt, persistent inflationary pressures, margin squeeze from wages and waning business confidence. Since October, the leading stock index is up around 17% - a far cry from BTC’s 70% rally from its November lows, but considerable nevertheless.