The battle of the narratives

Plus, a forest of stablecoins

“The strongest of all warriors are these two - Time and Patience.” – Leo Tolstoy ||

Hello everyone, I hope you’re all doing well and managing to hang on to your sanity!

Crazy times – the other day I was remembering back when I was working in tradfi and politics felt like background noise. As an analyst, I spent my time looking at value stocks, scouring balance sheets, calling up companies with questions. The mists of time, as they are wont to do, make all that seem so innocent in comparison to the noise of today.

Today, I look at what’s behind yesterday’s market drop. And I applaud the recent proliferation of planned stablecoin issuance. It could be chaotic, but let’s give the market some choice and let it decide.

Later today at around 10:30amET, unless plans change, I’m on Yahoo Finance TV – I don’t have a link to share, perhaps tomorrow.

Programming note: this newsletter has to skip publication on Friday, 28th. Here’s hoping nothing dramatic happens on Thursday!

IN THIS NEWSLETTER:

• The battle of the narratives

• A forest of stablecoins

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WHAT I’M WATCHING:

The battle of the narratives

Yesterday, I commented on how resilient crypto markets were even in the face of the largest crypto hack in history. Well, ha.

I also looked at building market nerves given signs of a weakening economy and escalating geopolitical tension.

It turns out that, once traditional markets opened after the weekend break, nerves trumped resilience, and yesterday was rough for both stocks and crypto. The traditional “safe havens” of gold and treasuries did well.

At first, it looked like the S&P 500 was going to bounce after Friday’s sharp drop. But no, after initial Monday morning enthusiasm, sellers took over, bringing losses for the day to -0.5%, and for the past week down to 2.3%.

(S&P 500 chart via TradingView)

Crypto assets, true to form, took that trend and ran with it. Late yesterday, BTC dropped below $90,000 for the first time since November of last year, and this morning has continued to head down, briefly dipping below $87,000 moments ago. Since early last Friday, the asset is down almost 10%.

(BTC/USD chart via TradingView)

ETH has fared slightly worse, down almost 11% over the same timeframe.

(ETH/USD chart via TradingView)

Given the timing, it could look like the crypto move is a delayed reaction to the Bybit hack – but I don’t think so.