Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

Mike Novogratz, the founder and chief executive officer of Galaxy Digital Holdings Ltd., said that cryptocurrencies are closer to a “bottom” than the U.S. equity market. Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

* Galaxy Founder Makes Comment At Morgan Stanley Conference
* Ether To Hold Around $1,000, Bitcoin At $20,000 Level, He Says

Both sectors tumbled Monday as investors brace for a more hawkish Federal Reserve to ratchet up interest rates, raising the risk of a US recession. Crypto has been especially hit hard with the lending platform Celsius halting withdrawals on Monday.

$35 TRILLION Global Stock Market Meltdown!!! (#GotBitcoin)

When World’s Central Banks Get It Wrong, Guess Who Pays The Price😂😹🤣 (#GotBitcoin)

Ultimate Resource On Insider Trading

A Comprehensive Analysis of The Jeffrey Epstein Case

Ultimate Resource For Money Laundering, Spoofing, Market-Rigging, Etc. In Banking Industry

Bitcoin, the largest digital asset, fell as much as 17% to $22,603, while smaller rival Ether dropped as much as 21% to $1,165. They’ve slumped 67% and 74% respectively since hitting record highs in early November.

“Ethereum should hold around $1,000 and it’s $1,200 right now. Bitcoin is around $20,000, $21,000 and it is $23,000, so you are much closer to the bottom in crypto than you are where I think, stocks, are going to have another 15% to 20%” decline, Novogratz said at the Morgan Stanley Financials Conference.

The benchmark S&P 500 Index has declined about 22% from its record high in early January.

“Until I see the Fed flinch, until I really think, OK the economy is so bad, and the Fed is going to have to stop hiking and even think about cutting, I don’t think it is time to really deploy lots of capital,” Novogratz said.

Updated: 6-10-2022

Crypto Washout Sends Major Coins to Lowest Levels of the Year

* Ether Drops Below Low Set After Collapse Of Terra Blockchain
* Solana, Cordano Tumble As ‘Crypto Winter’ Carries Into Spring

Losses in cryptocurrencies deepened Friday, with everything from Bitcoin to Ether to Solana either setting or approaching their lowest levels of the year.

The MVIS CryptoCompare Digital Assets 100 Index, a market cap-weighted measure which tracks the performance of the 100 largest tokens, declined 4.9%, bringing the drawdown for the year to almost 50%.

Bitcoin, which accounts for almost half the index, slumped for a fourth day. Ether, which makes up about 18%, breached an earlier low set at the start of May after the collapse of the Terra blockchain. Popular DeFi tokens such as Solana and Cardano fell even more.

“We are entering into a crypto winter,” said Paul Veradittakit, a partner at Pantera Capital Management. “Capital is going to consolidate with the larger cap coins like BTC and ETH for the time being.”

Investors are increasingly saying the market is in the midst of crypto winter, as extended period of declines have become known over the years.

Last week, Gemini Trust, run by the Winklevoss brothers, laid off 10% of employees citing worsening market conditions. Coinbase Global Inc., the biggest US cryptocurrency exchange, froze hiring and rescinded some job offers.

While crypto prices have been dropping since early November, when Bitcoin reached its all-time high, the declines accelerated after the collapse of the TerraUSD (UST) stablecoin and related Luna cryptocurrency that resulted in losses of tens of billions in market value.

The market is also digesting bad economic news, which had hit tech stocks — which many coins have shown correlation to — particularly hard. Data released Friday on US consumer prices showed inflation continues to accelerate.

“The only event that mattered for markets this week was CPI, and the data yet again proved inflation is far from under control, which leads to higher interest rates, stronger dollar, lower stock and digital asset prices as investors continue to increase the probability of more rate hikes and a hard landing leading to recession,” said Jeff Dorman, chief investment officer at Arca.

Updated: 6-12-2022

Who Pays For Crypto’s Collapse?

The more than $500 billion in non-bitcoin investor losses will attract lawsuits.

Is anyone liable for the $1.5 trillion in recent crypto losses? Maybe so. After every market downturn, the class-action crowd canvasses the carnage looking for whom to blame—and then sues the pants off them. With so many stocks down 80% to 90%, such as Carvana and Robinhood, the pickings are plentiful.

But most public companies have smart lawyers who sprinkle protective legalese like “safe harbors” and pad their registration statements’ risk section. Most securities suits are settled, basically to pay lawyers to go away.

But this cycle had something new: crypto craziness. The Federal Trade Commission reports that 46,000 people have reported losing $1 billion in crypto to scams since January 2021. Bitcoin is down more than 50% since its 2021 peak, Ethereum is down 65%, XRP 78%.

And of course, the Luna token is down from $116 on April 5 to essentially zero. Is anyone liable? Binance, FTX, Coinbase, Kraken, Bitfinex and Crypto.com are some of the largest exchanges for crypto trading.

Class actions will follow the money. Kim Kardashian and boxer Floyd “Money” Mayweather Jr. are being sued for false statements promoting crypto. But that’s nothing! The trillion-and-a-half-dollar question is: Are cryptocurrencies securities or not?

Selling unregistered securities can be a felony, with up to five years in jail, and damages could include the dollar amount of an investors’ losses or more.

A 1946 Supreme Court case, Securities and Exchange Commission v. W.J. Howey Co., established the test that determines whether something is a security under the Securities Act of 1933 and subject to registration and reporting requirements.

It is a four-criteria test, summarized as: A security requires an investment in a common enterprise with expectations of profit via efforts by others.

I don’t think any cryptocurrencies have registered as securities. But crypto creators can’t say they weren’t warned.

In 2017 then-SEC Chairman Jay Clayton cautioned “market participants against promoting or touting the offer and sale of coins without first determining whether the securities laws apply to those actions.”

In 2019 the SEC ruled in a letter that bitcoin specifically failed the Howey test, meeting only the “investment” criteria. I see it differently, but no matter—the rest of crypto is still in flux.

In 2018, before his tenure as SEC chairman, Gary Gensler told a Massachusetts Institute of Technology class that Ethereum would pass the Howey test but has since waffled.

In January he told CNBC that many cryptocurrency projects “are investment contracts, they are securities, and they should register.”

Some early lawsuits have failed. A suit against Binance was dismissed in March for “untimeliness” and “extraterritoriality.” In November 2021, a Connecticut jury found that four small cryptocurrencies failed the Howey test, ending a class-action suit.

Meanwhile, the SEC has sued Ripple Labs, claiming its XRP digital assets are securities. The case is pending. Ripple has disputed the SEC’s allegations and noted the importance of the case for the whole industry.

But in March, Underwood v. Coinbase Global was filed, claiming 79 different digital assets on the platform, including XRP, were securities that pass the Howey test. The plaintiffs argue that Coinbase, as an exchange under Section 3(a)(1) of the Securities Act and a broker-dealer, is liable for trading “unregistered securities.”

My spreadsheet isn’t big enough to add up the total decline in value of all 79 digital assets since their peaks, but XRP alone represents around $65 billion lost. My guess is the total loss is $100 billion for all assets, although not all of it traded on Coinbase on the way up.

Once worth $100 billion, Coinbase is currently worth $13 billion with about $6 billion in cash on hand. Losing could seriously hurt.

So is Ethereum or XRP or Luna an unregistered security? Unlike bitcoin, which is a decentralized dream, the others are the works of known enterprises that pitch the use of their products for payments and smart contracts.

XRP claims: “Our proven technology and global network enable remittances, SME payments, disbursements and treasury flows.” It charges fees to enable these services. My sense is that XRP’s value is derived from enterprise profits resulting from the work of others. Howey wowie!

Ethereum claims: “Smart contracts are a type of Ethereum account. This means they have a balance and they can send transactions over the network. However they’re not controlled by a user, instead they are deployed to the network and run as programmed.”

If an entity promotes its assets as products to do payment transfers or smart contracts, doesn’t that make those assets part of a profit-seeking entity run by others?

Ethereum claims its fees, known as “gas,” are “essential to the Ethereum network. It is the fuel that allows it to operate.”

Luna similarly claims that its “gas is a small computational fee that covers the cost of processing a transaction.” This is a key point. Unlike a commodity such as gold or oil, only Howey-passing entities can charge fees.

A jury will decide, but if it looks like a duck and quacks like a duck, then it’s a security. More than $500 billion in non-bitcoin investor losses will likely attract a lot of class-action lawsuits. Lawyers, not coders, might determine the future of crypto.

Crypto Market Sinks Below $1 Trillion After Latest DeFi Blowup

* Selloff Comes As Traders Boost Bets For Fed Tightening
* Celsius Paused Withdrawals, Swaps And Transfers On Platform

Bitcoin plunged to the lowest in about 18 months after the freezing of withdrawals by the Celsius lending platform added to concern that systemic risk in the crypto ecosystem will accelerate the digital-asset market meltdown.

The world’s largest digital token tumbled as much as 17% to $22,603 — its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued.

The MVIS CryptoCompare Digital Assets 100 Index, which measures 100 of the top tokens, dropped as much as 17%. And the total market value, which topped $3 trillion in November, dropped below $1 trillion during New York trading hours on Monday, according to CoinGecko.

“The fundamentals to support stabilization and recovery just aren’t there,” said Steven McClurg, co-founder and CIO at crypto fund manager Valkyrie Investments. “Things can and likely will get worse before they get better.”

The shares of companies that have embraced crypto also tumbled. MicroStrategy Inc., the software company that made buying Bitcoin as part of its corporate strategy, fell 25%. Jack Dorsey’s Block Inc. dropped 13%. Bitcoin miners Marathon Digital Holdings Inc. and Riot Blockchain Inc. slumped 12% and 10%, respectively.

Binance, the largest crypto trading platform, temporarily suspended withdrawals of the Bitcoin network because of an transaction processing issue. Withdrawals were later resumed.

The selloff comes as traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data Friday showed US inflation jumped to a fresh 40-year high in May.

Cryptocurrencies, which have struggled amid the Fed’s policy in recent months, have been hit particularly hard. The collapse of the Terra/Luna ecosystem last month, and lender Celsius pausing withdrawals Monday morning Asia time, have further eroded confidence in the space.

“If you do get long, perhaps think about doing so with either a long call spread or short put spread to limit risk” on Bitcoin futures, said Rick Bensignor, president of Bensignor Investment Strategies and a former strategist at Morgan Stanley. “If this dives, there’s no reliable support nearby.”

Traders speculated that Celsius could face further risks if the broader market selloff deepens. A loan worth more than $278 million, one of the biggest single loans on decentralized lending platform MakerDAO, is labeled as a loan made by Celsius, according to data tracker Block Analitica.

If Bitcoin falls below $22,534.89, the position will be liquidated, adding more sell pressure for Bitcoin, the analytics firm said.

Data shows that the address used 17,919 wrapped Bitcoin, a version of Bitcoin that can be used in decentralized finance, as collateral for a loan worth $278,490,419 in the decentralized stablecoin DAI.

While the blockchain explorer Etherescan didn’t labeled the wallet as Celsius, a wallet from Celsius sent additional 2,000 wrapped Bitcoin to support the position. Celsius did not immediately respond to a request for comment on the wallets.

Ether declined as much as 21% to its lowest level since January 2021. Avalanche dropped as much as 20%, Solana up to 19% and Dogecoin as much as 21%.

Mike Novogratz, the founder and chief executive officer of Galaxy Digital Holdings Ltd., said that cryptocurrencies are closer to a “bottom” than the U.S. equity market. Bitcoin is down around 67%, while Ether has slumped 74%, respectively, since hitting record highs in early November. The S&P 500 is down around 21% this year.

Crypto Billionaire Fortunes Vanish As Quickly As They Were Made

Seven of the world’s richest crypto founders have lost a combined $114 billion since November as digital-asset values crumble.

One built a massive fortune that rivaled the wealthiest US tech titans. Another amassed a war chest that he vowed would change politics and philanthropy. Some were given a second chance at riches after past ventures flamed out.

The cryptocurrency craze turned Changpeng Zhao, Sam Bankman-Fried, Mike Novogratz and a handful of other digital-asset evangelists into billionaires several times over. But just as quickly as they became the new faces of global wealth, they’re now seeing their fortunes vanish at an astonishing rate.

Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

Worth as much as $145 billion on Nov. 9, when Bitcoin reached a record high of almost $69,000, seven billionaires with fortunes tied to crypto have since lost a combined $114 billion, according to the Bloomberg Billionaires Index.

Many others who have bet big on Bitcoin, from Microstrategy Inc. Chief Executive Officer Michael Saylor to El Salvador President Nayib Bukele, are also feeling the pinch as the price of the world’s largest digital token slumped below $23,000 on Monday, the lowest since December 2020.

Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

Once seen as ushering in a new era of decentralized finance, crypto has been rocked by two high-profile implosions in the span of weeks.

Celsius, one of the largest crypto lending platforms, announced Sunday that it was freezing all transactions on its network following speculation it would be unable to meet returns promised on some of its products.

That followed the collapse in May of so-called stablecoin TerraUSD and its sister token, Luna — which is memorialized as a tattoo on the left arm of Novogratz, the founder of Galaxy Digital Holdings Ltd.

While global markets are in turmoil as the Federal Reserve and other central banks plan to aggressively raise interest rates to fight the highest inflation in decades, the speed at which crypto has plunged in recent weeks stands out.

And while there’s little evidence of cracks so far in the broader US labor market, the losses in digital assets have led some crypto billionaires to resort to job cuts.

Zhao, founder of Binance, the world’s largest cryptocurrency exchange, said his firm has “a very healthy war chest” and is expanding hiring.

Still, the 44-year-old has seen his personal fortune, once the world’s 11th-largest, tumble 89% to $10.2 billion since he debuted on the Bloomberg wealth index in January. His firm has also become a focal point for US investigators seeking to rein in the crypto industry.

Bankman-Fried, the 30-year-old CEO of crypto trading platform FTX, is down 66% since his fortune peaked at $26 billion. That could dent his plans to give away his money and spend big in politics.

He poured $16 million into super PACs in April, making him one of the top donors to outside groups, and has said he expects to give more than $100 million during the next presidential election to support Democrats.

Novogratz, 57, whose macro fund at Fortress Investment Group was liquidated in 2015 following two years of losses, has staked his comeback on crypto, recently calling Terra a “big idea that failed.”

His fortune fell on Monday to $2.1 billion, lower than when he debuted on the Bloomberg Billionaires Index in December 2020, when Bitcoin traded around $29,000.

Meanwhile, Cameron and Tyler Winklevoss saw their fortunes sag to $3 billion each, from as high as $5.9 billion apiece. The 40-year-old twin founders of crypto exchange Gemini, which announced this month that it would cut about 10% of its workforce, are currently touring with their rock band, Mars Junction.

Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

Coinbase Global Inc., the largest US crypto exchange, rescinded employment offers as crypto prices kept plunging. Founders Brian Armstrong, 39, and Fred Ehrsam, 34, once worth a combined $18.1 billion, have seen their fortunes shrink to $2.1 billion each as shares of the company have tumbled 79% since their initial public offering.

As for Saylor, 57, he’s keeping the faith: He tweeted “In Bitcoin We Trust” on Monday, along with a new picture of himself surrounded by lightning. Microstrategy, the software company he founded that plunged in value during the dot-com bubble in 2000, began buying Bitcoin in 2020.

Its shares closed at a peak of $1,272 in February 2021, when the 2.36 million shares Saylor currently owns would have been worth $3 billion. They’ve since plummeted about 88%.

Bukele, El Salvador’s 40-year-old president, hadn’t tweeted about Monday’s plunge in crypto as of 4:45 p.m. in New York. About a week ago was the one-year anniversary of his push to make Bitcoin legal tender. At the time, it traded at about $36,000.

Updated: 6-13-2022

S&P 500 Tumbles Into Bear Market For First Time Since March 2020

* Equities Benchmark Closes Down 22% From January Record High
* Prospect Of Bolder Fed Hikes Raise Concerns On Growth Outlook

Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

The S&P 500 Index sank into a bear market on Monday with investors fearing that the Federal Reserve will need to hike interest rates more aggressively to fight inflation, even at the risk of sending the US economy into recession.

The broad equities benchmark closed down 3.9%, with all 11 major industry groups declining more than 2%.

The index has now fallen 22% from its Jan. 3 peak, meeting the technical definition of a bear market for the first time since the onset of the pandemic in March 2020.

Big technology companies Apple Inc., Microsoft Corp. and Amazon.com Inc. were the biggest drags on the S&P 500 for the session. Breadth was particularly weak, with just five of the index’s 504 stocks gaining.

At one point in the day, every S&P 500 stock was in the red at the same time. The tech-heavy Nasdaq 100 Index ended lower by 4.7%, while the Russell 2000 index plunged 4.8%.

Investors are bracing for the Fed’s interest rate decision on Wednesday, with most economists expecting policy makers to lift borrowing costs by 50 basis points.

Some firms including Barclays Plc and Jefferies are projecting a 75-basis-point increase amid a pickup in inflation, with others saying a full-percentage hike cannot be ruled out.

While Fed Chair Jerome Powell “has been clear in his desire to guide expectations rather than surprise expectations, this may be the meeting where we get a bit of a jolt,” said Art Hogan, chief strategist at National Securities.

A 75 or 100 basis-point hike “would send a strong message that this Fed is willing to do what needs to be done to get inflation moving in the right direction.”

US inflation unexpectedly accelerated to the highest in 40 years last month, while consumer sentiment plunged in early June.

Economic indicators that arrive later this week will also be key to assessing the state of the economy, since any sharp drops in growth could spur stagflation concerns and further weigh on stocks, according to Tom Essaye, founder of the “Sevens Report” newsletter.

The Empire Manufacturing survey is set to be released Wednesday, while the Philadelphia Fed Business Outlook comes out on Thursday.

The MSCI All Country World Index also closed in bear market, falling 21% from its November closing high. As companies grapple with persistently high inflation, upward earnings revisions momentum in the index, which includes stocks in both developed and emerging markets, has declined to 6.7% from its July peak of 48.6%.

According to Goldman Sachs Group Inc. and Morgan Stanley strategists, the risks to economic activity are yet to be fully priced in by equity markets.

“If Wall Street begins to price in much more aggressive Fed tightening, technical selling could drag the S&P 500 towards the 3,500 level,” said Ed Moya, a senior market analyst at Oanda.

Updated: 1-9-2023

Crypto Beats Stocks, Gold On Best Bitcoin Streak In Nearly A Year

A cryptocurrency sector battered by turmoil last year is showing some signs of life early in 2023, posting bigger gains than other asset classes like stocks, bonds and gold.

The MVIS CryptoCompare Digital Assets 100 Index of top tokens is up some 7% so far this month, exceeding advances of about 2% in global stocks, 1% in bonds and 3% from gold, according to data compiled by Bloomberg.

Global markets are taking heart from the possibility that central banks are closer to calling time on rapid interest-rate hikes as inflation eases from very high levels.

Some of that tentative relief has spilled over into crypto, even as the threat of further bankruptcies hangs over the industry after FTX’s collapse.

“There’s a faint heartbeat — the patient’s not dead,” said Tony Sycamore, a market analyst at IG Australia, referring to six straight days of increases in the Bitcoin price, the best streak since February 2022.

“Selling momentum looks exhausted and there’s a better macro environment” but the token needs to scale key technical levels like the 200-day moving average to trigger greater investor interest, Sycamore added.

Some of the sharpest crypto gains lie outside of the largest token Bitcoin. Second-ranked Ether is up 10% so far this month. Solana, a token that shed almost all its value last year because of a link to FTX’s fallen founder Sam Bankman-Fried, has added over 60% in the early days of January.

An upgrade of the Ethereum blockchain, crypto’s major commercial highway, is also engendering optimism. The upgrade, called Shanghai, may materialize in March. It will allow investors to withdraw Ether they locked up to help operate the network. The latter process is known as staking and earns rewards.

Staking Tokens

Some crypto protocols seek to provide easier and more flexible access to staking rewards, and coins linked to them have surged. Examples of such so-called liquid staking tokens include StakeWise’s SWISE, Lido DAO and Rocket Pool’s RPL, which are up 113%, 107% and 21% respectively in January, according to data from CoinGecko.

Bitcoin rose as much as 1.9% on Monday and was trading at $17,260 as of 10:56 a.m. in London, a three-week high. Solana added about 20% and Cardano 12%.

Coinbase Global Inc. and Riot Platforms Inc. led cryptocurrency-exposed stocks higher in US premarket trading amid the digital-asset bounce.

Bitcoin and the gauge of top 100 digital assets sank over 60% in 2022, hurt by sharply tightening monetary policy and a series of blowups culminating in the unraveling of the FTX exchange, which owes billions of dollars to customers.

Trading volumes crashed and volatility ebbed as investors fled, highlighting lingering worries about the risk of further bankruptcies in the contagion from the alleged fraud at FTX.

Updated: 1-11-2023

Bitcoin Extends Its Longest Winning Streak Since Pandemic Days

Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

* Bitcoin, Ether And Other Riskier Assets Have Rallied Recently
* Optimism About Cooling Inflation, Slower Fed Hikes Aiding Mood

A prolonged rally in Bitcoin is giving crypto enthusiasts a smidgen of something to be happy about during a dark period for the industry.

The world’s largest token has advanced for nine straight days, the longest such streak since 2020, according to data compiled by Bloomberg. Bitcoin has added almost 10% this month and second-largest token Ether about 17%. They both fell more than 60% last year.

Bitcoin was up 3.6% to about $18,194 as of 6:53 a.m. in New York. Ether and Avalanche both gained about 4%.

Bets that inflation is cooling and that the Federal Reserve will slow the pace of interest-rate hikes have helped all manner of assets at the start of 2023. For Bitcoin, the recent gains are a stark contrast to last year’s slump of 64% amid a series of crypto blowups, including the fall of the FTX exchange.

Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

“Risk assets have been rallying, I think, for the reason that the terminal rate is coming slowly but surely into the foreground and positioning has been bearish and transitioning, which means bullish near-term price action,” said Michael Purves, founder of Tallbacken Capital Advisors.

Institutions may make a comeback once the issues overhanging the digital-asset market clear up, according to Noelle Acheson, author of the “Crypto Is Macro Now” newsletter.

“There is little doubt that large players will come back into the market when the outlook is less murky, pushing up transactions and also price,” she wrote in a note this week.

Updated: 1-12-2023

Bitcoin Surges Above $18K To Cap 8-Day Winning Streak

The last time Bitcoin saw such a long streak of green candles was July 2021, during the height of the pandemic.

Bitcoin has clocked eight straight days of increasing prices and has surged back above $18,000 for the first time since mid-December.

The cryptocurrency hadn’t recorded such a prolonged winning streak since July 2021, at the height of the COVID-19 pandemic.

Over the last seven days, the price of BTC has increased nearly 8%, with a 4.1% surge in the last 24 hours at the time of writing.

Cointelegraph analysts predicted on Jan. 11 that Bitcoin could rally to $18,000 and that its upward price movement put pressure on $275 million worth of weekly options expiring Jan. 13 with bets placed at $16,500 and lower.

Hedge fund Moskovski Capital’s CEO, Lex Moskovski, tweeted an image on Jan. 11 showing $86 million worth of Bitcoin shorts were “getting smoked royally.”

Shorts are getting smoked royally.

$86M in the last 4h. pic.twitter.com/hNPwn4C53M

— Lex Moskovski (@mskvsk) January 11, 2023

BTC’s price fell nearly 65% over 2022. The wider crypto market also faced headwinds resulting from numerous bankruptcies and collapses in the space in the same year including crypto exchange FTX, the second-largest exchange at the time of its bankruptcy.

It seems that #Bitcoin likes to remind us that it doesn’t give a shit about exchanges, investor letters, open letters, and ponzi schemes: pic.twitter.com/OfmmdWeUvz

— Andrew (@AP_Abacus) January 12, 2023

On Jan. 11, FTX said it had recovered $5 billion in cash and cryptocurrencies which it may sell in order to repay its creditors, a move that some say could form a bullish narrative if FTX customers are repaid.

yup my sense is that is and always has been the best recovery scenario for customers. I think that them being made substantially whole is a real possibility; I think we were possibly a few weeks away from getting there in November. (US is solvent, should make everyone whole.)

— SBF (@SBF_FTX) January 12, 2023

The exchange also found a number of cryptocurrencies it says will be harder to sell as the markets for those assets are illiquid.

However, some have urged caution on the price, saying a BTC price rally is typical before the release of United States Consumer Price Index (CPI) data.

Never fails. This is third pre-cpi ramps.

— Bill Noble (@crypto_noble) January 12, 2023

CPI data is due on Jan. 12 and many seemingly expect it to show that inflation is dwindling and the Federal Reserve may pump the brakes on hiking interest rates.

The sentiment has also seen the price of stocks rally, with the S&P 500 up 4% over the past five days, according to Google Finance.

U.S. Treasury yields have also seen a slight fall recently, according to Bloomberg data.

Updated: 1-15-2023

FOMO Stirs Again In Bitcoin’s Best Start Since Before Pandemic

Crypto Market Is Closer To A Bottom Than Stocks (#GotBitcoin)

* The World’s Largest Token Has Risen Over 28% So Far In January
* Bets That Rate Hikes Will Soon End Are Aiding Market Sentiment

Bitcoin has bolted out of January’s starting gates with a climb of more than 26%, turning up the heat on bears who anticipated more challenges for riskier investments after sharp selloffs in 2022.

The token’s advance so far is the best for the opening month of a year since a 31% rally in 2020 before the pandemic hit. The surge has helped to lift the overall value of digital assets past $1 trillion, a level that gave way in November when the FTX exchange imploded, CoinGecko data shows.

The largest cryptocurrency rose as much as 2.5% on Monday and was trading at $20,860 as of 12:18 p.m. in London, down slightly for the session along with tokens like Ether, Avalanche and Algorand.

The crypto climb is partly a bet on an end to punishing interest-rate hikes, a prospect that’s also boosted the likes of stocks, bonds and gold.

Even so, investors are wondering if all these assets have moved too far, too fast given that central banks like the Federal Reserve are pledging to keep policy rates elevated until still-high inflation is vanquished.

While plenty of uncertainty hangs over digital assets, including whether a short squeeze is driving up prices and will peter out, “FOMO is likely to play a role in how the market evolves from here,” Noelle Acheson wrote in her “Crypto Is Macro Now” newsletter, using the acronym for “fear of missing out.”

A jump in the average size of trades indicates “whales” are driving the rally, researcher Kaiko said on Twitter, referring to large crypto holders. Trade sizes have increased to $1,100 from $700 for the Bitcoin-US dollar pair on the Binance exchange since Jan. 8, Kaiko said.

At the same time, market depth — a measure of how one big trade could impact the price of Bitcoin — lingers near the lowest level since since FTX went bankrupt, according to Kaiko.

The crypto industry continues to brace for further fallout from the bankruptcy of FTX and ensuing fraud charges against co-founder Sam Bankman-Fried. Crypto brokerage Genesis and its parent firm Digital Currency Group are seeking to resolve debt woes, a process that could spark market upheavals.

Meanwhile, some technical indicators suggest Bitcoin’s jump is becoming stretched. The token’s 14-day relative-strength index — a measure of momentum — has scaled 90. That’s far above the 70 level viewed as “overbought” and the highest in about two years.

This year’s Bitcoin surge is among the signs that “there’s still a lot of froth in the marketplace” and that “investors continue to ‘act’ in a much less bearish way than they ‘speak,’” Matt Maley, chief market strategist at Miller Tabak + Co., wrote in note on Sunday.

Both Bitcoin and a gauge of the top 100 digital assets sank more than 60% in 2022, a painful year that raised questions about what kind of future they have.

Updated: 4-6-2023

Stocks Haven’t Looked This Unattractive Since 2007

The allure of shares dimmed when bond yields surged and the corporate-earnings picture continued to darken.

The reward for owning stocks over bonds hasn’t been this slim since before the 2008 financial crisis.

The equity risk premium—the gap between the S&P 500’s earnings yield and that of 10-year Treasurys—sits around 1.59 percentage points, a low not seen since October 2007.

That is well below the average gap of around 3.5 points since 2008. The reduction is a challenge for stocks going forward. Equities need to promise a higher reward than bonds over the long term. Otherwise, the safety of Treasurys would outweigh the risks of stocks losing some, if not all, of investors’ money.

The allure of stocks dimmed recently when bond yields shot higher and the corporate-earnings picture continued to darken. The Federal Reserve now faces the dual challenge of raising interest rates to cool inflation while reaching into its toolbox to prevent a full-blown banking crisis from erupting—both of which cloud the outlook for stocks.

The S&P 500 has clawed back some of last year’s 19% decline, rising 6.5% in 2023. The Bloomberg U.S. Aggregate Bond index has jumped 3.9%, boosted by an early-year rally and higher yields.

Bonds are offering a “once in a generation opportunity, but not once in a lifetime,” said Tony DeSpirito, BlackRock Inc.’s chief investment officer of U.S. fundamental equities.

The current equity risk premium is closer to the longer-term norm: The average premium since 1957 is around 1.62 points, BlackRock research shows. That means stocks should still offer a better return than bonds given their historical outperformance, Mr. DeSpirito added.

The equity risk premium falls when bond yields rise, or a stock’s price/earnings ratio jumps—either due to weaker earnings or higher stock prices. The earnings yield, meanwhile, is the ratio of profits from the past year to current stock prices.

October 2007 would turn out to mark a precarious time in markets. Stocks had recently hit their highest level on record, and the federal-funds rate was near its current level at around 4.8%.

Over the following year, the S&P 500 would go on to drop roughly 45%, and the Fed would cut rates to near zero. Bloated stock valuations reset; bond yields cratered.

By March 2009 when the stock market bottomed, stocks’ premium over Treasurys had risen above 7 points and a new bull market was born.

Stocks look pricey again today, and markets and the economy are facing a new host of challenges. By at least one valuation measure, U.S. stocks are currently more expensive than those of any other country or region, Research Affiliates’ data show.

That is based on the S&P 500’s price level relative to inflation-adjusted corporate earnings over the past 10 years, or the CAPE ratio.

Although well off prior peaks seen in the late 1990s and during the exuberance that followed the onset of Covid-19, the U.S. stock benchmark now trades at a multiple of 28.3, pricier than it has been more than 90% of the time since 1881.

Valuations have historically plummeted during economic recessions, though some analysts say lofty valuations won’t prevent stock prices from continuing to rise.

“We have seen the peak for stock-market valuations, but that doesn’t necessarily mean we’ve seen peak prices yet in this cycle,” said Jawad Mian, founder of macro-advisory firm Stray Reflections.

The economy is much more resilient to high interest rates than it has been in the past, said Mr. Mian. High nominal growth—boosted by inflation—will continue to support earnings more than Wall Street’s consensus currently sees, preventing a significant drop in stock prices, he said.

Analysts expect earnings among companies in the S&P 500 to edge up roughly 1.6% in 2023, according to FactSet. At the end of last year, they were calling for a 5% increase.

Since 1957, equities have beaten out fixed income more than two-thirds of the time when they were held for at least a year, BlackRock research shows. Stocks’ favorability improves as holding periods lengthen.

Focusing on stocks’ slim risk premium misses part of the picture, Mr. DeSpirito of BlackRock says. Fed intervention—suppressing short-term rates and buying up long-term bonds—created an abnormal risk-reward profile for stocks after the 2008 financial crisis.

He encourages investors to seek stocks with resilient margins and strong earnings growth, while avoiding overvalued companies.

Some investors say frothy valuations mean value stocks—those trading at a discount to their book value, or net worth—warrant consideration.

Value stocks are “dirt cheap” relative to growth, now more discounted than they have been four-fifths of the time in U.S. stock-market history, according to Rob Arnott, founder and chairman of Research Affiliates.

Although value stocks trumped their growth-oriented peers during last year’s rout, growth stocks are back in the lead. The Russell 3000 Growth Index has jumped 12% in 2023 while the Russell 3000 Value Index has remained relatively flat.

When inflation has run between 4% to 8% a year, value stocks have outperformed their growth peers by 6 to 8 percentage points annually, Mr. Arnott said. Consumer prices rose 6% in February from the year before, the smallest increase since September 2021.

“Inflation is wonderful for value,” he added.

Bitcoin Information & Resources (#GotBitcoin?)

When World’s Central Banks Get It Wrong, Guess Who Pays The Price😂😹🤣 (#GotBitcoin)

As Crypto Crash Erases Approx. $1 Trillion in Market Value Users Say, “Thanks But No Thanks” To Bailouts

“Better Days Ahead With Crypto Deleveraging Coming To An End” — Joker

Crypto Funds Have Seen Record Investment Inflow In Recent Weeks

Bitcoin’s Epic Run Is Winning More Attention On Wall Street

Ultimate Resource For Crypto Mergers And Acquisitions (M&A) (#GotBitcoin)

Why Wall Street Is Literally Salivating Over Bitcoin

Nasdaq-Listed MicroStrategy And Others Wary Of Looming Dollar Inflation, Turns To Bitcoin And Gold

Bitcoin For Corporations | Michael Saylor | Bitcoin Corporate Strategy

Ultimate Resource On Myanmar’s Involvement With Crypto-Currencies