Cryptos Lazarus like rise continues
This Daily Digest will cover:
- 🪙 Cryptos Lazarus like rise continues
- 🏦 Bank stocks slump amid panic
- 🌏 Global yields plunge
- 💵 US CPI today – does it matter?
Where to start?
The fallout from Silvergate/Signature/SVB/insert name here continues as the markets sense blood and bank stocks get hit around the globe. Yields have been destroyed as markets expect that central banks will not hike as much or even at all in the face of the biggest banking crisis since 2008. This has seen the USD have the wind taken from its sails and stock markets globally suffer sharp (if in some ways surprisingly muted) falls.
The real story over the last 36 hours has all been Crypto and its ability to weather everything and snap back. USDC losing its peg, Silvergate and Signature shutting down and the SVB debacle saw us trading sub 20,000 BTC and 1350 in ETH. The steps taken by the US to shore up all depositors then saw a remarkable rally that has seen BTC trade almost at 25,000 and ETH back above 1700. It appears a combination of short sellers getting ruined, Binance announcing the switch of their recovery fund from Busd to BTC started the move.
The fact is though that there is no small amount of realisation that the current situation the financial industry finds itself in is part of the reason why Crypto was born. Yes, we are reliant on fiat transactions still for now, but Crypto is showing why it is the future of money. If, or when in my view, we break the key 25,200 level in BTC this move will gather momentum and I suspect we will see 28,000/30,000 in quick fashion.
US CPI is up at 12.30 and a few days ago I would have said it was super important. However the game has changed with the potential banking crisis wagging the tail of the FOMC. The likes of Goldmans have come out saying they think the FED will pause this month, whereas a week ago 50 Bps was priced in. I think we need to see a real outlying number to affect the broader markets today. Expectations are 6% and only 6.4 or above will change the market’s new view that the rates are close to their peak. Sub 5.8 yields will crash and stocks could have a real turn around Tuesday rally.
As always, good luck!
