Market Update: Mon 20th Nov
Crypto rebounds
The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
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**MACRO** - A quiet day for equities on Friday which ended unchanged, as futures show no real movement this morning either. Interest rates have slowly started to climb higher again but with 2Y at 4.9% and 10Y at 4.47% we are meaningfully off recent highs as market expectations start to think ahead to next year. TBH I think we are going to be set for a very quiet week here as there is not much to look forward to plus we also have Thanksgiving which means activity will be low with a lot of the market out towards the end of the week. We do get the Fed minutes on Tuesday and I think the market will be looking for any signs that the Fed is considering cuts and what timing, but tbh I don't expect any major surprises.
**CRYPTO** - Some morning strength to start the week sees BTC back above 37K and ETH back above 2K. The ETH/BTC ratio is is back up to 0.054 having hovered lower for a few days with some decent-sized whale selling. I guess the thing about ETH here is that if we do truly have a confirmed cycle we know SOL will likely outperform if last cycle was anything to go by, but I do think we will see some people switch from BTC to ETH given how that relationship has performed this year. I also think spot ETH ETFs are not yet priced in so it does have something else going for it in 2024, not to mention that it will likely become deflationary once ETH activity picks up which you'd expect it to in a bull market. I'm not really sure what to think about crypto as a whole until the end of the year but IMO when ETH/BTC are stable you start to see other narratives come into play whether it's alt L1s, L2s, memecoins etc...people are always chasing returns and I think the key is to stay on alert for the next meta. It sounds like there's a lot going on in the Solana ecosystem rn in terms of memecoins, defi and farming potential airdrops.
**NFTs** - Prices seem to have drifted a touch lower while volumes are relatively quiet. Today we get the second $BLUR airdrop and so all the focus is going to be there. I ran a poll last week asking what people would spend their airdrop on and it sounds like around 35% expect to actually spend it on NFTs, so maybe we do get a little boost. I'm sure Blur will probably announce something else alongside its airdrop as they've been very quiet for ages and the most recent announcement suggests there is more. The question is whether it'll be a mechanic that's meaningful at driving value or not. I know the majority of Blur farmers will be net down on their trade but most stopped farming months ago so the injection of this airdrop I think will have a positive effect on the market, if modest.
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GL This Week!