The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm
Honestly at moments in time I was like how tf am I going to keep writing this daily commentary with nothing at all going on, and low and behold you just get some vol out of thin air.
MACRO - OK so, I want to lead with he fact that price action is very boring right now; equities closed about 1% lower yesterday and futures are 0.2-0.4% lower to start this morning on SPX and NDQ respectively. Yes, these moves are lower, but they are by no means "big" moves and they don't even compare to the volatility we've seen and had in the past three years. So in my book, boring price action on stocks, and also boring price action on interest rates in the context of the last 12 months, 2y has barely moved and while 10y has continued to head towards multi-decade highs, the magnitude of these moves are minuscule compared to last year. So when people are telling me "macro feels like shit", I think they are clutching at straws for some action in a quiet August period. The big headline is of course Evergrande filing for bankruptcy that everyone has been mentioning to me as it's some sort of revelation or surprise. It's not. Evergrande defaulted on its debt in 2021 when chinese property blew up (which btw had very little impact on the broader market) and has been a stressed company ever since. Filing for bankruptcy is often an "after the fact" action, especially for something that has already been stressed for 2 years. So, with all this in mind, I think we are just seeing some fatigue in the market and a natural pullback after hitting ATHs and people are trying to point to things to explain the moves..which btw...once again are NOT big moves. I repeat, these are tiny fucking moves in the context of not only the last three years but the last twelve months.
CRYPTO - So, we saw ETH wick down to 1550 and BTC sub 25k yesterday, with crypto already having traded very weak for the past few days. I am seeing a lot of people attribute this to Evergrande or "macro", given what I just said above, I DO NOT think this move is macro related, or at least that is not the main or even a significant component. Once again, the macro moves we've seen in the past few days are tiny and are being over-exaggerated in a quiet market. The thing that is probably more relevant is the fact that Elon Musk's SpaceX liquidated $373m worth of bitcoin according to WSJ. It's unclear to me when that happened and this also might explain who the large seller has been recently, but it feels like one trading desk probably had the colour/axe and front-ran that by shorting (which is when we started to descend) and then when they made the actual sale covered their position and we are where we are now. IF this is the true reason why crypto dropped, I think it's a good buy here, and it does mean the large seller is out. We've retraced all the way now from the ETF headlines and I think things look interesting here (of course I have previously mentioned 1600 was a level for me to start adding ETH again, unfortunately it was all too fast for me to move a significant amount of spot). BUT, I would recommend DCA and just owning spot - there are countless times where we see a big drop in crypto then we bounce and then we get an even bigger drop and you don't wanna get liquidated. I'll be on the hunt for any other information on why we dropped so hard.
NFTs - 19m in volumes as a lot of the focus continues to be on DeGods with Machi having accumulated up to 400 and some existing DeGods whales bidding him for them. Elsewhere price action seems to be overall lower but not really a big move either way given crypto vol; tbh I'm surprised there have been such high volumes and I would expect things to freeze a bit.
REPORTS - Today we look at Coinbase who have released their very own Ethereum sidechain BASE. Many people have bridged their ETH to thr platform, the main reason being the dAPP ‘Onchain Summer’. This dAPP is a multi-week celebration of onchain art, gaming, music, and more, powered by Base. It allows users to visit every day for onchain drops that will, as the team put it, brighten your summer. It kicked off on August 9th and so far has had some very successful drops, including a DeekayMotion open edition which ammased 71.5k mints and $1.4M+. Find out more about the sidechain and dAPP in our report releasing tonight.
GL!