The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm
MACRO - Well, today I bring you the final gm update of 2022. It's been a pleasure, I think I've written one almost every weekday this year except for about 2-3 occasions when I was extremely hungover. A turbulent year sees SPX closing down 21% and NDQ down 35%, which makes it the worst year for stock markets since 2008. Furthermore, it was also a horrific year for bond markets given the Fed's aggressive rate hikes. Long-dated bonds had their weakest year since the 18th century (!). Any traditional 60/40 equity/bond portfolio would have had its worst year since the great depression in the 1930s (s/o @afearfuljesuit).
I'm definitely not in the business of calling bottoms, but when you have what is the worst performance in almost a century, it does make you wonder! Despite that, we had a strong rebound in equities yesterday with SPX and NDQ closing +2% and 2.5% respectively. Interest rates are stable with 10Y at 3.85% while oil has been hovering sub $80 for a while. My prediction for next year is you will see the US housing market start to crack and a big(ger) slump in corporate earnings in Q1. If we get that, coupled with weaker labour market data, I think you have to see the Fed start to cave and communicate a change. All in all, my guess is next year ends with small positive returns for equities with the bulk of that return coming in H2 should the Fed start to at least communicate changes, but it'll be another very choppy year.
CRYPTO - BTC at 16.5k and ETH at 1200...pretty boring. IMO crypto outperforms equities next year. I don't think it happens on a 1-for-1 basis but by the end of the year I would imagine that ETH returns greater than NDQ. IMO crypto has displayed some insane resilience this year despite what's happened with Luna, 3AC, Celsius, Voyager, FTX, Genesis etc etc. That shows you that despite some heartbreaking stumbling blocks, you can't really fade the technological aspect of it, the shift in digital trends or the continued mass adoption. We just need a better market environment, and we're much closer to getting that IMO than we were this time last year. In some time, 2022 will have been viewed as the year to accumulate, most of H2 has been about that for me and it's certainly taken a lot of discipline through some challenging times. We could face more of the same next year, but the next challenge at some point will be having the discipline to hold on for the bigger returns.
NFTs - Yesterday was a much quieter day in NFTs than we've seen of late, with Otherdeed taking the top volume spot while moving 10% lower. Mutant Hound Collars I think have had an impressive performance and have now risen to a floor of 1.5ETH. Blur yesterday announced that there would also be a creator royalty for its most recent airdrop for which a snapshot has already been taken:
I think it's smart in terms of rewarding creators (and of course we greatly appreciate it as we had almost 7K ETH in volumes on Blur in the last 2 weeks on which we earned pretty much zero royalties) but it's also smart in terms of maybe cutting the pool a bit for the people who probably would have insta-dumped. I'm still very curious as to what happens next and how they can add utility to the token or incentivise holding, I suppose we'll find out soon. My bet still is a potential V shaped move in NFTs, a dump into Blur rewards ending followed by a sharp rise.
GL today, and Happy New Year!
-OSF