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 is the big inflation figure - consensus is at 6.5% and we will know at 8.30am EST. Equity futures are unchanged but to help guide you JPMorgan came out yesterday with some predictions for the reaction if we come higher or lower on inflation:
<6.4%, 20% probability, stocks +3-3.5%
6.4-6.6%, 65% probability, stocks +1.5-2%
>6.5%, 15% probability, stocks -2.5-3%
After Friday’s employment data showed slowing wage inflation stocks have been on a 4-day winning streak so we know at least some part of this has already been priced-in. One rule of trading though is to never underestimate a bear-market rally. The 10y bond is now trading at 3.52% which is about 30bps tighter this year and we continue to see weakness in USD but otherwise macro is in wait-and-see territory for today.
CRYPTO - we retraced initially to 1320 on ETH - not quite the 1300 I had predicted - before charging higher as the day went on with ETH now at 1400 (+5%) and BTC at 18200 (+4%). Been mentioning since Friday that I felt we could go to 1700-1800 in the next few weeks - that definitely looks in range now although it will get increasingly volatile. Interestingly it was ETH and BTC leading the charge yesterday with most alt coins only up marginally - MATIC was a notable exception with it back at 0.9 (+5%), the Layer2 trend is only going to pick-up pace in 2023. APE hit a high of 5.2 just before the Yuga announcement but then dumped 10% to 4.6. It ran up about 60% in the last 3 weeks (was trading at 3.25 just after staking began) so I would be wary. The announcement did indicate some utility for APE during the gamified Yuga mint (players can pay 2 APE for a booster), the game could have thousands of players daily over the next month but its still difficult to work out how much demand that will actually generate for APE. Headlines yesterday that the FTX administrator has recovered “at least $5bn of liquid assets” which is potentially a big victory for everyone who got burnt there. The process of getting those assets back to depositors will be long and arduous (and could involve liquidating $5bn of crypto!) but its a light at the end of the tunnel.
NFTs - unfortunately for NFTs we are now in a period of high ETH volatility so most floors and volumes have continued to dip. Yuga assets fell after the announcement with BAKC notably now back to 9ETH (-20%) but BAYC/MAYC moves were less severe. The announcement was that BAYC + MAYC holders would be able to claim a Sewer Pass on Jan 17th (anyone else will be able to buy one). Yuga has created a mini-game involving collecting items over the course of the next 3 weeks (can play as many times as your like) which will place you on a a leaderboard going into the mint. What do I make of this announcement? The Trail of Jimmy the Monkey has always felt like a “side-quest” to me, its shaping up to be fun story ending with a mint but clearly secondary to bigger reasons for owning an Ape like digital flex, community, IRL clubhouse/events, merch, Otherside, etc. The game will certainly appeal to some members of the community (we saw that with their mini-game last year) but can’t imagine everyone will have the time to play it properly. Maybe that’s how mints will trend going forward - you have to put in the effort to get the highest reward - and its certainly a different way of approaching loyalty/fandom to passive ways like staking. Still a little confused what the final mint is going to be - MD vs MM has not been solved! Elsewhere Mutant Hounds finally revealed and we saw the floor actually rise to 2.1. Azuki floor keeps edging higher to 17 and Doodles came alive with the floor back to 8. The Grant Yun drop for Meme Cards meant they were active and the floor card is now nearly 0.4.
GL today!