Morning Update: Tue 24th Jan
Equities and BTC continue to lead the way
The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
MACRO - Another rather lovely day for equities yesterday which saw SPX close 1.1% and NDQ 2.2% higher respectively. Futures this morning are pointing smalls lower, down 0.2% and 0.4% on both. Worth noting that interest rates have been climbing back higher the past few sessions which now puts the curve at 422/460/350/367bps on 2/5/10/30y. We're about 1.5 weeks out away from the next payrolls number which we get on Friday 3rd February and I think that will be an important one. I was speaking to a prominent HF manager the other day who told me he thought inflation could go to 0% at some point this year. Some conversations I had with Raoul Pal last year as well were interesting where he thought we could see deflation. A big component of CPI is "shelter" which includes rent and it seems that could come off dramatically this year. I think these expectations are certainly at the more extreme end of the range but who knows, they're certainly non-zero possibilities. I've talked a lot about how the Fed is focused on the labour market more than inflation, but maybe the extremity of inflation coming off could also force them.
CRYPTO - We saw a bit of a pullback yesterday which was a dip that got bought pretty hard. BTC is now at 22.98k, very close to breaking that 23k barrier, while ETH seems to continue to underperform hovering at 1628. It actually seems like most alts are outperforming ETH which I think is maybe expected in any potential bull run but it's curious to see BTC's leading strength; I suppose any real rally will always be led with BTC. By real I mean not a short squeeze. I'm not sure if this is indeed a real rally or not but I think it has a good probability of being so, with the macro picture seeing a more material end game now compared to last year. IMO this feels like the moment where everyone got themselves conveniently beared up last year and are still sitting here bearish while things continue to rally to their disbelief. This is the moment where you see people making excuses such as "it's all manipulated" - well guess what, it probably is! But that should be part of our decision making, accounting for manipulation or things being fixed. I'm a big conspiracy theory believer and I've always been of the opinion that rich people with big bags don't just let things die, they figure a way to pump it back up again, and there are a lot of rich people with big bags in crypto.
NFTs - Well Sewer Passes are off to the races with a whopping 3.7K ETH of volume int he last 24H which sees the price up 48%, to a floor of 2.8ETH on Tier 1 passes. Honestly it just feels like to me this game is going very viral, and I continue to think this is very bullish for $APE. Elsewhere volumes are decently healthy across the board. The Memes by 6529 posted another 228ETH of volume although the floor has dropped by 10%. The rest of the Yuga complex has shed a small amount of value but other htan that it's looking good across the board. We've seen a strong rebound in Pudgy Penguins and Kanpai Pandas continue their surge to new ATHs breaking the 2ETH mark. Kind of interesting to see projects like CloneX and Doodles stuck in the mud at 5ETH and 8ETH respectively. IMO collectors have been very clear about not wanting to be consumers and it's kind of amazing to see projects offering "much less" on paper catching up, simply due to community, vibes and culture.
Table from Degenz Finance.