Cryptocurrency analyst, Saxo Bank
This week the entire crypto market cap rose 17% to just under $300bn. Similarly, Bitcoin rose by 15% with most of the gains happening on one single day. Ethereum underperformed its larger competitor by rising 13% over the week. The market saw a majority of its returns during a three-hour window on July 17. Although there were no major announcements during that time to cause markets to react so aggressively there has been a recent string of positive news.
Blackrock forms Blockchain taskforce
Earlier this week news broke that Blackrock has formed a working group to evaluate blockchain and cryptocurrencies. The asset management firm has over $6.3tn assets under management. The market reacted positively after the announcements. However, this is not the first time executives at the company mention blockchain. Larry Fink said last year that he was a “big believer” in the potential of cryptocurrencies. It is should only be a matter of time before they announce their first investments in the sector.
IBM partners with insured stable coin project
A stable cryptocurrency is said to be the holy grail of crypto, and this week IBM announced a partnership with a company do just that. The start-up Stronghold is building a USD-backed token on the Stellar blockchain, that is backed 1:1 with an insured USD stored in a chartered trust. This is one of the many attempts to create a stable coin, but this is the first time a large company such as IBM is backing a project. USD-backed stable coins have been wrapped in controversy with many accusing companies of running fractional reserves while advertising full reserves. Bitmex Research released a great post detailing stable coins in all their forms.
Crypto investment funds continue to raise money
Grayscale investments, run by Barry Silbert, raised $250m in the first six months of this year. This is the largest amount raised in a similar period for a company with $2bn AUM. The company offers several products with exposure to various cryptocurrencies. Additionally, the company stated in its report that 56% of the interest was from institutional investors. These numbers could be the canary in the coalmine, alerting the market to the increase wave of institutional investors flocking to the space.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist
