Cryptocurrency analyst, Saxo Bank
Summary: This week the entire crypto market cap rose by 12% to around $135 billion. Bitcoin and Ethereum advanced by 10% and 20% respectively.
This was the second week in a row that the market saw an overall increase in value, a development some observers say is due to increased institutional interest.
JPM Coin
This week J.P. Morgan Chase announced its own digital coin. The digital asset which is based on blockchain tech would be used to settle transfers between institutional accounts at JP Morgan. The coin will be backed by deposits at the bank on a 1:1 basis with the US dollar. However, it should be noted that JPM coin is not a cryptocurrency, but a digital asset running on JP Morgan’s private network, which is currently inaccessible to consumers. JPM coin will work to familiarise institutions and regulators with how to handle distributed ledger technologies. This project is certainly a threat to XRP, Ripple and SWIFT. Other banks may follow suit and begin issuing their own coins which could serve as a Trojan horse for cryptocurrencies. However this is not the first time a major bank has experimented with a settlement coin.
Grayscale Investments reports
Grayscale Investment released its annual report for its investment products this past week. Grayscale investment is known for its GBTC trust which holds BTC and trades over the counter in the US. The firm also has investment products including, Ethereum, Bitcoin Cashand Litecoin. Shockingly, over 66% of its $360 million of inflows originated from institutional investors. While another 20% came from retirement accounts and family offices. Many are waiting for institutions to enter the crypto industry, but this annual report highlights the fact that institutions are already here.
Bitmain back again
Cryptocurrency mining giant Bitmain Technologies recently updated its IPO filings on the Hong Kong stock exchange. The update revealed that the company experienced a loss of half a billion USD in the third quarter. However, the company still has a profit of roughly $500m for the first nine months of 2018. The updated filing is not yet public, and an anonymous representative of the company denied the reports. Additionally, to distract from the rumours Bitmain announced a new Bitcoin mining chip that is almost 30% more efficient that the previous design. Hopefully, Bitmain will finally launch its IPO this year, giving investors one the largest pure plays with exposure to the cryptocurrency market.
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
