Cryptocurrency analyst, Saxo Bank
This week the entire crypto market cap fell by 4.5 %. The Bitcoin price fell by 6.5 % over the same timespan, as the asset trades closer to its 2018 low. Since the beginning of the month, Bitcoin has been trading between $7,500 and $6,500. Opposite of the market, Ethereum is up roughly 3 % this week. Over the last month the Ethereum price has been drawn to the $400 price level. Investors seem to be looking for news indicating which direction the market is headed.
Institutional capital continues to crypto
Two well-known funds in the traditional finance world are looking to invest in the crypto and blockchain space. The official venture capital arm of the Rockefeller family, Venrock, is partnering with Brooklyn-based Coinfund to invest in blockchain start-ups. Soros fund management is rumoured to have allocated a portion of its $26 billion in AUM to cryptocurrencies. In January, founder of the fund George Soros called cryptocurrencies a “typical bubble, which is always based on some sort of misunderstanding.”
Tax-liability blamed for the recent selloff
Early Bitcoin investor and head of research at Fundstrat Global Advisors, Tom Lee, believes the current situation in crypto can be attributed to the capital gains tax on crypto holders for the latest bull run. He believes that the outflow from crypto to dollars is putting massive selling pressure on the crypto market cap. He states that historically “each $1 of outflow [has] $20-$25 impact on crypto market value.” If his conversion is true then the estimate capital gains tax of $25 billion is responsible for a loss of $200-225 billion in the total market cap. He believes the market will find a floor after the US tax day on April 17.
Coinbase in talks to become regulated crypto exchange
Coinbase is hoping the SEC will allow it to become a regulated broker. This could be precedent setting for crypto exchanges in the US. Additionally, if Coinbase becomes a regulated broker, the company could only trade cryptocurrencies that comply with US securities regulations. Also, the company will be allowed to trade other securities on its platform. Coinbase already has more users than US-based broker Charles Schwab. Their desire to become regulated could be the reason Coinbase has not listed any new assets on its exchange. The journey will not be easy as Coinbase has been accused of insider trading.
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
