Crypto Weekly: Energy-intense cryptos in headwind
Senior Quantitative Analyst, Saxo Bank
Summary: Crypto traders are still trying to pick up the pieces after a wild week with large drawdowns in the crypto market. The market turmoil has brought increased focus on "green" vs. energy-heavy cryptos, and crypto funds experienced a net outflow of Bitcoin investments, partly replaced by an inflow in altcoins.
Bad week for mining-intense cryptos
The last week has been dominated by the turmoil initiated by Tesla’s announcement of suspending payments in Bitcoin due to concerns about the use of fossil fuels for Bitcoin mining and transactions. Especially those crypto currencies which apply energy-intense mining schemes for transaction verification such as Bitcoin and Ethereum experienced large losses, whereas some of the “greener”, less energy-demanding cryptos experienced a boost over the past week. The global focus on the energy impact of crypto mining has been raising concerns around the world such as in Iran, where it is now illegal to use household electricity for mining. And in China where Beijing is conducting a survey to map out the crypto-related power consumption; a follow-up on the earlier statement from the Chinese region Inner Mongolia saying that they would shot down all crypto-mining operations to be able to meet energy efficiency targets.
Record Bitcoin outflow from digital asset funds
According to a report from CoinShares concerning the flows into and out of popular digital asset ETPs, mutual funds and OTC trusts, a record-high outflow from bitcoin products of close to USD 100m occurred over the past week. On the other hand, Ethereum and other altcoins reported a positive net inflow, with ETH accounting for approximately ½ of the inflow and Polkadot and Cardano also for a significant amount.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
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The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.