[Market Commentary] Ray Dalio holds Bitcoin; total trading volume of crypto assets at an all-time high
I was attempting to provide commentary covering the entire financial market, but focusing on crypto assets with a full-market outlook shoulddifferentiationbe more clearly achieved. I hope to deliver market commentary for traders and the positioning of crypto assets within it through this market commentary. Of course, traders may trade whatever they like, so you should trade hot topics and attractive assets, and if crypto assets are not moving, ignoring them is also an option. Separately, I am considering deeper analyses specialized in crypto assets, so I plan to draft those outlines.
☆ The greatest concern in financial markets is inflation and the Federal Reserve's tapering (reduction of asset purchases)
☆ The crypto industry's major concerns are bubble bursting fears, China's mining regulations (somewhat priced in), and U.S. remittance regulations
On Monday, May 24, the stock market carried a optimistic mood and brightness returned to U.S. markets. The Nasdaq-100 rose 1.71% versus the previous day, the Philadelphia Semiconductor Index up 2.32% strongly. Buying interest gathered in crypto-related stocks such as Tesla and Nvidia, and Alphabet (Google) was on a momentum to hit new highs. By the way, Nvidia's earnings are scheduled for May 26 (Wednesday in the U.S.; Thursday morning Japan time). Germany was closed, but France's CAC40 and the UK's FTSE100 continued to rise by 0.35% and 0.48% respectively. The U.S. 10-year yield barely moved, and gold remained in a high near $1,880.
The currencies were range-bound, and crude oil recovered to around $66 as talks continue for Iran to lift U.S. sanctions. The high on March 8 is $67.98, a target. The region around $66 has previously formed a resistance band after late Oct 2018, in early March, and again this month, suggesting a range of $67–68 as a zone of resistance. Last week, Goldman Sachs analysts projected crude could reach $80 by summer. Other commodities showed that palladium and wheat hit highs on a daily basis and then retraced, forming a downtrend.
In contrast to last week, the crypto market is now brightening. Market sentiment had been at its worst due to China's mining regulations and bubble fears, but there is a sense of relief and support for buying. Bitcoin rose about 10–12% over 24 hours. Other altcoins rebounded 20–30% due to a rebound effect, though the gains are still limited, so downside risk remains to be watched. Elon Musk's tweet about North American Bitcoin miners' energy data and news that Goldman Sachs views Bitcoin as an 'investable asset' suggest that crypto will increasingly be positioned as a financial instrument.
The total market capitalization of crypto assets temporarily fell from about $2 trillion to around $1.5 trillion. However, trading volume hit a record high, reportedly reaching $1.76 trillion. Of particular note is that the trading volume of stablecoins accounts for about half of the total.
Below are highlights of statements and influence from famous people in the media.
- Legendary investor Charles Ellis warned that sudden inflation would hit bonds and equities(5/21)
- JP Morgan strategists on BitcoinIf Bitcoin cannot quickly recover to the $60k range, the trend could be undermined (4/20)
- VIX's surge is an indicator of bullish stock conditions ahead, says Tom Lee, renowned analyst at Fundstrat(5/12)
- Ray Dalio, founder of Bridgewater Associates, mentioned ownership of Bitcoin(5/24)
Today Germany's GDP will be released at 15:00, an economic indicator to watch for the trajectory of upbeat Europe.
【Trading-worthy tickers】
Bitcoin
Ether
Crude oil
Palladium
Wheat
【Notes on Market Commentary】
Please read with consideration of the following points.
① Whether it is transient
② Whether it is sustainable
Trader's mindset
・Reading commentary after events occur is fine and does not affect forecasting ability or trading performance.
・Current market moves cannot be explained in a single snapshot.
・Profit is possible even without clarity on the direction.
・Markets where analysts and strategists say 'it will rise' can still generate profits on rebounds or pullbacks.
Traders who do not know market mechanics can still win. Reports written by me, who thinks differently from those who only provide market commentary and analysis without trading implications, may differ in stance somewhat. However, please accept that even if I write, it will superficially resemble standard market commentary.
