Yesterday was a fascinating and eventful day. With concerns about the covid delta variant and a seemingly increasing number of cases (in the US but also globally), fear that restrictions would come back around reared its ugly head. Investors sold equities ‘en masse’. Companies that would be most affected by an at-home economy suffered more than others.

Naturally, those moves are placed in the context of inflation concern and the idea that the economy might slow down and suffer while prices continue to rise.

The Dow fell over 2%. The S&P fell 1.6%. The Nasdaq is down 1.1%. The US dollar gained as more people fled to the safety of cash. Gold fell as well but in a tamer fashion than stocks.

Crypto was not immune to the macro moves and fell as well. BTC is down about 2.8%, from 31,700 to now 30,800. It will be fascinating to see whether the support zone at 30K really does hold up -or if we break down and into the upper 20K’s. 

The move is also a sober reminder that, while BTC has been and remains an uncorrelated asset, in the short run, it can be impacted as well -and probably more and more, as it becomes an asset more large funds include in their overall portfolio.

As one would expect, alts underperformed relative to BTC, falling at best 3-4% like ETH, ADA, XTZ and at worst 7-8% like DOT, MATIC, COMP.

Two charts, one from CryptoQuant and the other from Glassnode can shed light on moves that might occur in the short run and the long run. The first one, hourly, shows a massive inflow of BTC to exchange (which hints at more selling pressure and downside). The second shows longer-term inflows and outflows of exchanges which actually suggests that these levels have been an accumulation level rather than anything else.

It was great to see another chart from The Block that shows the stablecoin supply reaching new highs, at $110 billion. Of course this suggests just a lot of capital ready to be deployed into crypto projects.

Lastly, two quick but interesting reports: 1) Elon Musk will attend a bitcoin conference tomorrow (the 21s) alongside Cathie Wood and Jack Dorsey. 2) Grayscale is set to launch an institutional grade DeFi fund and index.

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