If you’re trading traditional assets, you’ll notice a slight pull back, maybe just a pause, from the incessant bull run we’ve been on. The fundamentals that pushed us higher haven’t changed but key inflation data due to come tomorrow has investors taking some profit off the table.
In the crypto space, you can observe a slight pause as well but it seems unfair to qualify it that way, we’ve been hitting so many new all-time highs in the past day or two. Just yesterday, BTC reached $68,520.
In the alts realm, ETH also reached records, going above $4,800. As I said yesterday, being so close to the 5K mark it almost feel inevitable we will -at some point- reach it.
This type of market is also the opportunity to think about cyclicality. I don’t mean seasonality but cyclicality, the idea that capital flows from one trade to the other. In the crypto space, you see that with BTC leading, ETH following, major cap coins going afterwards, and then more speculative projects getting pumped.
For the past few days, I’ve been talking about ADA, you could see it just sitting still while the rest of the crypto space moved and, inevitably, it started moving and outperforming yesterday as investors search and find new trades with more upside potential.
So, you have to see it as: capital goes in a trade that pays off then… what? Ok what’s the next thing that could move and generate a return? Well obviously ETH. Ok and when that’s done, what’s the other quality coins, etc.
Right now the coin I’m interested in is AAVE, still constrained relative to BTC, still hasn’t pumped in USD either. Naturally, I don't trade, I’m just a multi-year holder of all risk assets, but I’m observing a similar pattern.
Now that I’m done with my ranting. The news that probably made the biggest headlines was Tim Cook, the CEO of Apple, saying that he is personally invested in crypto -but affirming that the company wasn’t involved in anything related at this point.
We also heard from Robinhood, saying that there’s more than 1.6 million people on the crypto wallet waitlist, up from one million just a few weeks ago.
While that’s happening, we’re also hearing from brands like AMC entertainment or Landry looking at cryptocurrencies for payment options or loyalty programs. Adoption is not stopping.
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