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Morning‌‌ ‌‌Update—Macro and Crypto Markets—May 12th

May 12, 2021
With commodities prices rising—essentially shortages in raw materials and semiconductors—the idea that production might slow down, that inflation might pick up, and that recovery might not be as smooth as we had hoped for, is weighing on investors' minds. The Dow gapped down almost 1.5%, and the S&P and Nasdaq also fell. Yields, on the other hand, are picking up.

In the crypto space, we’re up. BTC is recouping from its previous session’s drop and rose about 1.5%. ETH, on the other hand, is boldly marching on, rising almost 5%, to close at $4,150.

The BTC Dominance index is moving further down, now at 44.30. As if the cycling from BTC to ETH had finally permeated smaller cap coins, we are seeing outperformance from a flurry of pairs like COMP, XTZ, GRT, ADA, AAVE, and DOT, up by 4-10%.

First, I want to draw your attention to two charts from Glassnode, one showing the movements of old coins and another looking at miner’s holdings. 

In the first, we see the long-term dynamic during this bull run and what looks like a new period of accumulation now, while BTC remains in the 50K’s. In the second, we see miners are following a similar trend, in which they are now holding coins rather than realizing profits. Both are supportive of lower selling pressure and therefore of supported levels, if not another leg up.

Away from market data, there are interesting reports coming through.

Palantir is considering adding Bitcoin to its balance sheet—and based on how often those rumors turn out to be true, I suspect this will happen soon. They also mentioned potentially accepting Bitcoin as a form of payment. The continued adoption from the corporate world is just amazing.

It was interesting to see eBay tap into the NFT frenzy by allowing sales on its platform. While it might not be price-affecting for crypto markets, it adds to the adoption trend.

Also positive, Hungary is set to cut taxes currently imposed on cryptocurrency earnings, by as much as 50% from 2022 onward. Should we be moving to Budapest already?

Last information nugget—you know I like to look at on-exchange reserves. Did you see that the ETH balance is now almost at a 2-year low… this is supportive and hints at a strong conviction (or just high staking rate) from ETH holders.

Written by: Justin d'Anethan, Sales Manager

Morning‌‌ ‌‌Update—Macro and Crypto Markets—May 12th

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