The Trader Top 9: How The Markets Are Reacting To Stimulus
Let’s see what traders and investors make of the madness in this week’s Trader Top 9.
9. Bitcoin moved in lockstep with equities last week, causing some to claim the death of the safe haven narrative.
8. On the other hand, even other safe havens performed poorly.
What’s more, a number of on chain analytics firms provided evidence that the specific coins moved tended to be those held by newer buyers - reinforcing the notion that the sellers weren’t long term bitcoin HODLers but newer market entrants
7.The age of the moved bitcoins wasn’t the only deep analysis on recent market action. The team at Multicoin Capital did a deep dive analysis of how crypto market structure broke in the crash.
6. Still, in truth the bigger action this week was in the absolute piling on of governments racing to ease cascading economic crash. Even before all the details were worked out, President Trump made clear they wanted to “go big” with the stimulus.
5. As people started to debate the specifics of the Stimulus package, it became very clear very fast that if 2008 was all about anger towards the “too big to fails,” 2020 was going to be about anger at the corporate buyback regimes.
4. For others, however, there was a much bigger picture that we were missing that had to do with bond and currency markets.
3. Some honed in specifically on the relative strength of the dollar.
Which was reinforced by numbers like the Australian Dollar losing 20% of its value compared to USD.
2. Yet interestingly, something else started to happen this week. Lending credence to the idea that the first wave sell-off was primarily institutions looking for liquidity, bitcoin stopped falling even as other markets continued to crater throughout the week.
1. Indeed, as we speak, a new bitcoin narrative is emerging. The first part of that story has to do with the new behavior of the asset.
But the second part is about what many feel bitcoin was truly designed for.
If the last few weeks have shown us anything, however, it’s that what comes next is impossible to know.
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