So, it’s like I’ve been telling you guys for a while now. The crypto and digital asset space is a microcosm of what’s happening in the rest of the global economy.
Take this headline for example. …
Many of you will no doubt recall the crypto version of this story that played out recently, in which the token known as Link was trashed by a financial analysis report done by a company called Zeus Capital.
The document was rather quickly outed as a biased report as Zeus mentioned that they were short, and the price of Link kept pumping for the next few weeks.
Well, the big difference here is that Hindenburg’s report does seem to have had a sizable impact on market prices. It’s quite puzzling to see two reports that are so similar in nature and allegations have such a different effect on investors.
True, they are two completely separate projects in totally different industries and markets, but in my mind, this is probably a matter of timing more than anything.
Zeus’s mistake was likely that they published their report right in the middle of a strong upward price surge, which is like standing in front of a zooming train. Hindenburg’s piece, on the other hand, was quite well-timed, being released months after the stock had peaked and shortly after the announcement of Nikola’s partnership with General Motors.
Time in the market is better than timing the market, but many times, timing is everything. Click to tweet
Here today Fed tomorrow
Things have been waffling around for a while, but at least for the time being, it seems like the market’s prevailing trend of dollar weakness has resumed.
Virtually all markets from currencies to commodities, to equities, bonds, and yes, even crypto, are reflecting this right now. This snapshot from Finviz shows the dollar’s slide over the last 12 months.
This is not something the Federal Reserve is likely to discuss in their big interest rate decision tomorrow, nor are they likely to talk much about interest rates for that matter.
According to their last meeting, rates are not projected to rise for at least the next few years. Rather, when investors watch Fed Chair Jerome Powell’s press conference at 2:00 p.m. EST tomorrow, they’ll most likely be looking for further clues as to the new inflation policy.
The Fed kind of kicked the door open at their last meeting by indicating a more aggressive approach to inflation. Of course, now that they have everyone’s attention, follow up will be critical.
Today it was revealed that the billion-dollar hedge fund Microstrategy has made another significant investment in bitcoin.
Whether it’s a wise decision or not, only time will tell, but the market has made its opinion clear. Shares in Microstrategy rose sharply after their initial announcement, just as they’re doing today.