Macro Markets: A Weekly Analysis of Financial Events on Crypto Trading
The latest episode of Macro Markets, hosted by crypto analyst Marcel Pechman, delves into the reasons behind the crypto market capitalization being down by 60% from its all-time high while the S&P 500 is only 15% away from its peak. Pechman identifies the challenge of cryptocurrencies not fitting into traditional financial categories such as commodities or foreign exchange. Additionally, not every mutual fund has the capacity to accommodate crypto as an asset.
In terms of Bitcoin (BTC) and Ether (ETH), Pechman suggests viewing them as alternative risk assets rather than searching for explanations for their inability to break new highs. The lesson learned is that they should be traded as such, in order to avoid confusion.
Moving on to the next topic, Pechman argues that Nvidia’s $2.3 billion shortseller losses may not provide an accurate picture. A short seller can endure pain if they do not close their borrowing, as long as they have enough collateral deposits. This is comparable to someone who paid a much higher price for crypto and is waiting to sell, as the losses are not yet concrete.
Finally, the show discusses China’s 5% growth, which has disappointed investors and has the potential to negatively impact the market. Pechman emphasizes China’s reluctance to issue new stimulus packages, describing it as a strategy to weaken global economies. As a key player in global commodities, China’s weakening trade balance may result in less tax revenue for other governments. Germany has already entered into a technical recession, with the U.S. following closely behind.
According to Pechman, this could initially have a negative impact on crypto, as liquidity is drained from the markets, and investors may reach for short-term government bonds and cash. However, if the U.S. dollar loses strength, this could be positive for crypto in the medium term.
For those interested in exclusive and valuable content by leading crypto analysts and experts, subscribe to the Cointelegraph Markets & Research YouTube channel, and join us for Macro Markets every Friday.
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
View J-S Tremblay website
