Crypto Market Summary
- Last week marked the launch of two Bitcoin ETFs in North America
- Bitcoin ETFs seems to have assisted in the Bitcoin price rally last week
- For this week, we expect further upside as investors start to warm up to the two Bitcoin ETFs
- Bitcoin (+0.09%) soared to US$57,000 over the weekend, but has since pulled back to trade around US$56,700 as it continues to consolidate at this level and with outflows from exchanges slowing against inflows (outflows typically suggest that traders are looking to hold Bitcoin in anticipation of higher prices).
- More corporates may be announcing allocation of cash to Bitcoin. We view a top down approach where this corporate treasure to BTC movement is led by large companies before filtering down to the midsized companies
- UNI has taken a strong rally last week even though with the entrant of a new competitor PancakeSwap. This week may see price range bound between $26 to $32 as the recent rally takes a breather
- Ethereum’s ETH2 may begin an acceleration in its development process in a bid to maintain its leadership under threat from Binance Smart Chain. Keep watch on the next phase of ETH2
- Keep watch on U.S. SEC lawsuit against XRP as the price should be news driven
General Market Summary
- U.S. stocks ended last week mostly flat with the S&P 500 (-0.19%), tech-centric Nasdaq Composite (+0.07%) and blue-chip Dow Jones Industrial Average (+0.00%) more or less unchanged but futures activity suggests that markets look set to hit new highs again this week.
- Asian markets were mostly up in the Monday morning session as investors continued to sell off bonds, with yields soaring.
The benchmark U.S. 10-year Treasury yield ended last week at an eye-watering 1.340% and may be set to rise even higher without intervention by the U.S. Federal Reserve as investors dumped “safe” bonds to bet on risk assets (yields rise when bond prices fall).
- The dollar continued its slide in Asian trading.
- Oil was flat on Friday with March 2021 contracts for WTI Crude Oil (Nymex) (-2.12%) at US$59.24 as investors tried to weigh a combination of conflicting factors, including a declining dollar, concerns over an economic recovery as well as inflation.
- Gold was firmer with April 2021 contracts for Gold (Comex) (+0.14%) at US$1,777.40 last week, mainly on the back of a weaker dollar.
The risk trade is in vogue. Almost as if investors have thrown caution to the wind, bond yields have been surging as traders have been dumping the “safe” assets and embracing risk in cyclical sectors of the stock market, even as bubble warnings are flashing.
Betting on a swift economic recovery, investors are increasingly turning to those sectors of the economy where valuations are somewhat reasonable, and whose stocks had otherwise been forgotten thanks to the pandemic.
In Asia, markets were mostly up on a perceptible shift towards economically more exposed sectors with Tokyo’s Nikkei 225 (+0.78%) and Hong Kong’s Hang Seng Index (+0.33%) higher, while Sydney’s ASX 200 (-0.02%) and Seoul’s Kospi Index (-0.08%) were down, but not significantly.
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