top of page

Issue 2: Macro Market Summary

What a sale on all of these alt-coins! $BTC, $SOL and $ADA are all at prices not seen since last week. BTFD


Last week we talked about a broader market, what to expect and how to play things. What was mentioned was brief, but packed a solid game-plan to stay conservative, so ultimately there isn’t too much to update on. Our investing strategy still remains the same.


Then wtf are we going to talk about?


I’d like to talk about overall investor sentiment, and what that could, or couldn’t mean for our precious jpegs 😢

$BTC Daily, with fractals from Summer ‘21 laid over current price action


First, let’s look at how the last 8 months of price action of $BTC has rhymed with the S&P. Bitcoin above, S&P below.

$SPDR S&P Index Fund, tracking the top U.S. stocks, with similar path to $BTC


Both in downtrends, with a relief rally, then further down trend.


Now, let’s take a hizzle at some other numbers that the average degen doesn’t keep an eye on, but the suits do. Notable individuals like Raoul Paul, Jamie Dimon, and that guy who shills gold all the time, give us *signs of where we could be in the market.


Overall market sentiment is extremely low so some of these other indicators are good to look at when analyzing your investing thesis, and ultimately relate back to our NFT’s somehow.


Let’s start with inflation - Not only are we at inflation levels not seen since just after the U.S. left the gold standard(50-ish yrs ago) but numbers from other information and credible sources (twitter threads) suggest these inflation numbers are miniscule compared to the true number. Taking decreased purchasing power into consideration things are grim from that perspective.

Speaking of purchasing power, CPI is another number/data point tossed around by politicians and big brains like Will Clemente. So just below is a look at CPI (Consumer Pricing Index) and Fed Funds Rate compared to each other.

If you have no idea what this means, then we’re in the same boat. What I have digested is that the darker blue line, in proportion to the high inflation, is an increasing price that consumers are paying for goods and services. I.e. costs of living, while the lighter blue line is bank lending rates. Grasping the importance of these two together is very tough - In a nutshell, high inflation = higher consumer goods pricing and the cost of living basically goes up, so people have to work more, and borrow more as well. Luckily loans have been affordable to come by, but as inflation increases, interest rates are being raised which will make loans more expensive and harder to qualify for. Think houses and cars.


Monetary policy is for the government to step in and raise interest rates (like they’ve been doing), before we all get massively in over our heads and leverage our house for more Cardano…


In summary, to slow us down from spending more money than we make and curb this inflation nonsense that the government created in the first place the change the numbers on us as consumers.


A Covid saying that makes sense here:


Thesis:


The relativity of this to Jpegs; new users and current users in the space, are slowly losing the ability to fling $500 on a degen mint because gas prices, milk prices and other essentials are increasing tremendously, pricing people out of the market. A phenomenon called the “reverse wealth effect” is occurring on major purchases as well, as prices of commodities and other goods increase.


Wall Streeters know this information, and will be wary of going super heavy into projects expecting degen buyers at the top. The joke of VC’s leaving Solana might be all too real.


On the bright side, times like this require investing into those higher conviction plays you’re prepared to diamond hand until we get to the other side. That is why the saying is the saying. Whether the next bull market comes this year or next, we all must play to our risk tolerance. You make money in the bull, but you make generational wealth in the bear market.


Since the last time we spoke, $BTC $SOL and the broader markets have seen some volatility.


On Tuesday, Janet Yellen admitted to being “wrong” about her comments in 2021, on the path that inflation would take.

This means that a recovery in our precious crypto might not be right around the corner. NFT’s which have been.


--


54 views

Recent Posts

See All

Comments


bottom of page