Weekly musing: no one cares about Ron now.
As May comes to a close I’m anticipating the continuation of the fall described in the previous newsletter over the next weeks. The big question remains what will happen over the summer. Let’s step back to see if there are enough memes to fuel a bull run.
To begin with, the Nasdaq is looking pumpy, fuelled by tech leaders capitalising on the AI euphoria. Nvidia just broke its November 2021 all-time high, having climbed 25% today after reporting strong sales of their high-end AI GPU chips.
As always, AI isn’t new and the current LLMs may even be less exciting than most people perceive them. But as any crypto investor knows, markets run on hype. And, amid the cooling US inflation, everyone is looking for the next growth story.
Sadly, and also as any crypto trader knows, markets are also all about timing, and like ARK I bet many Nvidia fans are cheering naked, having not been able to remain long due to a lack of conviction or liquidity. What’s the takeaway here?
Well, inflation is finally falling in the US, and Europe should see some respite later this year. The Nasdaq has also just hit a 52-week high. But the S&P 500, BTC and crypto are lagging - not caring about the positive spin on the inflation story.
This means two things. Tech stonks being propped up by the AI boom are just experiencing a dead-cat bounce and all assets will fall once the hype fades, or the rest of the market will catch up once bankers allow interest rates to calm down.
Overall, if bitcoin doesn’t bounce off $25k soon then it’s doomed to test $22k. And then we can only wait until either the AI stock boom entices bulls to how crypto and blockchain can power the AI revolution or until the S&P 500 finally pumps.
I’ll keep a close eye on the performance of BTC and ETH during this monthly close because it’s worrying when an asset fails to perform when the timing seems right. Even if apathy is the normal state of mind in the first year of a market cycle!
Chart art: no one cares about crypto now.
Three things: no one cares about on-ramps until they fail.
Hunter Horsley explains how AI may be a catalyst for crypto in this cycle.
Owocki explains why not every crypto project needs to be decentralised.
Joel John explains why we need better financial on-ramps to scale crypto.