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Macro and Market Anatomy
Aurelie Barthere
Key Takeaways
6 min read
  • Crypto and Tech equities (still at ~0.5 yearly correlation) seem to have diverged from other cyclical assets, which are preempting a growth slowdown.
  • In this issue we diagnose the respective states of the US consumer and financing conditions, and scan Tech valuations (as a proxy for crypto valuations).
  • We find that prices could diverge from “fundamentals” further, but that a combination of high for longer US real rates, and slowing growth are ultimately negative for Tech and crypto.

Fundamentals and valuations

Last week, we reviewed pure quantitative crypto indicators. This week, we are diving into the macro and cross-asset markets to assess the state of growth, financing conditions as well as investors’ expectations.

We find that Tech equities, and to a lesser extent crypto assets have been less reactive to fundamental changes. Namely, in the last two weeks, bond futures have priced a further Fed rate hike this June and pushed back the estimate for future policy rate cuts. At the same time, Bitcoin has tested the 26,000 level but not broken below. Meanwhile, US tech, Taiwanese, and Korean equities (biased towards semiconductor and other electronic products) have outperformed other markets.

_So why...