Now that we are seeing falls in the crypto market and that the divergences with the SP500 increase, it is important to understand with a long-term vision where we are. Look at this graph here, at the top we have SP500, at the bottom we have BTC for the last 5 years.
In the previous BullRun, the SP500 had a few months in which its behavior outpaced that of the crypto market, but when it reacted and money began to flow into this area, its growth was exponential, much greater than that of the traditional market.
Something similar may be happening now, less than a year after the new BTC halving, which could draw an interesting crypto second semester.
Look at the decorrelation between the two over the last six months.
Look at it this way, while the SP500 has recovered practically everything it had lost, it is only -7% below its ATH, Bitcoin is still -62% of its ATH. Or in other words, BTC can make x2.5 if it manages to recover its ATH.
This could explain why large banks like Blackrock, Fidelity or Bank of America, despite the regulatory noise from the SEC in the US, are accumulating positions:
As you can see, Bank of América, the secodn biggest Bank in USA, have increased by 50,000 percent it’s position on BTC!!
Maybe they know better than anyboody that the actual battle SEC VS Binance/Coinbase is just one more step into regulation, and that’s something good.
But there are many variables to consider. At macro levels, the inflation data in the US have been better than expected:
Although rates are still expected to rise (the ECB made another hike this week). The FED estimates raising the current rate by half a point more, and what is worse, keeping it high for a couple of years:
And that, the last time it happened was with the great financial crisis of 2008, so we will see the macro impact of a possible economic recession on the crypto market. Undoubtedly, great forces of opposite signs struggle in this market to impose their story.
New AI Law in the European Parliament
Yesterday I was watching the debate prior to the approval of the law. It seemed to me that parliamentarians knew little or nothing on the subject. Nice words and a lot of concern about banning facial recognition in public places, to make it clear that Europe is not China. But let’s not fool ourselves. Cases like Pegasus or the use they want to give to the CDBC is what is scary, not the AI. Fascism advances in Europe, in Italy Meloni is already president, in Spain Vox rides on the back of the PP. The problem is not the technology, but the use that governments want to give it. From the outset, facial recognition will be possible if requested by a judge, as if that were a great guarantee. In the name of the law, the greatest atrocities have been done.
And I end with this phrase from Frank Underwood, the American president who best embodied this values:
Finance is a gun. Politics is knowing when to pull the trigger.
Yours in crypto and AI