EQUOS — Morning Update — October 16th
While we might be numb to it by now, the coronavirus is still spreading, and, in some parts of the world, increasing. While this is happening, economic tensions endure — for example, the Sino-American trade war. China will soon implement new legislation on export control (both local and foreign-invested), which could be used in further negotiation. With the American election less than three weeks away, the economic and political landscape could change dramatically over this fourth quarter.
Yesterday, equities rebounded slightly, with investors buying some of the bank stocks that had fallen earlier this week. The S&P is up 0.87% on the session. Futures in Australia and Japan are down but rising slightly in Hong Kong. Treasuries were steady. Gold rose 0.3%, still just above $1,900. Copper is inches away from retesting its 2-year high, currently at $3.10.
BTC is holding up well. We are up 0.70% on the day, currently at $11,500, after some intraday volatility took us from lows of $11,250 to highs of $11,620. It is worth noting that the skew on BTC options is decidedly negative (1 month skew at -5.2%), showing a clear tilt toward upside volatility. There is so much to be bullish about, and experienced traders seem to know this.
ETH is down 0.44%: not a massive move but a continuation of the last two down days’ behavior. LINK, LTC, and ADA are also timidly down. XTZ, DASH, and DOT are less timidly so, falling around 1.7%. On the other hand, BCH and XMR rose 1% and 1.7%, respectively.
A notable piece of news came out yesterday: Coinlist just minted the largest amount of WBTC (wrapped bitcoins), for a total of 3,697 coins, or around $42 million worth. As that was happening, Coinbase announced that it will be listing WBTC on its exchanges. Coincidence? I think not.
With a longer-term perspective, it was great to read about Raoul Pal’s interview in a Business Insider article. The former Goldman Sachs hedge fund manager estimates that BTC could hit $1 million in five years. “It’s an enormous wall of money — just the pipes aren’t there to allow people to do it yet, and that’s coming. But it’s on everybody’s radar, and there’s a lot of smart people working on it”, he said.
As a last information nugget, did you see the drop in BitMEX’s open interest? It is back down to March’s low… Ouch.
@justindanethan
