EQUOS — Morning Update — October 19th

While the S&P 500 closed little-changed on Friday, futures are looking stronger this morning in Asia. You probably already guessed it, we have news on the stimulus package front: Nancy Pelosy is setting a Tuesday deadline for a deal (pre-election).

With a longer-term perspective, it’s important to note that central bankers are under no illusion that coronavirus issues are over. In many countries, there are warnings of potential new lockdowns, restrictions, struggling recoveries, and unemployment.

At the moment, however, S&P e-minis are at $3,476, the 10-year treasury yield is up from last week at 0.76%, and gold is hovering just below $1,900 after getting sold off on Friday.

In the crypto space, as if it was leading other markets, the enthusiasm was felt over the weekend. BTC is up around 1.3% from Friday’s close, currently at $11,465. ETH is up 3.3% during the same time frame, currently at $377.

With the two larger market cap coins up, the rest unsurprisingly followed. DOT rose 5.1%. LINK and ADA both went up 3% over the weekend. LTC is up just 1%. XMR, which had fallen about 6–7%, is now up 3.5%. BCH followed a similar dynamic, but is only up 1.7%. It was interesting to observe XLM’s moves, rising 10% on Friday and then extending gains slightly over the weekend, currently at 0.08.

Overall, it’s nice to see the crypto space rising — or holding up well — despite negative news, both in the traditional assets space and in the crypto space itself. With the increase in virus cases, the endless stimulus bill discussions, and some main stocks sellage, one would expect BTC to drop. Add onto that the OKEx investigation on Friday (following the BitMEX debacle two weeks ago), and the expectation would have been even more convincing — yet we’re up.

In the long run, this resilience against difficult news and the relative outperformance in comparison to traditional assets is (I find) extremely bullish. Coupled with the growing number of companies and funds that are not crypto-natives, yet are allocating a portion of their balance sheets to BTC — plus the Grayscale fund’s growth — and you’re set for an explosive move up.

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Justin d’Anethan

Passionate about financial markets, long-term investments, the occasional short-term trade and disruptive technologies.