Bitcoin Soars Most Since 2017 As Dollar Drops, Bond Yields Pop

Will Powell or Trump or Xi or Putin or Rouhani be 'Leeroy Johnson'?

 

In an effort not to bury the lead, we note that cryptocurrency's rebirth accelerated dramatically today with Bitcoin spiking above $13,500 intraday (up over $2000 in the last 24 hours - Bitcoin's biggest daily dollar rise since Dec 2017)...

Tracking the 2017 trajectory very well...

In the 8 days since Facebook unveiled Libra, Bitcoin is up almost 50%

Helped by the extreme dovishness of The ECB, The Fed, and various Fed-Speakers since. However, perhaps it is as simple as this chart...

Bitcoin is protection from the idiocy of policymakers... rather like gold...

Gold’s climb to a six-year high may reflect its status as “a positive yielding asset” relative to much of the world’s debt, according to Peter Boockvar, chief investment officer at Bleakley Advisory Group LLC.

As Tom Luongo noted earlier, this run up towards the end of this month into the end of Q2 may be morphing quickly into a FOMO rally that could see a blow-off top in the near future.

Markets that go vertical without really pausing to take a breather will always correct down. Hard.

When that happens given the expansion of Bitcoin’s dominance of the crypto market by market cap percentage in the past few weeks, I would expect to see some strong rotation into both cash and alt coins just clearing major technical hurdles on any correction.

And just so we’re clear as to what’s happening here. The mother of all safe haven trades is emerging. Trade Wars, Near Hot Ones, tariffs, sanctions, popular uprisings and political instability are all on the table.

While we’re all focused on whatever short-term idiocy comes out of Donald Trump’s mouth to secure his control over the Overton Window, we should be asking ourselves why the ECB is going looking at even more negative rates, LIBOR has inverted alongside Eurodollar and the U.S. Treasury market and stocks are at all-time highs.

The markets aren’t irrational. Our perceptions of what is driving this behavior is. Safe haven assets change with the times.

And when you step back from the insanity of the fiscal and political situation in the U.S. and Europe, the fall-out from their instability on emerging markets and the potential for major shifts in the geopolitical game board does it really seem all that odd that a simple electronic proxy for gold with thin supply, high trust and low holding risk would become a darling of the risk averse?

I don’t.

Read more here...

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Chinese stocks dipped at the open, scrambled back and then did nothing for the rest of the day...

 

European stocks ended lower - despite the Mnuchin pop...

 

US equities were juiced overnight by Mnuchin's trade deal comments then gave it all back as humans realized the machines had misunderstood his grammar - "deal WAS 90% done" is different from "deal IS 90% done."

 

Trannies and Nasdaq outperformed while Small Caps, Dow, and S&P were weakest...another weak close...

 

Semis soared today on Micron's gains

(AAPL also soared)

 

Today's strength was a rebound in cyclicals as recent outperformance of defensives was dumped...

 

VIX extended its recent gains, decoupling from stocks...

 

Treasury yields spiked notably higher today (front-end underperforming)...

 

10Y yields worked their way back up to a key resistance level from FOMC day...with a deja vu nature to the move...

 

The Dollar dipped today but remains in a tight range for the 3rd day since the FOMC day dump...

 

Yuan spiked on Mnuchin's trade deal comments then gave it all back...

 

Crude is the week's winner for now (thanks to a massive crude draw) with silver lagging...

 

Gold dropped most in 3 weeks today... back to 2-day lows...

 

While Gold traded down in USD today, in Canadian Loonies, gold is at a record high...

And in case you wondered, as Zimbabwe goes full hyper-inflate-tard again by banning foreign currency withdrawals and abandoning the USDollar, gold in RTGS$ (ZimDollars) is exploding...

Just how it is supposed to.

 

Finally, the following are the dates of the last all-time high for various assets (h/t bullmarkets.co)...

  • Nikkei - 1989

  • Oil - 2008

  • Gold - 2011

  • Silver - 2011

  • Corn - 2012

  • Bitcoin - Dec 2017

  • DAX - Jan 2018

  • Russell 2K - Aug 2018

  • NASDAQ 100 - Apr 2019

Buy-And-Hold?