NFTs use blockchain technology to keep a digital record of ownership, similar to cryptocurrencies. They were first launched on ethereum, the same blockchain that supports the cryptocurrency ether, and most NFTs can still only be purchased using ether.
A months-long sell-off in cryptocurrencies and the implosion of TerraUSD has taken a bite out of NFT sales more recently. Weekly NFT sales had been more than cut in half from its early January peak of nearly $1 billion, according to data from NonFungible.com.
5. CryptoPunks
7-Day Sales Volume: $12.5 million Number of 7-Day Sales: 138 Highest Sale Price: $386,000
CryptoPunks
Explainer: “10,000 unique collectible characters with proof of ownership stored on the Ethereum blockchain. The project that inspired the modern CryptoArt movement.”
4. Meebits
7-Day Sales Volume: $28.0 million Number of Sales: 363 Highest Sale Price: $221,000
Explainer: “From the creators of CryptoPunks, presenting Meebits. The next-gen “OG”, 3D voxel avatars ready for any metaverse applications. Building upon the success of CryptoPunks and Autoglyphs to supply provably scarce and fairly distributed 3D character avatars.”
3. Azuki
7-Day Sales Volume: $35.5 million Number of Sales: 3,563 Highest Sale Price: $520,000
Explainer: “Azuki is a collection of 10,000 avatars that grant membership access to The Garden. The Garden is a corner of the internet where art, community, and culture fuse to create magic. The lines between physical and digital worlds are blurring and the rules are being rewritten.”
2. Otherside
7-Day Sales Volume: $40.5 million Number of Sales: 2,941 Highest Sale Price: $327,000
Explainer: “Otherside is a gamified, interoperable metaverse currently under development by Yuga Labs. Players will own the world, NFTs can become playable characters, and thousands will be able to play together in real time.”
1. Bored Ape Yacht Club
7-Day Sales Volume: $46.3 million Number of Sales: 806 Highest Sale Price: $403,000
This Bored Ape is just one of the NFTs auctioned at Sotheby’s recently.
Explainer: “BAYC is a collection of 10,000 Bored Ape NFTs — unique digital collectibles living on the Ethereum blockchain. Your Bored Ape doubles as your Yacht Club membership card, and grants access to members-only benefits.”
Bitcoin’s story is changing as the cryptocurrency space develops. The crypto leader’s positive momentum has reversed this year as the market is experiencing seismic shifts. There are many factors contributing to Bitcoin’s price weakness, but a large part of it has to do with rising interest rates in an inflationary environment.
In April, the consumer price index, the standard gauge of inflation, was up 8.3% from a year ago, slightly lower than March’s 8.5% reading but still at historically high levels.
In an effort to reduce inflation in the economy, the Federal Reserve is moving toward a tighter monetary policy, as shown in its latest decision to increase interest rates by 50 basis points, the steepest increase in more than 20 years. The stock market has responded with an extended sell-off, with stocks across the board pulling back. Cryptocurrencies including Bitcoin, which trades under the symbol BTC, have been falling alongside them. The price of Bitcoin fell by 37% from the new year to May 12, and it fell more than 50% from its November all-time highs.
As the market expects inflation to stay above the Fed’s target, the central bank is expected to continue to hike interest rates throughout the year. If this scenario follows through, it is worth exploring these themes around what this means for Bitcoin and how crypto investors can respond:
Bitcoin’s correlation to the stock market.
Bitcoin is maturing.
How are Bitcoin investors reacting to interest rates?
Bitcoin’s Correlation to the Stock Market
The effect of rising interest rates on Bitcoin is the latest change that has been playing out in crypto. During this time, Bitcoin’s price has been nothing short of volatile. But Bitcoin is not alone. In fact, in the past several months, there have been high correlations between movements in Bitcoin and stock indicators like the S&P 500 and the Nasdaq.
Tech stocks in particular struggle with rising interest rates. The e-commerce giant Amazon.com Inc. (ticker: AMZN) is down more than 35% for the year through May 12, while Apple Inc. (AAPL) has fallen 18% during the same time and Meta Platforms Inc. (FB) has dropped more than 42%. Bitcoin is following this price action. The crypto leader’s value had been moving between $38,000 and $48,000 for months but recently fell below $30,000. This shows that investors currently view Bitcoin as a “risk on” asset.
Bitcoin followed the drawdown in the equities market, though not in a drastic way, says William Cai, partner and co-founder of financial services company Wilshire Phoenix.
Originally, Bitcoin was thought to be an uncorrelated asset to the broader stock market. In other words, Bitcoin and traditional assets like stocks and bonds would not necessarily move in tandem or in opposite directions, potentially making the cryptocurrency a portfolio diversifier that can help protect against downside risks of other assets. However, the correlation between stocks and Bitcoin has increased recently, and experts expect this correlation to continue in the near to medium term.
The current economic environment provides a ripe ground for large movements in risky assets. Bitcoin is accepted as an asset class, but it’s still considered a higher-risk asset, similar to speculative tech stocks. According to data by Arcane Research, the 90-day correlation between Bitcoin and the S&P 500 was 0.633 as of May 9.
“Short- to medium-term higher interest rates probably make for slightly less (of a) short-term bullish case (for) BTC,” says Andy Long, CEO of White Rock Management, a global digital mining company.
But in the long term, Long says, in an environment where there are higher interest rates, freer money and a return of quantitative easing, “BTC is hard money that isn’t going away.”
Bitcoin Is Maturing
Bitcoin’s reaction to the Fed’s actions to raise rates suggests that it is acting similarly to the general market. Even though it has been around for just over a decade, Bitcoin is slowly transitioning into a mature asset class like stocks, bonds or commodities. It’s no longer so risky and such a “fringe asset” that investors liquidate when they’re concerned about volatility, Cai says.
“You used to see sell-offs in the Bitcoin market when people became worried,” Cai explains, but now there’s more of an acceptance. “Bitcoin has blended into the risky asset class,” Cai says. Investors will see decorrelation over a longer time horizon, but for now, the high correlation is a sign that the asset class is maturing, he says.
“It’s a positive sign that in periods of price drawdowns, there’s no panic in the underlying technology or industry as a whole,” Cai says.
While investors and traders are trying to figure out what the next crypto moves are as the asset prices fluctuate, the underlying asset class and the adoption by Wall Street and businesses has been nonstop and continues to drive forward, Cai says.
How Are Bitcoin Investors Reacting to Interest Rates?
Activity in the crypto market has been slowing down. Experts say most of this is because retail investors are scaling back on crypto to fit their risk tolerance. Institutions, on the other hand, have been moving into Bitcoin in the past few years.
Retail investors tend to buy when the market is going up and tend to sell in a market panic, says Yubo Ruan, CEO of Parallel Finance, a decentralized lending and staking protocol. This is the moment when retail investors will cut their exposure – it’s the fundamental psychology of the retail markets, he says.
Institutions like hedge funds and crypto-specific venture funds are coming in and buying the dip. Some are short-term buyers, but many are holding crypto for the long run, and they’re using the market drop to accumulate Bitcoin at a cheaper value, Ruan explains.
With inflation persistently high, retail investors need cash flow, Ruan says. Retail investors are emotional, so they sometimes purchase a large amount of Bitcoin, then when Bitcoin falls drastically, they need money and are afraid of how long it will take for the market to recover, so they want to take off risk, Ruan says.
So what can investors do in this chaotic crypto market?
“The best thing you can do with Bitcoin is lock it in a box and look at it in five, 10 years’ time,” Long says. If you try to guess the market, the market in turn is good at fooling you, he says.
Looking into the near-term future, Ruan says Bitcoin may continue to drop: “We can potentially see a Bitcoin bottom somewhere between $20,000 to $25,000, which can be a good region to accumulate.”
(The current economic environment provides a ripe ground for large movements in risky assets. Bitcoin is accepted as an asset class, but it’s still considered a higher-risk asset, similar to speculative tech stocks. US NEWS)
The reversal reflects recent energy strength and tech weakness
The last time Aramco was bigger than Apple was in 2020
Saudi Aramco overtook Apple Inc. as the world’s most valuable company, stoked by a surge in oil prices that is buoying the crude producer while adding to an inflation surge that is throttling demand for technology stocks.
Aramco traded near its highest level on record on Wednesday, with a market capitalization of about $2.43 trillion, surpassing that of Apple for the first time since 2020. The iPhone maker fell 4.4% in New York to $147.53, giving it a valuation of $2.38 trillion.
Even if the move proves short-lived and Apple retakes the top spot again, the role reversal underscores the power of major forces coursing through the global economy.
Soaring oil prices, while great for profits at Aramco, are exacerbating rising inflation that is forcing the Federal Reserve to rise interest rates at the fastest pace in decades. The higher rates go, the more investors discount the value of future revenue flows from tech companies and push down their stock prices.
“You can’t compare Apple to Saudi Aramco in terms of their businesses or fundamentals, but the outlook for the commodity space has improved. They’re the beneficiaries of inflation and tight supply,” said James Meyer, chief investment officer at Tower Bridge Advisors.
With the Fed on pace to further raise rates by at least another 150 basis points this year and with no prospects yet of a resolution for the conflict in Ukraine, it may be a while until tech regains dominance, according to Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder. “There’s panic selling in a lot of tech and other high-multiple names, and the money coming out of there seems headed in particular for energy, which for now has a favorable outlook, given commodity prices,” he said. “Companies like Aramco are benefitting significantly from this environment.”
Oil Halts Slide as Fuel Stocks Plunge Ahead of Driving Season
US distillate inventories fell to the lowest since May 2005
New York gasoline inventories fell to lowest since 2017
Weekly US crude oil production declined for the first time in three months, signaling that soaring costs across the oil fields may be preventing drillers from expanding output.
The decline hits as the oil-consuming nations are scrambling for additional supplies to reduce reliance on Russia and bring down the skyrocketing crude prices. President Joe Biden has urged the industry to raise supply to help battle historically high fuel inflation.
In its Short-Term Energy Outlook report this week, the EIA lowered its production forecast through 2023. Drillers have said they are experiencing spiraling prices on everything from rigs and workers to diesel fuel and frack sand.
Oil rallied as the European Union continued to haggle with holdouts over a Russian crude ban while a US government report showed fuel inventories plunging ahead of the summer driving season.
West Texas Intermediate futures rebounded over $5 on Wednesday, halting a two-day slide in which futures shed more than $10. On Wednesday, Hungary said it will only agree to a ban on Russian imports if shipments via pipelines are excluded. In the US, the Energy Information Administration reported that distillate inventories fell to the lowest since May 2005.
Goldman Sachs (NYSE:GS) is said to be exiting most SPACs it has taken public due to concerns over liabilities after regulators released proposed rules.
Goldman (GS), the No. 2 biggest underwrites of SPACS, is telling the SPAC sponsors it will be terminating its involvement, according to a Bloomberg report. The bank is also pausing new U.S. SPAC issuance for the time being.
The Goldman SPAC exit comes after Bloomberg reported early last month that Citi (C) was said to put a temporary hold on underwriting IPO for SPACs until companies can determine legal liabilities with new SEC proposed rules.
Goldman (GS) confirmed with Bloomberg in a statement that the bank was reducing its involvement with SPAC due to changes in the regulatory environment.
The Goldman and Citi pauses come after the SEC unveiled new SPAC regulations in March aimed in part at discouraging the dissemination of inaccurate growth forecasts about potential mergers. The new rules emphasize that investors have the right to sue blank-check companies if they issue exaggerated projections or bullish statements about the companies they plan to take public
Securities and Exchange Commission Chairman Gary Gensler said in December that he believes that investors may not be getting the same protections between SPACs and traditional IPOs. Some of these investor protections include disclosure, marketing practices and gatekeepers.
Upcoming SPACs
Here are 10 of the most headline-grabbing SPACs that either recently announced acquisition targets or may soon:
Someone with a lot of money to spend has taken a bearish stance on Carvana (NYSE:CVNA). And retail traders should know. As large positions show up today on publicly available options history.
05/10/2022 13:02
Someone with a lot of money to spend has taken a bearish stance on Carvana (NYSE:CVNA).
And retail traders should know.
We noticed this today when the big position showed up on publicly available options history that we track.
Whether this is an institution or just a wealthy individual, we don’t know. But when something this big happens with CVNA, it often means somebody knows something is about to happen.
The overall sentiment of these big-money traders is split between 40% bullish and 59%, bearish.
Out of all of the special options we uncovered, 30 are puts, for a total amount of $2,062,273, and 14 are calls, for a total amount of $883,298.
What’s The Price Target?
Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $25.0 to $95.0 for Carvana over the last 3 months.
Volume & Open Interest Development
Looking at the volume and open interest is a powerful move while trading options. This data can help you track the liquidity and interest for Carvana’s options for a given strike price. Below, we can observe the evolution of the volume and open interest of calls and puts, respectively, for all of Carvana’s whale trades within a strike price range from $25.0 to $95.0 in the last 30 days.
Carvana Option Volume And Open Interest Over Last 30 Days
Biggest Options Spotted:
Symbol
PUT/CALL
Trade Type
Sentiment
Exp. Date
Strike Price
Total Trade Price
Open Interest
Volume
CVNA
PUT
SWEEP
BEARISH
05/13/22
$40.00
$210.0K
1.5K
562
CVNA
PUT
SWEEP
BULLISH
05/27/22
$60.00
$179.7K
223
140
CVNA
CALL
SWEEP
BULLISH
05/20/22
$33.00
$148.5K
0
198
CVNA
PUT
TRADE
BULLISH
01/19/24
$95.00
$135.7K
303
144
CVNA
PUT
TRADE
BULLISH
01/19/24
$95.00
$129.7K
303
122
Where Is Carvana Standing Right Now?
With a volume of 9,268,837, the price of CVNA is down -8.31% at $35.55.
RSI indicators hint that the underlying stock may be oversold.
Next earnings are expected to be released in 86 days.
Options are a riskier asset compared to just trading the stock, but they have higher profit potential. Serious options traders manage this risk by educating themselves daily, scaling in and out of trades, following more than one indicator, and following the markets closely.
