The crypto market settled into a frustrating, choppy trend, with Bitcoin and Ethereum fluctuating between gains and losses for much of the day. XRP coin shined, on the back of Coinbase’s recent announcement to finally list one of the largest crypto assets by market cap. The surge is unlikely to continue for much longer, because the asset is already widely available, not just via crypto exchanges but also investment vehicles. Moreover, unlike in traditional markets where the addition or deletion of an asset from a tracker-type product would result in rebalancing flows, the market for such products in the crypto ecosystem simply does not yet exist.
Still, the absence of a follow through sell-off should be taken as a positive and the base scenario is that Ethereum will soon reclaim the $150 level (a break below $130 will open up the door towards a low of $100). Nevertheless, there is plenty of caution in the air surrounding ETH's hard fork, largely due to the somewhat strained financial conditions that the cryptocurrency mining community finds itself in. As such, there is a risk that the Ethereum hard fork and the subsequent switch-over to Proof-of-Stake may do more harm than good, at least in the short term.
However, there is plenty to be positive about and the latest financial giant to join the digital asset arena is Julius Baer, one of the biggest banks in Switzerland. The bank has announced that it will enter into a partnership with Swiss cryptocurrency banking start-up SEBA. The bank is going to launch new digital asset services later this year. Using the SEBA platform, Julius Baer customers will be able to store, trade and invest in digital assets.
Finally, the Cayman Alternative Investment Summit (CAIS) announced the results of its recent survey of approximately 100 alternative investors and managers. Looking specifically at the tech-related shifts most anticipated to influence markets, survey respondents believe automation and machine learning (45%) and blockchain technologies (38%) are likely to have the biggest near-term impact globally. When asked about the global markets more broadly - investors believe cryptocurrency is the asset class that most represents a bubble right now (45%), as compared to US equities (20%), the leveraged loan market (19%), and private credit (16%).
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