Major stock indices have fallen in the past few hours as the market appears a little unhappy that Jerome Powell refuses to put pressure on banks to pass on the low interest rates.
In a press conference Wednesday, Powell asked if banks would lend just $ 1.4 billion to small and medium-sized businesses from a $ 600 billion special fund – and he said banks would have to lend money to solvent companies.
If it hadn’t been for this debacle, one would think that the markets would have liked the politics of endless money printing to some extent, but if that money doesn’t find its way to mom and dad then the economy may not recover as much as they do it could.
Or maybe it’s just that stocks have risen in the past few days and the Dow is not far from its all-time high that one might expect a small dip
Or, as some speculate, maybe some are taking the profits on the stocks and putting them into cryptos.
Bitcoin and ETH are somehow hot again, especially Defi, which is turning heads right now. The calculation of risk and return could well have changed for some equity investors.
ETH is somehow leading again, although Crypto Profit is playing a bit of ping-pong , but there is now a new defibrillation relationship that we have been trying to figure out.
There is probably not enough data, at least from pure observation, but in the medium term defi-bullishness or the lack of it will clearly flow into ETH, because you need ETH in order to be able to participate in defi for the network fees.
So DeFi is most likely bringing new money directly into ETH, but in the short term, and we are talking about hours here, there is no obvious relationship with Uniswap, for example increasing significantly while ETH has not increased as much.
That may be because Uniswap is in the spotlight right now and therefore either a new fiat or a crypto ‚fiat‘ is clearly going there in the first place, with ETH perhaps more of an observer.
One would think that then the new Uniswap value would at least partially find its way to ETH, although it generally appears that there is a complementary relationship.
These internal crypto factors make any correlation or lack of correlation with stocks a complicated analysis because they have so far been seen to move together
That can change to a certain extent, and at least temporarily, because new things happen very quickly in this room – and therefore this room can be a little more bullish than stocks.
However, cryptos are flowing into stocks in a way as they are becoming more and more of an entry point for cool and smart people looking to invest or trade, with cryptos giving many a crash course on finance and investing and assets that eventually leads to a better understanding of stocks, bonds, and the rest – and that’s how a child becomes a financier.
Of course, we don’t expect grandfathers to appreciate this new value creation and its considerable economic benefits, so they focus solely on topping up stocks, but cryptos arguably have more power to change the general atmosphere towards optimism because they are more owned by ordinary people.