Invictus Capital: Weekly Wrap 05.02

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Market News

A relatively quiet week for markets saw the Gamestop hype die down along with a cratering share price, down around 90% from last Thursday’s high of $508; as expected, late-to-the-party retail traders were left holding the ashes, with hedge funds and retail who’d been long pre-hype (and those who shorted at the peak) reaping rewards.

Back in reality, markets took heart from encouraging global manufacturing PMIs, statements from the Bank of England expecting a rapid economic rebound, and estimate-beating US employment readings. The US yield curve responded by steepening to levels not seen since 2015 — generally a sign of bullish market expectations for the economy’s future.

Higher long-term US yields helped the dollar to surge by attracting capital flows. The combined effect of this dollar strength and greater real yields (despite inflation expectations continuing to rise) weighed heavily on gold, with the price briefly dipping back below $1,800/toz on Thursday. Global stock markets had a great week, with European indices having their best week in months.

Despite the aforementioned dollar strength, crypto markets were not perturbed. Ethereum broke above the $1,400 level under which it had been consolidating, ending the week more than 20% up. Bitcoin also rallied strongly, supported by on-chain metrics showing net outflows from exchanges (all while stablecoin inflows continue to spike). This suggests buyers intend to hold over the longer term. Altcoins continued their ascent as the Invictus C10 Fund reached an all-time high of $3.40 on Friday while C20 remains poised to break the $2 mark.

Indicators (29 January — 5 February)

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