Mar. 29 Markets Report: Back in Bull Mode

People hate The Oscars for a variety of reasons, but as Chris Rock said himself, this year's show was “the greatest night in the history of television”. We're sure you've seen THAT viral moment (and from multiple angles), but in all the excitement, you may have missed that a pretty big milestone was reached as a Big Tech company took home the biggest prize for the first time, and shares climbed the next day. Guess we all have to watch these shows with one eye on the markets now.

On a more somber note, the Academy also held a moment of silence for the people of Ukraine. The war shows no signs of slowing, although President Zelenskyy has now indicated a willingness to commit to neutrality in hopes of reaching a resolution, and observers around the world are getting louder and more panicky about what the conflict means for global food markets in the coming year. 

Over in the US, the prevalence of the BA.2 Omicron subvariant has more than doubled in two weeks. Still, epidemiologists like Dr. Anthony Fauci and Ali Mokdad are not expecting cases to surge over the spring and summer. This winter, however, might be a whole other matter. If we've learned anything from the last two years, its that this virus (and its effect on everything from stock prices to real estate trends) is incredibly difficult to predict. So, fingers crossed and attention glued to the markets it is?

Check out the details on these and get updates on more of your favorite asset classes below.

Is the crypto market back in bull mode now that Bitcoin has broken past the $46K resistance level? BTC and ETH are both up over 16% for the week, with most other altcoins pumping in tandem.

VeChain (VET), Filecoin (FIL) and Cardano (ADA) are among the popular names that have been surging. But of all the large-cap cryptos, this week’s top three gainers are Zilliqa (ZIL) at 148.54%, Holo (HOT) at 53.08% and Chainbing (CBG) at 52.24%.

Bitcoin’s correlation to the S&P 500 just hit a 17-month high, so it makes sense why BTC is surging at this particular moment. But this rebound can also be seen as a culmination of many bullish events over the past few months, including: 

• Do Kwon, the creator of Terra (LUNA) buying billions of dollars in Bitcoin to back the stablecoin TerraUSD (UST). 
• El Salvador’s upcoming Bitcoin “volcano bonds”. 
• Bitcoin balances on exchanges reaching a three-year low, according to data provider Glassnode.
• Ukraine’s legalization of cryptocurrency and acceptance of over $100 million in crypto donations. 
• The successful launch of Ethereum’s “merge” testnet, which is a precursor to the project’s switch to proof-of-stake (POS). 

With each passing day, week, month, year, the world is becoming more bullish on crypto. Critics can’t seem to understand why people are committing so much energy and money to something as “worthless” as Bitcoin. But the simple case of a Ukrainian refugee, who was able to reach Poland with 40% of his life savings in Bitcoin on a USB drive, reaffirms that crypto is adding real value to the world. 

Geopolitical drama, inflation, rising interest rates, pandemic concerns, market volatility. Need I go on? This smorgasbord of problems is hammering tech stocks in the public markets, and causing unicorns to steer clear of IPOs. Let’s be real: how many tech IPOs have we had a full quarter into the year?

Case in point of devalued tech stocks: Instacart, a booming grocery delivery business once valued at $39 billion has recently cut its valuation by almost 40% to $24 billion. Apparently, investors and employees are increasingly settling for lower prices by selling their shares on secondary market platforms like EquityZen and Forge. 

But even in the midst of all this uncertainty, one former Andreesen Horowitz general partner has been able to raise $1.5 billion to invest in crypto-related startups. This VC is none other than Katie Haun of Haun Ventures. Aside from being able to raise 10 figures during a period when investors are generally more risk averse, this achievement is also notable because it is the largest fund ever raised by a solo female VC. Who run the world?

A Group of Seven meeting was held last Thursday, where President Joe Biden basically told everyone that a food shortage was imminent. But why is this?

The ongoing war is putting a lot of pressure on farmers to make up for the supply gap left by Russia and Ukraine. And as the price of wheat and other crops rise, so do fertilizer and fuel prices. We’re all familiar with the pain at the pump caused by rising fuel prices. 

But the cost of fertilizer has been skyrocketing even more. For context, fertilizer is necessary for farmers to supply plants with nutrition at scale. The problem is, Russia is the world’s top producer of fertilizers. According to the American Farm Bureau Federation, fertilizer costs have already soared as much as 300% in certain areas. 

Some countries are currently launching farming incentives to boost grain production, like Ireland’s €12mn crop cultivation scheme. They are paying €400 per hectare to encourage farmers to plant more barley, wheat and oats. But these incentives might not be enough to cover the rising fertilizer and fuel costs. 

The consequences of a global food shortage simply cannot be understated. Just play it out in your head. Less fertilizer equals less food production. Less food production equals more hunger. More munger equals high unrest. And high unrest equals destruction and chaos.

Even public figures like the CEO of Agco are worried that this food shortage could bring about riots comparable to the Arab Spring. 

Despite rising rates and oil prices, stocks experienced another week of straight gains. The Dow Jones, S&P 500 and the Nasdaq ripped higher by +0.89%, +1.83% and +2.39% respectively. 

Energy was the top performing sector, popping +3.50%, and was closely followed by Materials (+3.22%), Telecom (+2.83%) and Utilities (+2.76%). The biggest loser this week? Healthcare at -0.11%. 

Individual stocks like Tesla, Coterra, and Intel have rallied the hardest in the past 7 days. Tesla stock, in particular, has been pumping on news that the company is looking to split the stock so it can start paying dividends.

Yesterday, Apple hit its longest winning streak since October of 2010, when it ended in the positive for the tenth consecutive session. This comes on the heels of the company's first Academy Award win; the streaming service AppleTV+ nabbed the Best Picture Oscar for CODA on Sunday night.

Stocks and bonds usually move in opposite directions, but the 10-year Treasury yield still reached a high of 2.54% on Monday — up from 2.14% one week earlier.

All in all, the market seems to have a positive near-term outlook. But the tides might turn with the release of new economic data (like the March employment report) and developments in the Ukraine war.  

War memorabilia — like Napoleon Bonaparte and Duke of Wellington signed letters from the Battle of Waterloo — can fetch a pretty penny on the secondary market. Just check these eBay listings. 

Ukraine’s State Service for Special Communication and Information Protection must have caught onto this, since they are planning to launch an NFT war museum to document the war crimes committed by Russia and raise money for humanitarian aid. With Ukraine being able to amass $100 million in donations alone, just imagine how many more millions they’ll generate by selling NFTs. 

It seems like last Thursday was NFT splurge-day. While Bored Apes Yacht Club (BAYC) and CryptoPunks usually dominate the NFT sales charts, this week that honor belongs to Art Blocks — a programmable art collection. One piece called Fidenza #692 sold for 320 ETH ($995K), over 140X the average price of an ArtBlocks NFT.

Speaking of big sales, the pseudonymous XCOPY is one of the most successful artists in the NFT space — with more than 140 of their NFTs valued at over $1 million on SuperRare. Their top-selling piece, Right-click and Save As Guy, fetched over $7 million back in December. 

On Thursday, XCOPY’s Max Pain collection was on sale for all but 10 minutes before they were all snatched up. At 1 ETH (approx. $3,100) a piece, XCOPY generated nearly $23 million in a matter of minutes. Who says the NFT market is dead?