While stocks have been ducking and diving around hawkish talk from central banks, it’s looking like another up day for cryptocurrencies.
“Perhaps the most interesting aspect of the rally in the crypto space is that it has unfolded independently from any move in speculative equities after a long period of seeming tight correlation between the two markets,” said John Hardy, head of foreign-exchange strategy at Saxo Bank.
That brings us to our call of the day, where we continue chatting with president of macroeconomic research firm Lamoureux & Co., Yves Lamoureux. He’s doubling down on bitcoin exchange and digital-asset marketplace Bakkt
BKKT,
but says steer clear of bitcoin (more on that later).
Read: Forecaster Yves Lamoureux says ‘seller exhaustion’ is creating opportunity in these stocks
He told MarketWatch in April 2021 that Bakkt was a better long-term play than digital exchange Coinbase
COIN.
Bakkt went from $10 at the time of that call to $42 by October 2021. Since then, it has tumbled along with the crypto pullback, changing hands Monday at around $5.80. No matter, Lamoureux said if his Bakkt “idea was good at $10, well it’s even better at $4.”
“I like this one, particularly because I think they will [become] custodian to the U.S. dollar digital version. You know the central banks are all going to have their own currency,” Lamoureux said.
Many global central banks, including that of the U.S. and governments are busy researching central bank digital currencies (CBDCs), and India recently said its own will be ready by early 2023.
Bakkt “belongs to the same people that own the New York Stock Exchange. They’re used to protecting stocks and used to having techniques. And I think that at some point, Bakkt becomes the custodian of the U.S. digital dollar…so it was great last year, it’s even better now.”
Owning Bakkt links directly to another space he’s watching closely — post-quantum cybersecurity. “The coming of quantum computers will break the bitcoin encryption and may also create chaos in stocks from malicious actors,” he said, noting that while solutions may arrive, CBDCs may offer better protection.
Lamoureux said this isn’t an issue now but down the road for bitcoin, perhaps in 2027, past the next halving of the crypto due in 2024.
“For me a U.S. digital dollar would have been created with the intent of being quantum unhackable. We think BKKT will fit in this new era where really loyalty points and digital dollars live side by side as currencies,” he said.
As for bitcoin
BTCUSD,
Lamoureux is advising his followers not to chase the cryptocurrency. He spotted a bitcoin top in November — it hit a record above $68,000 on the 10th of that month. He made prescient bitcoin predictions in early 2017 and mid-2020.
That November call came after the Los Angeles arena was changing its name to crypto.com, and the forecaster tweeted that it looked like a similar take on the so-called skyscraper index theory, developed in 1999 by a property analyst who connected economic downturns with the construction of the world’s tallest buildings.
“So I said, ‘Are we getting into a crypto winter and of course, bitcoin started to drop.’” recalls Lamoureux.
But it isn’t just a skyscraper issue. “Bitcoin is going down because it’s anticipating we have deflation…what is coming next is not inflation, what is coming next is deflation. That’s why people don’t get it right, that’s why they got caught with bitcoin going down because they didn’t anticipate that next big phase of deflation,” he said.
“And when it’s obvious central banks are going to come back and print and then bitcoin will be going up, stocks will be going up,” Lamoureux said.
The buzz
SoftBank
JP:9984
is planning an initial public offering of Arm, after a $40 billion sale of the chip designer to Nvidia
NVDA
fell apart due to “regulatory challenges.” Nvidia will book a $1.36 billion charge related to the deal termination.
Peloton
PTON,
which hit a record Monday on takeover talk, is down after the exercise-bike confirmed co-founder John Foley will exit as CEO and a cost-cutting plan will see 2,800 jobs go. It reports earnings today.
COVID-19 vaccine maker Pfizer
PFE
is tumbling after a profit beat, but a revenue miss. Harley-Davidson
HOG
shares are climbing on a surprise profit.
Chipotle
CMG,
Lyft
LYFT
and Aurora Cannabis
CA:ACB
will report late. Shares of BP
BP
UK:BP
are up after strong results from the energy giant.
Tilray
CA:TLRY
will create a new medical unit by combining related divisions of its company and Alphria’s.
American Express
AXP
has debuted its first customer debit card and checking account for consumers.
A small-business sentiment optimism index fell, with a record number of companies raising prices. The U.S. trade deficit set a new record of $859 billion in 2021. Quarterly household debt data is due later.
CF Acquisition
CFVI
soared then fell in late trading over chatter controversial podcaster Joe Rogan could move from Spotify
SPOT
to Rumble, an online platform that plans a special-purpose acquisition company merger with CF. Similar moves were seen by Digital World Acquisition Corp.
DWAC,
due to merge with Trump Media & Technology Group.
On that note, rocker Neil Young, who yanked his music from Spotify over concerns about COVID-19 disinformation from Rogan’s podcasts, says employees of the music streamer should quit “before it eats up your soul.”
California plans to end a strict COVID-19 indoor mask mandate by Feb. 15.
The markets
Stocks
DJIA
COMP
are struggling for direction, as bond yields
BX:TMUBMUSD10Y
resume a march towards 2%. The action has been mixed in Asia
HK:HSI
AU:XJO,
and European equities
XX:SXXP
have struggled. Oil
CL00
BRN00
prices are tumbling and gold
GC00
is softer, and the dollar
DXY
is climbing, as hawkish Monday comments by European Central Bank President Christine Lagarde are tanking the euro
EURUSD.
The chart
“While consumer interest in inflation has been high all year, Republicans increased their discussion of the topic to try to tie rising prices to President Biden’s agenda in May, while Democrats shifted gears in December, pointing to the need to fight inflation as a reason to pass Build Back Better,” notes analytical public affairs consulting firm, Hamilton Place Strategies, providing this chart of 2021 searches.
The tickers
These were the top stock tickers on MarketWatch as of 6 a.m. Eastern Time.
Random reads
Troy Kotsur has become the first deaf man to receive an Oscar nominee, for his role in the buzzworthy CODA.
Germany is fuming after suit-violation chaos sees ski jumpers disqualified from the Beijing Winter Olympics.
And everyone relax, comedian Leslie Jones will resume her Olympic tweets.
New York City mayor Eric Adams takes heat for comparing cheese to heroin.
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