Macro: The Nvidia miracle did not happen after all. Despite the publication of impressive results and the company’s attempts to reassure investors, the upturn was short-lived, leading to a decline in technology stocks. Even more surprisingly, European defense stocks have also suffered recent setbacks, penalized by the prospect of peace talks between Ukraine and Russia. The market seems quick to debunk its idols, but once the dust has settled, it is likely that bargain hunting will resurface. Meanwhile, the bond market is observing these turbulences with a certain degree of calm. Even if the prospect of a further rate cut in December is receding, the US 10-year yield remains on a downward trend and is still below 4.15%.
Crypto: Bitcoin has fallen for the fourth consecutive week. The king of cryptocurrencies has slipped 27% over this period, including 11% this week, returning to a level not seen since last April. In concrete terms, BTC, which hit a record high of over USD 126,000 last month, is now flirting with USD 80,000. As a result, Bitcoin is down 9% since 1 January. The same trend can be seen in spot Bitcoin ETFs: the outstanding amount of these products has fallen from £169 billion on 6 October to £113 billion today, a drop of 33%. More broadly, the entire cryptosphere is in freefall. Total market capitalisation has melted away by USD 1 trillion in one month and is now back to around USD 2.83 trillion. Bitcoin and its peers have suffered in particular from their correlation with tech stocks: between fears about the valuations of US Big Tech companies, the US shutdown that has clouded economic visibility, and the prospect of the Fed maintaining its key interest rates next month, the cryptosphere has given way. The stress on the markets will need to ease somewhat for Bitcoin to stabilise, although after two years of gains in 2023 and 2024 (up 460% in total), it is not surprising that some are also taking profits.
