3 Nov 2021

Decentralised finance deposits (lending and exchanges) usage has grown 30,000% since early 2020. I have to wonder how this growth can be maintained, I am prepared to settle for 1,000%.

Before I come back to the crypto world I have to mention we are continuing to make new all time highs in the equity markets. The next 2 charts highlight the sentiment of the market at the moment. Remember that markets are always vulnerable to big corrections/reversals at sentiment extremes. Mr Gecko said in that famous movie – “Greed is Good”. Mr Berman says in that not yet released movie “Greed is Good (most of the time)”.

The market is only focused on upside right now. To infinity and beyond.

I have been carrying on about the RBA for the last week and the fight taking place between the economists and the bond traders. Yesterday Dr Lowe conceded a little but he wasn’t prepared to throw in the towel. I will explain in a bit more detail in future notes why many central bankers cannot fully tackle the inflation challenge.

The AUDUSD didn’t take too kindly to the Reserve Banks approach.

Let us have a quick look at how big crypto is relative to the rest of the market. I will compare Gold at 10.4 trillion with crypto at 2.6 trillion. Not too shabby for a 10yr old asset relative to one a few thousand years old.

If you want to understand who moves the market you only have to look west to the US. From Sydney looking east is quicker.

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