First Mover Asia: Crypto offering new opportunities for inflation-worried Indonesian investors; Bitcoin is flat

A report by the crypto exchange Gemini found that about two in five Indonesians own cryptocurrencies; ether also held its ground.

Good morning. Here’s what’s happening:

Prices: Bitcoin and ether were flat on Monday.

Insights: Indonesian investors are moving into crypto, a Genesis report found.

Technician's take: BTC's short-term momentum turned negative, which typically occurs during the first week of the month.

Prices

Bitcoin (BTC): $46,809 -0.4%

Ether (ETH): $3,541 -0.5%

Top Gainers

Asset	Ticker	Returns	Sector
EOS	EOS	+2.0%	Smart Contract Platform
Cardano	ADA	+1.5%	Smart Contract Platform
Dogecoin	DOGE	+1.2%	Currency

Top Losers

Asset	Ticker	Returns	Sector
Algorand	ALGO	−6.4%	Smart Contract Platform
Solana	SOL	−4.3%	Smart Contract Platform
Cosmos	ATOM	−4.1%	Smart Contract Platform

Bitcoin, ether run in place

Bitcoin and ether were roughly flat on Monday amid light trading Monday as investors seemed content to to watch events unfold, at least for the time being.

The largest cryptocurrency by market capitalization was recently trading at about $46,700, up slightly t from where it stood 24 hours earlier. Ether was similarly up over the same period. Most other major cryptos were in the red. SOL and AVAX were recently down about 4%. DOT fell roughly 3%. LUNA, which was up about 3%, offered one bright spot.

Crypto trading continued to be well off levels of just a few months ago, underscoring investors' caution amid economic uncertainties inflamed by Russia's unprovoked aggression in Ukraine, although major equity indexes were up with the tech-heavy Nasdaq rising 1.9%.

U.S. President Joe Biden said in brief remarks to reporters that the U.S. would add to sanctions meant to cripple the Russian economy after satellite pictures showed massive civilian casualties in the town of Bucha near the Ukraine capital of Kyiv. Countries in the European Union have recently shown signs that they might ratchet back their dependence on Russian oil. Brent crude oil, a widely regarded measure of energy prices, rose to $108 per barrel, up about $4 from where it finished Friday.

Amid Oanda Senior Market Analyst, UK & EMEA Craig Erlam noted bitcoin's choppiness over the past week after soaring past $47,000. "It's recovered over the last few days after finding some support around $44,000 but continues to struggle to find much momentum as it approaches last week's peak," Erlam said. "It could still build on that breakout but it may be more of a grind than we've seen in the past, given the current environment."

Markets

S&P 500: 4,581 +0.8%

DJIA: 34,921 +0.3%

Nasdaq: 14,532 +1.9%

Gold: $1,932 0.4%

Insights

Crypto offering a new opportunity for Indonesian investors

What’s the word for growth stock in Indonesian? Where can one find the equivalent of the Nasdaq in Jakarta?

That's a trick question. While Indonesia is home to many exciting startups, the stock exchange in Jakarta is a boring bourse. Over the past five years, the IDX80, an index of the top 80 companies on the Jakarta exchange, has fallen roughly 3%. In comparison, Taiwan’s TAIEX is up nearly 77% for the same time period and Korea’s KOSPI is up 25%.

Indonesia, Taiwan and South Korea indices (TradingView)

These aren’t the kind of returns you’d want if you are a young Indonesian in the country’s new middle class looking to build wealth. It’s old news that Indonesians are deeply invested in crypto; there are more crypto investors in-country than retail stock traders. But new research published from the crypto exchange Gemini helps quantify just how deep their interest is.

Crypto ownership (Gemini)

According to Gemini’s findings, 41% of all Indonesians own crypto – spread evenly across the two genders at 49-51% for male and female. The country’s relatively high ownership rate makes it an outlier, as the report found that countries with higher income tend to have higher degrees of crypto ownership. By comparison, the U.K. has 40%, Germany 43%, and France 62%.

And this is all a new phenomenon. Globally, 41% of survey respondents purchased crypto for the first time in 2021.

Aside from the stock market not providing opportunities to build wealth, inflation is on everyone’s mind. Gemini’s survey showed that 64% of people in Indonesia believe it’s a hedge against inflation, and 61% of people believe that crypto is the future of money. By comparison, in most of western Europe, only 20-23% of people share this view. In the U.S., it’s at 23%.

Those that cover the PC and mobile phone industry will note that many in emerging markets skipped over PCs entirely because their first “personal computer” was their smartphone. Likewise, telecoms didn’t bother with widespread installations of copper phone lines. Instead, 3G towers went up followed by 4G in the mid-2010s giving the average person ample bandwidth.

Clearly, the same pattern is emerging in finance.

Technician's take

Bitcoin daily price chart shows support/resistance levels. (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) dipped below $46,000 on Monday, indicating a loss of upside momentum.

Price action was choppy over the weekend after buyers failed to approach the $48,000 resistance level. That points to continued price weakness, especially as momentum signals on the daily chart turned negative, similar to what occurred during the first week of February and March.

Support at $43,000 could stabilize the pullback, which is near the March 25 breakout level. Still, BTC will need to break above the 200-day moving average, currently at $48,286, in order to yield upside targets beyond the $50,966 resistance level.

For now, momentum signals remain positive on the weekly chart, which means downside could be limited.

Important events

Celo Connect conference for developers, entrepreneurs and investors

8:30 a.m. HKT/SGT(12:30 a.m. UTC): Jibun (Japan) bank services (March)

12:30 p.m. HKT/SGT(4:30 a.m. UTC): Reserve Bank of Australia interest rate decision and statement