Sunnier outlook for cryptocurrencies

Signs of life in crypto as risk appetite recovers

Risk appetite and cryptocurrency prices go hand in hand. The Nasdaq 100’s record high earlier and its subsequent decline coincide nicely with cryptocurrencies beginning to fall. But as both recover, the outlook for risk  begins to look more encouraging. Markets are probably bigger prisoners of seasonality than anyone would care to admit – Q4 is a better time for stocks and cryptocurrencies, and while this year’s worries are different to last year’s, there is still plenty of weight left in the bullish case.

Crypto infrastructure buildout continues

Crypto is growing up fast. The US is finally reckoning with its Choke Point 2.0 debanking era while the CFTC builds a proper retail framework. Standard Chartered, Mastercard, and Coinbase are embedding digital assets into mainstream banking and payments. France wants to tax stablecoin swaps at 31.4%, Russia is curbing P2P trading, and Bitcoin dominance has hit 60%. The infrastructure is maturing, and we can expect regulation to play catch-up.

What we’re watching – Earnings and rate expectations

The argument for continued economic expansion rests in large part on earnings, themselves built on forecasts of high AI growth. This, coupled with oil prices, has been the on-off format for risk appetite for months now. The busy earnings calendar of this week and next mean that earnings are the headline driver, but with oil prices showing a distinct reluctance to go down, the inflation element cannot be ignored.