May 22, 2022 - 3 min

Market Outlook (Week of May 23)

The S&P500 staged a late rally on Friday to prevent it from closing in bear market territory. Futures this evening are looking up, with the S&P500 and Nasdaq 100 up 0.84% and 1.05% respectively. Bitcoin is also trading above $30,000 but needs to decisively break $32,000 to confirm upward momentum.Investors are hoping to see a continuation on Monday for signs of a potential relief rally, but pessimism abounds of further downside risk. Per the WSJ, surveys of sentiment show fund managers (surveyed by Bank of America), Private investors (the American Association of Individual Investors) and financial newsletters (Investors Intelligence) are already at March 2020 levels of caution about stocks. Options that protect against market falls haven’t been so popular since back then, either. And consumer sentiment, as measured by the University of Michigan, is actually worse than it was then.

🍕🍕🍕 Happy Bitcoin Pizza Day!

Twelve years ago, on May 22, 2010, Laszlo Hanyecz, a Bitcoin miner, completed the world’s first documented Bitcoin (BTC) transaction for a physical item - 10,000 BTC for two pizzas. Based on today’s price, those two pizzas are worth a whopping $300 million! While Hanyecz’s decision may not seem financially sound in hindsight, this was a big moment for Bitcoin and demonstrated that it could be used as a medium of exchange!

Earlier this week, Binance commemorated BTC pizza day by creating a popup called Binance Pizza in Cannes which is currently hosting the famous film festival. Binance CEO Changpeng also showed up at Binance Pizza and took the time to toss a few pies and drive around on a delivery scooter.

Long-Form Tweets from Tweet Watch 🐣

Long-Form Reads 🧐

  • Ryan Sean Adams at Bankless proposes a valuation framework for DeFi Tokens based on the principles of growth-stage investing.
  • Blockworks Research published a post-mortem of the LUNA-UST “death spiral.” The timing of the first de-pegging is interesting and happed after Luna Foundation Gaurd happened after TerraForm Labs withdrew at least $150 million in liquidity from the Wormhole UST / 3CRV pool leading to a much greater impact of selling pressure on the price.
  • Pranav Kanade on why Web3 matters. Here’s an excerpt:
Let’s assume I own some stocks in my Robinhood account, a few mutual funds in my Fidelity account and I have some cash in my J.P Morgan checking account. Today (Web 2.0), when I need to use my Uber app to hail a ride, I need to use a credit or debit card. This introduces financial friction (paid to Visa and the banks) and requires several clicks and time on my end (the user) to ultimately settle these transactions at some point in the future. In the world of Web3, I custody my assets. In the Web3 version of the above scenario, Uber would immediately recognize the value in my Robinhood/Fidelity/JPM accounts and allow me to use those assets for payment, skipping a few intermediate steps and the middlemen. Saves everyone time and money.