Lily: Why is crypto crashing? Will Bitcoin Prices Ever Recover? Here’s what traders and investors are saying

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What happened this week? We promise we won’t be talking crypto on Wrap every week, but this is becoming a more ubiquitous talking point as one of the hottest trades of the year appears to be emerging from the boil.

And it is interesting to note that the researchers at JPMorgan Chase JPM,
-0.17%
this week argued that investors are abandoning bitcoin BTCUSD,
+ 0.40%
so. This is a thesis that apparently has its challenges since the assumption is that bitcoin and gold investors don’t mix well.

See: Bitcoin’s 40% crash ‘looks like a capitulation’, says crypto expert, but here’s where the next crucial level of support lies

JPMorgan says that “the image of bitcoin flows continues to deteriorate and indicates a continuing decline in institutional investors,” and these investors gravitate towards bitcoin futures BTC.1,
-1.71%,
which, according to the report, “had its steepest and most sustained sell-off since the ascent of bitcoin began last October,” and in GC00 bullion
-0.42%.

What’s fascinating is that the top performing ETFs this week, among those reviewed by MarketWatch, are gold and silver miners.

The ETF ETFMG Prime Junior Silver Miners is up almost 10% so far this week, through Thursday noon, for example. Global X Silver Miners ETF is up 8.1% and VanEck Vectors Junior Gold Miners ETF has returned over 7% so far.

There is no ETF exclusively for companies that digitally mine bitcoin miners … yet, but Riot Blockchain Inc. shares RIOT,
+ 0.17%
are down nearly 7% over the same period this week and those of Marathon Digital Holdings MARA,
+ 0.83%
were off 1.2%, FactSet data show.

Weekly ETF movements

What’s up?

Modernizing the Dow Theory? The iShares Transportation Average ETF IYT ETF,
-0.52%
will be under renovation this summer.

The $ 2.2 billion ETF tracks the Dow Jones Transport-Weighted Average DJT,
-0.59%
and is considered an important indicator of the health of the market and the economy, following an index even older than the Dow Jones Industrial Average DJIA,
+ 0.55%.

Rather than following the top 20 transport and air freight companies on a price-weighted basis, the ETF will now follow 41 companies, including Uber Technologies Inc. UBER,
-0.28%
and Lyft Inc. LYFT,
-0.48%
on a market capitalization weighted basis.

Why is this important: The change is important because transportation is part of one of the oldest methods of technical analysis in the market called Dow Theory, which argues that any sustainable rally to new heights in Dow industrials must be accompanied by a new high. of the Dow. Jones Transportation Average.

It will be interesting to see how investors react to this change.

Is there a PSPC for this?

Perhaps the only thing buzzier than crypto over the past 12 months has been PSPCs or special purpose acquisition companies. In 2021, PSPCs raised nearly $ 100 billion in initial public offerings, more than the amount of PSPC’s IPOs from 2003 to 2019 combined.

However, the PSPC phenomenon, which has become a popular way for companies to go public, is suffering a powerful slowdown, but that hasn’t stopped the rollout of a new fund linked to the PSPC craze.

Tuttle Capital Management launched the Short De-SPAC ETF SOGU earlier this week,
-1.65%,
which aims to take advantage of the decline in the SPAC market.

Comments from the Securities and Exchange Commission, which said it was reviewing the accounting behind the PSPCs and their show, also helped add to the freshness in the space.

The Defiance Next Gen SPAC Derived ETF SPAK,
+ 1.60%
is down 30% in the last three months and 16% so far this year.

So a fund that bets against the universe of companies that have gone public through a PSPC is either late or just in time.

Graph of the week

This table highlights the growing focus on bank stocks in this phase of recovery from the COVID pandemic.

the The Wall Street Journal recently wrote that roughly $ 32 billion has been poured into large financial stocks this year, citing data from Bank of America strategists.

“The biggest driver of inflows to financials has been the belief that 2020 marks a secular low point for interest rates and inflation,” said the WSJ as quoted Michael Hartnett, chief investment strategist at Bank of America.