📊 EV’s Charts of the Week #80
Hi, I’m Azeem Azhar. I convene Exponential View to help us understand how our societies and political economy will change under the force of rapidly accelerating technologies. Every Wednesday, I do this through Charts of the Week.
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DEPT OF CRYPTO
They all fall together
This chart shows that since November 2021, NASDAQ 100 and Bitcoin (a good proxy for the rest of cryptocurrencies), have increasingly grown in correlation. Bitcoin has enjoyed long periods of much lower correlation with many traditional assets, but not so much in the past years.
Bitcoin’s bubble burst
This chart, courtesy of the Bank of America, shows how massive the Bitcoin bubble was by the end of 2021. This is one more indication that the phase the crypto market is going through is ultimately healthy. Unsustainable projects are failing, and the Bitcoin bubble is bursting. What comes next? Hopefully, increasing experimentation, learning from mistakes, and a less volatile market.
Crypto traffic jam
Of course, once the froth in a market clears, we can see where the real value might lie. The Bank of International Settlements annual report contains a great chapter on the Future of the Monetary system describing a “burst of creative innovation is underway in money and payments.” It’s a good read. One of my favourite charts is below. It shows a great analysis of network congestion on Ethereum and how gas fees asymptote under load. And to the right, the growing fragmentation of Layer 1 blockchains. (Spot the disappearance of Terra).
DEPT OF POLITICS
The sick man of Europe
The UK’s business climate has remained chilly. The collapse started after the Brexit referendum in summer of 2016. It has yet to recover.