• Regional banks extend losses and some paused due to volatility; Bitcoin up 2%
• Markets expect a 94% probability of rate hike: how will Bitcoin react to tomorrow’s FOMC meeting?
• Sharpe Ratio indicates Bitcoin is the best horse in the race
Regional Banks Extend Losses
Several regional bank stocks were halted due to volatility on May 2 after dropping more than 25%. The KBW Nasdaq Regional Banking Index is down a further 4%, bringing its total losses for the year to -26%. Some of the worst-hit stocks include PacWest (-29%), Metropolitan Bank (-27%), Western Alliance (-25%), HomeStreet (-16%), Zions (-11%), First Foundation (-10%) and Comerica (-9%). Keycorp was down 8%.
Bitcoin Up 2%
In contrast, Bitcoin was up 2% today. This may be due to investors seeking alternatives that are less vulnerable to traditional market volatility. It could also be a sign that investors view Bitcoin as a safe haven asset during turbulent times.
94% Probability of Rate Hike
Markets currently expect a 94% probability of an interest rate hike at tomorrow’s FOMC meeting. If this happens, it could have significant implications for both traditional markets and cryptocurrencies like Bitcoin. It remains to be seen how the two will react in tandem or if there will be any correlation between them.
Sharpe Ratio Indicates Best Horse in Race
The Sharpe Ratio indicates that Bitcoin is currently the best horse in the race when compared with other assets such as stocks, bonds, commodities and gold. This suggests that investors may continue turning towards cryptocurrency investments for returns even in bear markets.
Miner Capitulation?
Finally, there is speculation that we may be on the verge of another miner capitulation event which could result in further price drops for Bitcoin. As miners sell off their holdings, it can cause downward price pressure on the market as supply increases while demand remains steady or decreases.