Month: May 2021

The disappointing plunge in ‘hope’ from The Conference Board’s survey of consumer sentiment was echoed in the UMich sentiment survey as the headline slipped from 88.3 to 82.9 (and slightly below the preliminary data). Both current and expectations indices also tumbled, and all are still well below pre-pandemic levels…

Source: Bloomberg

As stimmies stall (see income collapse this morning), so buying conditions have also plunged…

Source: Bloomberg

And no drop is more significant than the crash in homebuying optimism (relative to record high homebuilder optimism).

Finally, we note the final May print for inflation expectations soared to 3.6% in the next 12 months, the hottest since 2008…

Source: Bloomberg

Record proportions of consumers reported higher prices across a wide range of discretionary purchases, including homes, vehicles, and household durables – the average change in May vastly exceeds all prior monthly changes

UMich Director Richard Curtin has fully jumped on the transitory bandwagon…

While higher inflation will diminish real incomes, the gains in spending will nonetheless be substantial. The key issue is whether the timing of spending decisions will advance due to the expected price increases. At present the growth in inflationary psychology is unlikely, but it cannot be completely dismissed. Early preventative actions are much less costly, but these actions are much more difficult when policy objectives include avoiding uneven distributional impacts across population subgroups. It will require keeping the level of stimulus higher for a longer period than would have seemed prudent in the past. The primary risk of this strategy is an accelerating inflation rate, which also has uneven distributional impacts. Shifting policy language and a small rate increase could douse inflationary psychology; it would be no surprise to consumers, as two-thirds already expect higher interest rates in the year ahead.

The recent retail buying euphoria has carried over into Friday with the original meme stocks, AMC and GME, soaring at the open amid unprecedented volumes.

AMC has soared 33%, trading at $35 at last check in a market where the bid/ask spread is approaching a dollar, rising as high as $36.72 after a burst of early buying, sending its market value above $16 billion…

… with Bloomberg reporting that it is now the most traded stock in the entire market based on value, and also the most traded in terms of volume (with pennystock HCMC the only name more actively traded).

… while GME is seeing a similar buying frenzy, if somewhat more subdued, rising as high as $268.8 or up 5.8%, and last seen around $263, the highest since March 15.

The gamma-driven meltup has seen a frenzy of deep out of the money call options in AMC being bought, with $50 calls expiring today being bought (and sold) hand over fist.

As Bloomberg notes, the WallStreetBets rally is also making waves in debt land as well, because while AMC shares have only returned to 2017’s heights, the company’s 12% junk bonds hit all-time highs this week as AMC debt due in 2026 rose to a record high 97.17 cents on the dollar Thursday after trading as low as 5 cents in November.

And while the FOMO is in fool, er, full force, the question is when does AMC take advantage of today’s buying frenzy and announce the next equity offering. As a reminder, in March CEO Adam Aron said that AMC “will carefully examine the raising of additional capital in whatever form we think is most attractive” and is focused on de-leveraging its more than $11 billion debt load. As Bloomberg notes, investors have suggested that the company should strike while the iron’s hot and sell more shares to either pay down or refinance that debt.

As a reminder, AMC raised $428 million by selling shares just two weeks ago at an average price of $9.94/share, which should give the movie-theater chain a “cushion through year-end to weather a $120 million monthly cash burn,” the pair wrote in a report this week. However, as Bloomberg Intelligence analysts add, AMC should capitalize on this moment and go even further, writing that “business fundamentals remain weak and uncertain at best as movie going is yet to kick off in a big way.”

The question is whether AMC management will surprise the Reddit army today or if it will wait until after the long weekend to unveil the latest dilution.

Authored by Thomas Lifson via American Thinker (emphasis ours),

The woman who sits atop 60 million dollars’ worth of donated funds, after the unexplained departure of her ostensibly charitable organization’s co-founders, failing to file legally required financial disclosures, and buying a multi-million dollar real estate portfolio, surprised everyone yesterday by announcing her resignation.

Claiming that it has nothing to do with criticism of her multi-million-dollar real estate buying spree and complaints of financially stiff-arming other BLM groups, Patrisse Cullors:

“announced Thursday that she is stepping down as executive director of the movement’s foundation. She decried what she called a smear campaign from a far-right group, but said neither that nor recent criticism from other Black organizers influenced her departure.

Patrisse Cullors, who has been at the helm of the Black Lives Matter Global Network Foundation for nearly six years, said she is leaving to focus on other projects, including the upcoming release of her second book and a multiyear TV development deal with Warner Bros Her last day with the foundation is Friday. (snip)

The 37-year-old activist said her resignation has been in the works for more than a year and has nothing to do with the personal attacks she has faced from far-right groups or any dissension within the movement.  (Al Jazeera)

That must be why her announcement came out of the blue and surprised everyone.

Here is a five-minute video she released announcing her move:

While Cullors co-founded BLM with Alicia Garza and Opal Tometi in the wake of George Zimmerman’s not guilty verdict in the Trayvon Martin death, she was the only one who remained with the foundation that took in $90 million last year, in the wake of George Floyd’s death while in police custody.  

AP spoke with Cullors about her move:

“I’ve created the infrastructure and the support, and the necessary bones and foundation, so that I can leave,” Cullors told The Associated Press. “It feels like the time is right.” (snip)

“Those were right-wing attacks that tried to discredit my character, and I don’t operate off of what the right thinks about me,” Cullors said.

As she departs, the foundation is bringing aboard two new interim senior executives to help steer it in the immediate future: Monifa Bandele, a longtime BLM organizer and founder of the Malcolm X Grassroots Movement in New York City, and Makani Themba, an early backer of the BLM movement and chief strategist at Higher Ground Change Strategies in Jackson, Mississippi.

“I think both of them come with not only a wealth of movement experience, but also a wealth of executive experience,” Cullors said.

The BLM foundation revealed to the AP in February that it took in just over $90 million last year, following the May 2020 murder of George Floyd, a Black man whose last breaths under the knee of a white Minneapolis police officer inspired protests globally. The foundation said it ended 2020 with a balance of more than $60 million, after spending nearly a quarter of its assets on operating expenses, grants to Black-led organizations and other charitable giving.  (snip)

In 2020, the BLM foundation spun off its network of chapters as a sister collective called BLM Grassroots, so that it could build out its capacity as a philanthropic organization. Although many groups use “Black Lives Matter” or “BLM” in their names, less than a dozen are considered affiliates of the chapter network.

There is considerable dissatisfaction over the disposition of the millions of dollars raised. The UK Daily Mail reports:

The head of New York City’s BLM chapter called for an independent investigation into the organization’s finances after revelations about the property portfolio surfaced. 

‘If you go around calling yourself a socialist, you have to ask how much of her own personal money is going to charitable causes,’ BLM organizer Hawk Newsome told The New York Post. 

‘It’s really sad because it makes people doubt the validity of the movement and overlook the fact that it’s the people that carry this movement.’  (snip)

Cullors’ co-founders have left, and last summer Cullors assumed leadership of the Black Lives Matter Global Network – the national group that oversees the local chapters of the loosely-arranged movement. (snip)

BLM’s Global Network filters its donations through a group called Thousand Currents, Insider reported in June – which made it even more complicated to trace the cash. 

Solome Lemma, executive director of Thousand Currents, told the site: ‘Donations to BLM are restricted donations to support the activities of BLM.’ 

The New York Post reports:

Critics of the foundation contend more of that money should have gone to the families of Black victims of police brutality who have been unable to access the resources needed to deal with their trauma and loss.

“That is the most tragic aspect,” said the Rev. T. Sheri Dickerson, president of an Oklahoma City BLM chapter and a representative of the #BLM10, a national group of organizers that has publicly criticized the foundation over funding and transparency.

“I know some of (the families) are feeling exploited, their pain exploited, and that’s not something that I ever want to be affiliated with,” Dickerson said.

Cullors and the foundation have said they do support families without making public announcements or disclosing dollar amounts.

Adding to the difficulty in tracing the financial flows of the millions of dollars donated to BLM is the organization’s non-compliance with financial disclosure laws and its fleeing the jurisdiction of California, as Fox News reported a month ago:

A social justice nonprofit chaired by Black Lives Matter co-founder Patrisse Cullors is moving to operate in other states as it avoids filing required financial documents in California, filings show.

Cullors’ nonprofit, Dignity and Power Now, was warned by California’s attorney general’s office in March over its failure to file all the required financial documents for 2019. According to state records, Dignity and Power Now is currently delinquent in California, where it is incorporated.

“A delinquent organization may not engage in any activity for which registration is required, including solicitation or disbursing of charitable assets,” reads an earlier warning sent to Cullors’ nonprofit from California’s Registry of Charitable Trusts, which was first reported by the Daily Signal. 

But as the nonprofit remains in a delinquent state, records show that the organization has been active as it continues sidestepping its required financial forms. Just weeks after receiving its latest warning, Dignity and Power Now submitted an Application for Certificate of Authority on April 1 with North Carolina’s secretary of state’s office to conduct business in the state. Cullors is listed as an officer in the documents. (snip)

Dignity and Power Now, which formed in 2012, has failed to file an audited financial statement to accompany the group’s 2019 tax forms, which did not include the required signature of an officer.

Then there is the question of her co-founders and the other groups sporting the BLM name. In In December 2020, Politico headlined, “Black Lives Matter power grab sets off internal revolt.”

The Black Lives Matter movement is buckling under the strain of its own success, with tensions rising between local chapters and national leaders over the group’s goals, direction — and money. (snip)

After a summer of protests that made Black Lives Matter a household name, those atop the movement are making a series of moves to alter its power structure: organizing a political action committee, forming corporate partnerships, adding a third organizing arm and demanding an audience with President-elect Joe Biden. (snip)

Two of its three co-founders are no longer affiliated with the movement — even as they continue to represent Black Lives Matter on TV. Local Black Lives Matter activists say national leaders cut them off from funding and decision-making, leaving them broke and taking the movement in a direction with which they fundamentally disagree. And as the Black Lives Matter movement grows in influence, with millions in donations and celebrity endorsements, local organizers argue they’re the ones in the streets pushing for change — and they’re not getting their due.

The moves have triggered mutiny in the ranks. Ten local chapters are severing ties with the Black Lives Matter Global Network, as the national leadership is known. They are furious that Patrisse Cullors, its remaining co-founder, assumed the role of executive director of the group and made these decisions without their input. That’s a move, that, to some, signaled a rebuke of its “leaderful” structure, which gave every member an equal say and kept anyone — including a founder — from overreaching.

The operations of Black Lives Matter have always been opaque, with thousands of members and dozens of affiliates. Two of its three co-founders are no longer affiliated with the movement — even as they continue to represent Black Lives Matter on TV

(snip)

“There’s been intentional erasure,” of local activists, said Sheri Dickerson, lead organizer with Black Lives Matter Oklahoma City. “People assume that that money is distributed to local chapters. That is not the case. People also assume that when actions are made, that national [leadership] has the support and agreement from this collective that what they’re saying is representative of us. And that’s certainly not the case.”

There are a lot of people who want a closer look at the money that has flowed to BLM an d the rise of Patrisse Cullors’s net worth. She has a multi-year deal to produce content for Warner Brothers, one best-seller book and another book on the way, a consulting firm and  has worked as a public speaker. It may well be that she has earned every penny that she invested in real estate. But the failures to meet regulatory requirements for financial disclosure are a red flag that justifies close examination of the books. Maybe Cullors wants a certain distance from what may follow.

Tesla’s Model 3 has lost the coveted “Top Pick” status from Consumer Reports after the automaker decided to no longer equip Model 3 and Model Y vehicles with radar sensors.

Without the radar sensors, “vehicles may lack some key advanced safety features, including forward collision warning (FCW) and automatic emergency braking (AEB)”, according to Consumer Reports. This has caused these models to lose critical performance designations from testing organizations like the Insurance Institute for Highway Safety.

David Friedman, VP of advocacy for Consumer Reports and a former acting administrator of the National Highway Traffic Safety Administration, commented: “If a driver thinks their vehicle has a safety feature and it doesn’t, that fundamentally changes the safety profile of the vehicle. It might not be there when they think it would save their lives.”

Vehicles built on or after April 27, 2021 are no longer going to receive the NHTSA’s “check mark” for FCW and AEB. The agency rescinded the check marks “after Tesla briefed the agency on production changes due to the transition to Tesla Vision from radar.”

“Because of the change, Consumer Reports no longer lists the Model 3 as a Top Pick, and IIHS plans to remove the Model 3’s Top Safety Pick+ designation,” CR wrote.

Jake Fisher, senior director of CR’s Auto Test Center, said: “It is extremely rare for an automaker to remove safety features from a vehicle during a production run, even temporarily, but this isn’t the first time that Tesla has done this.”

He continued: “With over-the-air updates, Tesla can add and remove features on their vehicles over time. We update our scores when key features are added or removed.”

Recall, we noted days ago when Tesla said it was ditching radar in favor of cameras. The company said it is going to do away with radar in favor of using a “camera-focused Autopilot system” and that the change is going to apply to both Model 3 and Model Y vehicles in North America, starting this month.

The move comes as scrutiny of both “Autopilot” and “Full Self Driving” – two features that clearly don’t live up to their name the way they are labeled – has intensified. Additionally, as CNBC noted, “radar sensors are relatively expensive” and this could be yet another cost for Tesla to try and cut. 

“Pure vision Autopilot is now rolling out in North America,” Tesla CEO Elon Musk said on Twitter, referring to the change, earlier this week. Recall, Tesla had to quickly shelve its last Full Self Driving beta after numerous humiliating videos surfaced of the software having repeated issues and quickly went viral. The Full Self Driving beta v8.2 was thrashed by critics like Road and Track who called it “laughably bad” and “potentially dangerous”.

“If you think we’re anywhere near fully autonomous cars, this video might convince you otherwise,” Road and Track wrote about Tesla’s Full Self Driving feature. The article referred to the feature as “morally dubious, technologically limited, and potentially dangerous”. 

Tesla’s blog on its website said:

We are continuing the transition to Tesla Vision, our camera-based Autopilot system. Beginning with deliveries in May 2021, Model 3 and Model Y vehicles built for the North American market will no longer be equipped with radar. Instead, these will be the first Tesla vehicles to rely on camera vision and neural net processing to deliver Autopilot, Full-Self Driving and certain active safety features. Customers who ordered before May 2021 and are matched to a car with Tesla Vision will be notified of the change through their Tesla Accounts prior to delivery.

For a short period during this transition, cars with Tesla Vision may be delivered with some features temporarily limited or inactive, including:

• Autosteer will be limited to a maximum speed of 75 mph and a longer minimum following distance.
• Smart Summon (if equipped) and Emergency Lane Departure Avoidance may be disabled at delivery.

In the weeks ahead, we’ll start restoring these features via a series of over-the-air software updates. All other available Autopilot and Full Self-Driving features will be active at delivery, depending on order configuration.

We look forward to Musk lashing out at Consumer Reports, as he has been known to do, upon receiving critical reviews.

Authored by Bill Blain via MorningPorridge.com,

“For on one side lay Scylla and on the other divine Charybdis terribly sucked down the salt water of the sea.”

Nothing to worry about… except Pandemic, Bonds, Inflation or Deflation, Record Container Prices and Geopolitics? Is there any chance of compromise and a deal on the US infrastructure package everyone agrees is necessary – or will it sink into the partisan swamp? And Cathie Wood talks up her investment strategies – but what’s the substance behind the leading Zeitgeist Investor?

It’s been a “digestive” kind of week in market… Among other things figuring out the how, if and when of possible new coronavirus threats, and if mutations and panics could trigger new lockdowns. As we watched the sun go down from the yacht club veranda while yesterday’s glorious summer came to its end, we were calculating the odds of whether the lad’s ski-trip in Feb 2022 will actually happen!  Hope so.

But there is plenty else to ponder.

The fact container prices from Asia to Europe topped $10k for the first time ever – is that a sign of resurgent, sustained long-term demand, or is the repressed post-pandemic spending going to prove temporary?

There are an increasing number of analysts bought into the theory the current inflationary blip will be temporary as repressed spending is balanced by stretched savings, unsustainable leverage, and job fears as the real scale of the pandemic damage to SME balance sheets becomes apparent. Despite the loans, furloughs, and bailouts – many companies are struggling. The apparent rosy spending orgy may not last long.

We are still balanced betwixt Inflation and Deflation..

And then there is the bond market. If we are headed for inflation and a taper then just how much pain will a screaming bond market (screaming in agony as rates crush prices), inflict on other financial asset market? Clue: lots. Lots! And if bond markets collapse – then you can bet the right-wing monetarists hidden among us will be heaping the blame on the god-damn communists in Washington, Downing Street and Frankfurt for debasing currencies through reckless fiscal carpet bombing.

Or how about widening geopolitical fault-lines. Earlier this week I was pondering on whether the rumoured accidental release of Covid from a Wuhan lab might trigger China push-back. Biden has now instructed the CIA to report on the matter. The Chinese are screaming its already a “dodgy-dossier” – if you don’t know the reference, it’s the reason you should count your fingers afterwards if you ever meet Tony Blair. Meanwhile, Beijing has solved problematic Hong Kong elections by declaring the winners ahead of any vote.

The other side of the China vs US face-off is the realisation both are essentially market driven economies… they just do it differently. I suspect many smart fund heads are wondering how to play it neutral, hedging downside risks in one bloc against the upside of the other, all without offending the plethora of ESG, CSR, Sustainability and Social Justice mandates that now dominate investment decisions in the West….

Meanwhile… back on the Range..

Is the US crawling towards a possible-partisan agreement on infrastructure spending? If it is, then the prospects for the US dramatically improve – with knock on effects around the global economy. The Republicans have countered Biden’s $1.7 bln plans with a $982 bln counter-package. To say there remain “vast differences between the White House and Republicans” would be an understatement – but anything that looks less polarized is positive.

Over the past couple of days I’ve been having a fascinating email debate with a great mate of mine. He’s a very successful alternative asset manager.  He’s also a Republican – which doesn’t necessarily make him a bad person. Although Trump dominates the party, not every Republican is a Trump aficionado – they just can’t say it.

At least they are having the debate on just how much to spend on recovery, and the fiscal consequences that may emerge. Its not a debate being heard in Europe or the UK to any real extent. (Ok, the Germans are getting a tad concerned about German tax-payers funding Italian pensions and creating massive inflation in Draghi’s spending plan’s wake – but, fear-not! Germans are good Europeans.. for now..)

Broadly the US argument revolves around the number of US firms abandoning Democrat states like California in favour of low tax states like Texas that remain corporate friendly. It’s a fact Democrat run states tend to have higher unemployment and higher taxes. According to my mate that’s prima facie evidence the Democrats can’t be trusted to run the US economy, and are proven incompetents. That’s pretty mild polarisation compared to what passes for political debate in the US these days.

Many states are struggling to balances taxes, spending and growth. Central government vs regional spending is a fault line in most modern economies. When it comes to the US, it’s a factor driven by the evolution of US economy – the big cities evolving from manufacturing into services, and more recent factors driving greater inequality and raising the need for more expensive social services.

For instance, I reckon the social problems in San Francisco have been accelerated by the costs of housing being driven up by the tech industry. Distorted ultra-low interest rates have fuelled tech valuations, allowing over-valued start-ups to pay massive salaries, driving up the cost of SF accommodation to insane levels, pushing out the bulk of service workers in low paid service sectors. Just saying – monetary distortions have consequences… not just on markets.

Balance these states against the “frontier capitalism” of Texas et al. They compete for jobs on the basis of low taxes and business friendly corporate laws. It clearly works for them. Entrepreneurs can put their businesses up for a bid to see which states are prepared to host them for the least. Everyone from Tesla, Apple, HP and Planatir has moved business units on to the Texican scrub. It sort of makes sense – a firm that makes a $1000 distributal profit will end paying nearly $700 in Federal and State corporate, dividend and capital gains taxes in California. (Most of it is Federal.)

Most Europeans scratch their heads understanding why US states compete against each other like that. Surely the country would be stronger if they worked together? Don’t even go there… competition and states rights.. etc..

I hazarded the view that’s it’s the success of the US that’s the reason for the increasing negative social issues in America’s large cities. I am not advocating communism – just that the USA solves the issues created by success. Spread the love. Inequality and lack of opportunity ultimately sucks for everyone.

And…. Step up to the block; Cathie Wood

Even as Central Bankers around the globe put the boot into Crypto we’ve got Cathie Wood of ARKK on the wires reassuring investors Bitcoin is here to stay. She still reckons Bitcoin is good for the environment because it will focus miners to get their power from green sources. I must be missing something there, because if miners use the green energy everyone else wants, that will push up its price meaning more green energy will be produced – perhaps, but until it is, let’s just burn another mountain of extra coal?

This morning on Bloomberg Businessweek there is a must-read piece on Cathie: Cathie Wood’s Bad Spring is Only a Blip When the Future is So Magnificent.

It’s a great read – and you know what. I agree with her. The world is changing. New Tech is going to make it much, much, much better. I buy into 3D, Space, Gene therapy, and the rest, just not digital currencies.

The thing is. They are going to happen. But not at the pace or in the fashion Wood expects. The history of business is constant evolution driven by the forces of the market and money. Everyone loves innovation, but the firms that have great ideas don’t necessarily succeed. Ford was not a first mover, but found how to make profits and sell more cars. The Wright Brothers were first movers, but became a minor engine maker. The Brits pioneered the Jet Airliner and never made a cent from it. The trick is not just finding innovators, but finding the winning innovator! That is really hard work.

What Wood has successfully done is become the figure head of the Age of Zeitgeist Investment – making lots of money the easy way. Her crew (described in the article) and herself see the future as disruptive and innovative and it’s all terribly exciting.

The reality is very different. Understanding ultimate winners and losers is hard. It’s not about getting excited. Growth and neat solutions to as yet undiscovered or comparatively minor problems are just part of the equation alongside money and profits. The Tech industry is no different from anything else – trends matter, but it’s about what companies are going to succeed and pay decent returns….

That’s not what Cathie Wood’s multi-billion dollar ETF’s do – she sells a dream of tech riches, not the hard work in making them…

Here endeth today’s rant.

HP Inc shares slumped more than 5% in premarket trading Friday, despite the computer-maker beating Wall Street estimates on its top and bottom lines in its second quarter. The continuing chip shortage is likely to pressure computer sales this year and may have already resulted in peak sales. 

HP reported earnings of 93 cents per share on revenue of $15.88 billion, beating the Street’s top estimates by 4 cents per share and revenue expectations of $15.02 billion, according to Refinitiv data. The company has experienced huge growth in computer sales by people working-at-home to schools to businesses during the virus pandemic. 

A chip shortage is likely to drag on the company’s performance which means HP will lack the ability to match supply to meet the demand for its products, Chief Executive Officer Enrique Lores told investors Thursday. The shortage will persist through the second half of the year as lead times for chips have reached the “danger zone.” 

Following HP’s earnings, Citi analysts said, “Short-term investors will notice that HP did not get the full sales upside to flow through the EPS,” which “will likely raise a new question for investors of: ‘is this the peak?'” Citi maintained its “buy” rating with a $40-handle upside target. 

Analysts at Well Fargo Securities maintained an “equal weight” on HP with a price target of $30. The bank’s analysts said, while the results remain robust and the outlook is strong, “investors will be focused on the co’s implied 2HF2021 / F4Q21 EPS decline as an indication of peaking fundamentals vs. conservatism amidst supply chain constraints.” 

Morgan Stanley analysts said the stock should be bought on weakness due to sustained PC demand and an aggressive stock buyback program. It has an “overweight” rating on HP with a $40-handle price target. 

Bloomberg Intelligence said there’s pent-up demand for HP products but warned about supply constraints (semiconductor shortage) that may dent HP’s sales. 

What’s evident is that HP may fall victim to the chip shortage and result in lower demand that may ruin the pandemic streak of increasing sales thanks to work-at-home. 

Dell Technologies Inc. also echoed the concern about chip shortages, predicting component supply constraints will continue into 2022. Chip-maker Intel, who supplies chips to Dell, said the shortage could continue for a “couple of years.”  

PC sales might have peaked overall thanks to the chip shortage. 

Despite the announcement of a $6 trillion budget by the Biden admin, crypto markets resumed their carnage overnight with various catalysts cited as a driver though none particularly new or convincing.

Bitcoin tested $40,000 for the 4th time in the last 4 days… and failed again, tumbling to $35,000 this morning before a small BTFD bid appeared…

Source: Bloomberg

“Volatility has eased this week, but that probably won’t last entering a long weekend,” Edward Moya, senior market analyst at Oanda Corp., wrote in a note.

“Bitcoin’s consolidation phase should continue, but if the $37,000 level breached momentum, it could get ugly fast.”

Ethereum is also getting spanked, failing to hold above $2800 and falling back to $2400 this morning before it also saw a bid…

Source: Bloomberg

Save for a few anomalies, Decrypt notes that all of the top 100 coins by market cap are down by around 10% in the past 24 hours. Data from CoinMarketCap shows that the decline started at 5 am UTC and steepened at 10 am.

The fourth-largest cryptocurrency, Binance Coin, is down 11% since yesterday, now trading for $329. Its price has plummeted almost 15% over the past week.

Cardano is down by 11.36%, even though the blockchain just launched the testnet for its long-awaited smart contract platform, which will eventually turn the network into a direct competitor to Ethereum.

XRP fell 12% in price and became the seventh-largest cryptocurrency by market cap; the coin was supplanted by Dogecoin, now the sixth-largest with a market cap of $41 billion.

“Looking at the unrest across the crypto market, there is a chance that we see another hectic weekend trading in Bitcoin and other cryptocurrencies,” said Ipek Ozkardeskaya, a senior analyst at Swissquote.

Some have suggested this is ‘Reddit’ traders rotating from crypto back to the meme stocks, though that seems a stretch since the moves have not been correlated (until today’s surge in AMC etc relative to Bitcoin’s battering).

Some have suggested that Bank of Japan’s Kuroda sparked some selling overnight after citing its volatility, he dismissed Bitcoin as “barely used as a means of settlement.”

…adding that the vast majority of Bitcoin trading is “speculative and volatility is extraordinarily high.”

Clarification from Korean regulators on their roles in cracking down on crypto also spooked some overnight:

“No one can guarantee its value, and there is a risk of massive losses due to the volatile exchange environment at home and abroad.”

Additionally, headlines that Burger Swap, the Binance Smart Chain-based decentralized exchange, was hacked for $7.2 million did not help.

Others have pointed out Bitcoin’s inability to reclaim its 200DMA as a driver of more weakness here…

Source: Bloomberg

On the bright side, CoinTelegraph reports that Ark Investment CEO Cathie Wood attempted to calm down fears regarding stricter scrutiny over Bitcoin entities.

Speaking at the Consensus 2021 conference earlier this week, the celebrated tech investor said it is impossible to shut down cryptocurrencies, reiterating her views that regulators would eventually need to wrap their minds around blockchain assets.

“I think the competitive dynamic in the rest of the world is helping us in the United States. I think it’s been good,” Wood said in an interview last week.

On declining institutional investments in the cryptocurrency space, Wood noted that investors had paused their capital flow into Bitcoin and other rival assets over their questionable environmental profile. Elon Musk raised the same issue when his benchmark undertaking Tesla decided to stop taking Bitcoin payments for its electric vehicles.

However, the billionaire entrepreneur later backed an alliance of North American crypto miners to track and reduce crypto-related carbon emissions.

“Half of the solution is: understanding the problem,” Wood said during her Consensus conference address.

“This auditing of what miners, certainly in North America, are willing to do around how much of their electricity usage is generated by renewables is going to bring that topic into stark relief and will encourage an acceleration in the adoption of renewables beyond which otherwise would have taken the place.”

She added that institutional buying in the Bitcoin market would resume on the cryptocurrency’s improving green profile.