Insights: While old Wall Street wins a crypto battle, it will lose the war

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August 15th, 2021

Has silver seen the ghost of deflation? One might assume so given its price action last week. We started last week by highlighting Vizsla Silver (VZLA), noting that the stock had been consolidating despite a struggling silver price. Both Vizsla and silver rallied on Friday on the back of falling consumer sentiment as investors started to reassess the Fed's tapering schedule. While we remain skeptical that the Fed will be able to successfully tighten financial conditions, fleeing precious metals investors thought otherwise, at least until Friday.

Silver has fallen so far this quarter while Litecoin is rallying

Cryptocurrency investors seem to have a lot more conviction that the Fed is on the ropes. The forces of old Wall Street threw everything they had at cryptocurrencies last week, including a covert action by the US Treasury to essentially shut down decentralized finance (DeFi) via proposed tax changes. While the vested interests on Wall Street actually won the battle last week thanks to an 87-year-old Republican Senator who blocked a key amendment, crypto investors are betting that old Wall Street will lose the war.

At INK, we are siding with the crypto investors and betting that Litecoin will hold its value better than the Canadian dollar and other fiat currencies. To that end, we are offering significant discounts on annual INK Research and Canadian Insider memberships if paid in Litecoin. Contact us directly and confidentially via direct message in INK Chat for more details if you are interested in saving on your renewal.

On Tuesday, we covered Hut 8 Mining (HUT) in our morning report. Hut 8 seems poised to benefit from bitcoin strength and structural changes in the industry. We also posted the video preview of the Hut 8 report to INK Ultra Money Free which is our video of the week.

There is a divergence between precious metals and cryptocurrencies with respect to what they are signalling about the consequences of the Fed's expected policy path. Precious metals are acting as if a significant Fed tightening is on the way, while cryptos are behaving like they are on a path to the remake of the financial system as inflation roars. What could be driving these conflicting signals? One reason may be the relative dearth of institutional participation in the crypto world. Old Wall Street has been active in the precious metals markets for decades, and they know how to work that market to their advantage.

While retail precious metals investors may well be buying the dips, they can easily be overwhelmed by institutional players who can use futures markets to push their bearish precious metals narrative. In contrast, crypto is off-limits to many old Wall Street players which do not have a handle on the space or are handcuffed by their compliance departments from taking market-moving short positions in crypto assets. We discussed the recent plunge in precious metals and the crypto comeback in our August 10th Howe Street radio interview.

Roberts: this is not another 2018 for crypto

Finally, we are mindful of some headwinds this fall for cryptocurrencies. As explained by Daniel Roberts, editor-in-chief at Decrypt, explained on August 12th, old Wall Street and their allies will be taking another run at cryptos this fall on the regulatory front. The drama may well provide another shorting opportunity for crypto skeptics and a buying opportunity for the bulls. Meanwhile, two gold miners were near the top of the INK Edge movers list for the past week. See our report in the #stock_ideas channel for those details.


Top 3 Gainers Last Week

Company NameStock Symbol1 Week Return %
Stelco HoldingsSTLC19.0
Doman Building MaterialsDBM16.7
AutoCanadaACQ10.7

Top 3 Losers Last Week

Company NameStock Symbol1 Week Return %
Sierra MetalsSMT-18.8
Frontera EnergyFEC-10.4
Solaris ResourcesSLS-6.0

Returns are as of the last trading day of the previous week.

Featured Clip

Insider of the Week

Stephen Ehrlich (right)

Stephen Ehrlich, CEO and co-founder of Voyager Digital (VYGR), sits down with Real Vision CEO and co-founder Raoul Pal to discuss the state of play for NFTs, community tokens, and regulation. In addition, viewers get a sneak peek into the Voyager token and why Erhlich thinks the tokenization business model is just getting started.

INK Canadian Insider Index

1 Year Total Return Performance


Historical Performance

Annualized Total Return as of August 13, 2021 04:49 pm
1 Year 54.64%
3 Years 11.24%
5 Years 9.92%
10 Years 10.07%


To learn more about the Index please visit
https://index.inkresearch.com

5 Year Total Return Performance


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