by | Jul 14, 2022 | Newsletters

The crypto winter continues. Over the past month, Bitcoin and all major altcoins went down again. Bitcoin lost 39.5%, while Ethereum and Solana lost 47.6% and 29.6% respectively over the past 30 days. The generalized bear sentiment kept the broad stock market lower again, with the S&P 500 losing 9.16% over the month of June.

The threat of more Russian sanctions for its war in Ukraine has continued to fuel a spike in energy prices. However, crude oil prices fell initially at the beginning of the month as it became clear sanctions would not affect the Russian crude supply. 

Source: TradingView

On June 22, crude oil price for the WTI futures contract began to rally as rumors spread that Russia may restrict crude oil supply as a form of retaliation for western sanctions. WTI futures were at one point down 12.1% for the month but managed to rally since that recent low and closed the month down 9.5%.

Crypto Winter

The crypto universe has seen some dire news over the past month that has further dented the confidence in this asset’s performance. Hedge fund 3 Arrows Capital had to file for chapter 15 bankruptcy in a New York court. 

The hedge fund had total assets under management at the beginning of the year of $10 billion. When the bear market set in so too did complications for the fund, and they found themselves unable to make owed payments.

That’s not the only bad news for crypto from June. CeFi services provider Voyager Digital said they could lose up to $650 million from the 3 Arrows Capital collapse. Another CeFi platform BlockFi expects to lose 80 million due to the hedge fund’s demise.

Despite the various bouts of bad news for the world of crypto assets, some top-tier financial institutions came out with a positive analysis of the current bear market in crypto. JP Morgan issued a statement revealing Bitcoin as its preferred alternative asset back in May. 

And more recently, Deutsche Bank analysts see Bitcoin possibly reaching $28,000 by year-end. Their main argument for Bitcoin’s future rally is its correlation to the S&P 500. The analysts see the broader stock market regaining losses and reaching levels from January by year-end.

They assume that due to the high correlation between Bitcoin and stocks the cryptocurrency could also follow the stock index to higher levels by the end of the year. The current risk-off mood which is driven by higher inflation and recession risk may be seen as diminished once the Federal Reserve has implemented its tightening policies.

Gold Stability

Gold has drifted sideways and slightly lower during the month of June, and managed to contain losses, closing down 1% for the month. Most of the price action through the month fluctuated between $1,807 and $1,871, which is a fairly tight price range for one month. Compared to other assets, gold has had a more stable performance while holding its price above $1,800 per ounce.

Real Estate

Real estate funds had a tough month in June, as the sector closely tracks the broader stock market. However, this asset class bottomed out between the 14th and 22nd of the month and managed to recover some losses.

The Vanguard Real Estate ETF, which is the largest US real estate ETF with $38 billion in AUM, managed to close the month down 6.25% after losing at one point 11.2%. The real estate sector continues to see challenging conditions as the Federal Reserve’s tightening cycle will send mortgage expenses higher, cooling down the housing market.

Looking Ahead to July

There is still a large amount of uncertainty as to how badly interest rate hikes will affect the economy. Not to mention how they will impact the performance of cryptocurrency, gold, and other alternative investments. 

The alternative asset space may still have room to the downside, but many investors are thinking of adding these assets to their portfolios due to their lower prices. You can take advantage of these steep asset discounts. To get started, check out our reviews on the top self-directed IRAs here.

Gino D'Alessio

Gino D'Alessio is a Broker/Dealer with over twenty years experience in various OTC markets such as Bonds, FX and Derivatives. Currently a Financial Markets and Investments Writer & Analyst