AI Glory
Crypto Market Week in Review (28 April 2023)
Markets
This week the markets were mixed, with no large moves in both stock indexes or bonds. Bond yields slightly declined on renewed worries about US regional banks, as First Republic Bank’s stock plunged over 60% this week. The strong quarterly reports of Microsoft and Meta supported stocks. The Microsoft report was particularly important for the stock market because Microsoft has a very large 6% weight in the S&P 500.
For comparison, Microsoft's market cap is about 2 times larger than all crypto combined. Microsoft surged by 7% on Wednesday thanks to the better-than-expected earnings and the forecast of growing strength in its artificial intelligence (AI) and cloud businesses. “The world's most advanced AI models are coming together with the world's most universal user interface - natural language - to create a new era of computing,” said Microsoft CEO. Microsoft stock has reached the highest level since April 2022 and is now just 11% below the all-time high.
Microsoft stock price (USD)
Bitcoin erased the previous week's decline, advancing about 7%, but Ethereum and major altcoins underperformed Bitcoin. Crypto suddenly plunged without an obvious reason on Wednesday, with Bitcoin losing about 7% in an hour, but mostly recovered the next day.
The implied volatility remained subdued despite the big spot move on Wednesday. The Bitcoin DVOL index remained flat since the last Friday, and the Ethereum DVOL index dipped to almost an all-time low. The implied volatility of Ethereum became lower than Bitcoin’s one (as measured by the DVOL indexes), which is a rare situation.
Ethereum DVOL index
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