Long Crypto's Banks

This could be the single most important chart in the world right now.

We cannot overstate this development.

We finally got a major resolution in the US 10-year yield, which has reclaimed that critical 1.40% level this week. This begs the question as to what a rising rate environment might mean for investor portfolios. The important implication for stock investors is the renewed tailwind for cyclicals. When rates are rising, sectors like financials, industrials, materials, and energy are all typically outperforming, which is exactly what we’ve started to see in the last week.

And of all these groups, the most direct beneficiary is the regional banks, which are back above their 2018 highs. An overwhelming proportion of their bottom line is tied to lending, so higher yields and widening spreads are a significant tailwind.

We've been covering this in incredible detail over the last week, so these developments shouldn't come as any surprise.

But you're probably wondering, what does any of this have to do with crypto?

The answer is, everything...

Bitcoin's a risk asset too. An environment where risk is being rewarded is an encouraging backdrop for these highly volatile assets.

Additionally, for those looking to gain exposure to crypto via traditional equities, there's a crypto-friendly institution that's been on our radar that has a renewed tailwind at its back.

The crypto-friendly Signature Bank just resolved to all-time highs yesterday:

Signature Bank is one of the predominant institutions that facilitate transactions from fiat into the various crypto exchanges. Whenever people deposit money into an exchange associated with Signature Bank, they collect a notable fee on that transaction.

Perhaps that's why they've done so well compared to their competitors, as you can see by that impressive strength relative to the rest of the regional banks...

And here's a zoomed-out look:

We want to be long SBNY above 260, with a target of 316.

Crypto members can download this week's chartbook below: