May is the month of sales. The dollar attracts capital

Falls on stock exchanges, reductions in the prices of precious metals, a crash on the cryptocurrency market - from the beginning of the month it is difficult to indicate financial assets that would be gaining in value. The US dollar seems to be an exception. 

A stock market saying "Sell in May and go away" may sound prophetic in 2022. For 10 days of May this year. german Dax index has already dropped by approx. 4%, the American Nasdaq xnumx lost 3,7 percent, S & P 500 decreased by 2,5%, and DJIA by 1,5 percent Moreover, silver went down 4,5% and gold 2,5%.

At the same time, the US dollar gained 0,64% and the market is seeing a return of capital to cash. This appears to be happening in the potential cash phase of the business cycle, which typically occurs before the bond phase, once bonds have peaked in their yields. This, in turn, may be related to the expectations for interest rate hikes in the US and the inflation peak.

A blow that could knock the cryptocurrency market down

The beginning of May also brings a crash on cryptocurrency market: Bitcoin was around $ 29 tonight USD, which was the lowest value since May 2021. It can therefore be said that history repeated itself in May 2022, and its background seems interesting. Talking about a fracture stablecoin UST, i.e. a payment token, the value of which was to be permanently associated with USD quotations). It was trading below $ 0,7 at one point. This, in turn, may have forced the release of bitcoin reserves, which were a hedge against the UST to USD exchange rate of 1: 1 and a massive supply of BTC tonight.

Once again, the financial market, this time in the issue of cryptocurrencies, served an event that we had never dealt with before, and on a scale that had not been observed before. It remains an open question whether cryptocurrencies can recover after this, as one of the stablecoin foundations has been undermined.