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(Bloomberg) — Cryptocurrency exchanges and other financial services companies were stars amid a Super Bowl ad blitz that featured the return of many longtime sponsors and an overall more upbeat mood than last year.

The Los Angeles Rams emerged victorious, 23 to 20, over the Cincinnati Bengals in a surprisingly close match that saw the hometown team score a come-from-behind touchdown with less than two minutes left in the game. NBC, which broadcast the game, said it sold more than 70 spots, with some costing as much as $7 million for 30 seconds. YouTube said viewing of Super Bowl ads on TV screens during game day rose more than 35% from last year. 

This was the first Super Bowl to feature crypto ads. Coinbase Global Inc., an exchange for the currencies, generated early online buzz with an ad featuring a QR Code that viewers had to scan to find out what the spot was about. Those who did were invited to “Sign up and get $15.” 

FTX Trading Ltd., another exchange, ran an ad with comedian Larry David portraying skeptical figures during great moments in history. After scoffing at the invention of the light bulb and man landing on the moon, David suggests crypto will never amount to anything. “And I’m never wrong about this stuff,” he says.  

Crypto.com’s spot featured basketball great LeBron James looking at his past and offering advice for the future. Rocket Mortgage won USA Today’s poll for best ad for its spot featuring Barbie buying her dream house.

Online broker E*Trade Financial, meanwhile, brought back its popular E*Trade baby character after an eight-year hiatus. In the spot the baby is reluctant to return to work but is convinced to do so when he hears that investors are getting financial tips from memes.

“It’s certainly a new world when it comes to investing, amid NFTs, crypto currencies, meme stocks, and the rise of the retail investor,” said Andrea Zaretsky, chief marketing officer at the wealth management division of Morgan Stanley, which now owns E*Trade. “But the reality is that the principles around sound personal investing remain as true today as they were a decade ago.”

Nissan Motor Co. returned to the Super Bowl after a seven-year break with a comedic action-movie spoof starring Eugene Levy, while the cast of “Austin Powers” reunited in a 90-second ad for General Motors Co. The commercials are part of a broader return by carmakers after many skipped last year’s game. Several highlighted their electric vehicle lineups, including a Chevy spot inspired by “The Sopranos” that was trending on Twitter throughout the game.

Irish Spring debuted its first-ever Super Bowl ad featuring 70s-horror-movie influences, including a possessed white bunny that Twitter users called unsettling and offbeat, but most importantly, memorable. Jim Carrey revived his 1996 “The Cable Guy” character in Verizon Communications Inc.’s 60-second Super Bowl commercial, promoting “ultra-fast” 5G home internet.

“The big game is the biggest snacking day of the year and the largest stage when it comes to brand exposure and reaching our fans,” said Gareth Maguire, marketing director for Pringles, whose spot featured a man learning to live with his hand trapped in a Pringles can. It was set to Lionel Richie’s “Stuck On You.” 

Here are some things that caught our attention during the game:

Hellmann’s Mayo Ad Features Linebacker, Davidson

A Hellmann’s mayonnaise ad features linebacker Jerod Mayo tackling a guy, an injured woman on crutches, a grandma, and almost Pete Davidson’s mom, until the SNL comedian says, “Whoa, mom’s already tackled food waste Mayo.” Mayo tackles Davidson instead,  who replies, “I get it, I’m very hittable.” 

Eugene Levy Spoofs Action Films for Nissan

Nissan Motor Co. returned to Super Bowl advertising after a seven-year hiatus with a spot featuring “Schitt’s Creek” creator Eugene Levy and co-star Catherine O’Hara, as well as Marvel Avengers’ Brie Larson, in a comedic action-movie spoof. The ad is part of a broader return by carmakers to the Super Bowl this year after many skipped last year’s game. The YouTube link to the spot has been viewed 30 million times already.

Kia’s Robo Dog Is a Crowd-Pleaser, Just as Expected

Amazon Prime Video’s “Lord of the Rings” Spot Drops

Amazon Prime Video’s hotly anticipated trailer for its new spin-off series, “Lord of the Rings: The Rings of Power” didn’t disappoint. The ad stirred immediate social-media buzz amid fans of the J.R.R. Tolkien franchise.

It’s one of the most-expensive series of all time. Prime Video’s Chief Marketing Officer Ukonwa Ojo called it the streaming service’s “biggest and most ambitious launch this year” in a statement to Bloomberg. Sunday’s 60-second Super Bowl trailer gave glimpses of new worlds, elves and orcs, against sweeping landscapes and inspirational music and quotes.

Cue Health Spot Features Wonder Woman, Alexa

Cue Health introduces its home test lab voiced by “Wonder Woman” Gal Gadot with cameos by Alexa, Roomba, Nest. The Covid testmaker went public in September at a $2.3 billion valuation.

Crypto.com Is Third Crypto Sponsor, LeBron James Stars

Singapore-based Crypto.com, a cryptocurrency exchange, aired its first-ever Super Bowl ad this year immediately following the halftime show. The ad featured a present-day LeBron James telling his younger 2003 self about the future. “If you want to make history, you gotta call your own shots,” he says.

Halftime Show Salutes Rap With Dr. Dre, Snoop Dogg

The halftime show, sponsored by Pepsi, delivered what it was expected be: a string of hits. Dr. Dre and Snoop Dogg opened, performing “California Love” and other hits in trailers that looked like cabanas. There were classic cars and a field full of dancers that were the subject of controversy when several posted that they weren’t getting paid. Kendrick Lamar, Mary J. Blige and 50 Cent also performed, including 50’s “In Da Club.” Eminem did “Lose Yourself.” He’s been promoting his restaurant selling Mom’s Spaghetti in Detroit, opened a pop-up in Los Angeles for Super Bowl weekend, and is doing a promo on Postmates.

Larry David Kills It in Spot for FTX Crypto Exchange

“Seinfeld” and “Curb Your Enthusiasm” star Larry David turned in one of the funniest performances so far. It’s a walk through history with David playing historical doubters in an ad for FTX Trading Ltd., a Bahamas-based cryptocurrency exchange. After portraying several skeptical figures during great moments in history, David suggests crypto will never amount anything. “I’m never wrong about this stuff,” he says.

Crypto Makes Its Super Bowl Debut With Coinbase Spot

Cryptocurrency company Coinbase may have scored with an interactive ad featuring a QR Code viewers had to scan to find out what the ad was for. Once at its website, Coinbase encouraged viewers to “Sign up and get $15” or “Opt in to win $3M.” Coinbase is now trending.

Mattel’s Barbie, Anna Kendrick for Rocket Mortgage

Mortgage loan provider Rocket Mortgage returned to the Super Bowl with an ad featuring Anna Kendrick and Mattel Inc.’s Barbie as the Barbie Dreamhouse turns 60 this year. The ad shows Barbie turning her dream house into a reality with a verified loan approval. 

Meta Tackles the Metaverse With Singing Dog

Meta Platforms Inc., the parent company of Facebook, took viewers on a trip through the metaverse, while also trying to repair its image after a big stock-market tumble this month. Its ad featured an animatronic singing dog, abandoned and later reunited with friends in the metaverse.

The spot promises a future with the company’s Quest 2 virtual-reality headsets. Meta joins other companies marketing new technologies this year and marks Meta’s efforts to showcase its ability to create social, immersive experiences. Post-game, the company hosted its first concert headliners, the Foo Fighters, in its Horizon metaverse.

Netflix, Disney+ Among Streaming Services Advertising

Netflix put out a super-sized pitch for its upcoming movies heading into this year including “The Adam Project,” starring Ryan Reynolds; Kevin Hart and Mark Wahlberg in “Me Time;” Millie Bobby Brown and Henry Cavill in “Enola Holmes 2;” Daniel Craig in “Knives Out 2;” Ryan Gosling in “The Gray Man;” and Jonah Hill and Eddie Murphy in “You People.” 

Disney+ pitched its new “Moon Knight” series with Oscar Isaac. Comcast’s Peacock has been popping up regularly during the game.

DraftKings Pitches Sports Betting in Spot With Joe Namath

DraftKings pitched sports betting and $1 million prizes in a spot featuring its leather-clad goddess of fortune and football legend (and former Ram) Joe Namath. A warning about where to seek help for problem gambling ran at the bottom of the ad.

Mexican Avocado Ad Debuts as U.S. Halts Imports 

Conan O’Brien’s sidekick, comedian Andy Richter, starred as an anxious Caesar at an ancient Rome tailgate party for Avocados From Mexico. It’s unfortunate timing, however, because the U.S. just put a ban on Mexican avocados.

E*Trade Baby Ad Returns, Pokes Fun at Meme Stocks

The E*Trade baby ad returned after a multiyear hiatus. In the spot, the baby is initially reluctant when called on to help investors deal with inflation. But when told investors are taking advice from memes, he’s ready to return. It’s a new E*Trade the ad notes, now part of Morgan Stanley. 

Schwarzenegger and Hayek Sell Electric BMWs

Meanwhile, Arnold Schwarzenegger and Salma Hayek play Zeus and Hera who charge up boring retirement with a BMW EV.

The Rock Does an Intro, ‘Jurassic World’ Is First Ad

Dwayne “The Rock” Johnson did the team intros. The first two ads were media related. One for the new “Jurassic World” film, coming out in June. Comcast owns Super Bowl host network NBC as well as Universal Pictures. YouTube TV also had a spot.

Pregame Show Underway in Balmy, 80-Degree Inglewood

It’s 80 degrees in the Los Angeles suburb of Inglewood with the game less that 10 minutes away. Social media reactions to watch for include Willie Nelson’s Skechers “Legalize” ad, which subtly calls out the hypocrisy of the ban on cannabis ads. Weedmaps is protesting digitally. NBC, meanwhile, is using the pregame show to promote a lot of its shows, including on its Peacock streaming service. 

David McCormick, the former CEO of Bridgewater Associates and a candidate for Senate in Pennsylvania, is running a “Let’s go Brandon” ad criticizing Joe Biden during the game in local markets, according to Fox News and Axios. 

The family of John Madden came out for a short tribute to the coach and broadcaster who died late last year. Rams tackle Andrew Whitworth won the NFL’s Man of the Year. Country star Mickey Guyton sang the national anthem.

• For Serena Williams, Tonal Super Bowl Spot Is More Than an Ad
• Super Bowl Ads Say It’s Time to Party After Rough 2021
• Betting Apps Want You to Come for Super Bowl and Gamble Forever

(Updates with USA Today poll result in fifth paragraph.)

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(Bloomberg) — It’s difficult to imagine, but it’s true: If video games had never been invented, we might have never known the joy of pulling back the string of a bow, slowing down time and shooting an arrow right into the glowing skull of a robot dinosaur.

Sony Group Corp.’s stunning game, Horizon Zero Dawn, introduced this concept in 2017, and it’s just as satisfying in the sequel, Horizon Forbidden West, which comes out Friday for PlayStation consoles. After playing for nearly 20 hours, I feel comfortable saying that the game is fantastic. It builds on everything that worked so well in the first game, adding new battle techniques and methods of traversal. Some players may be disappointed at how similar Horizon Forbidden West feels to its predecessor, but I wasn’t one of them. It’s hard to get sick of shooting those dinos.

Horizon Forbidden West is set in a post-apocalyptic version of the U.S. where hulking machines based on prehistoric reptiles stalk the land and humans live in primitive, tribal societies. In the first game, which was set around Colorado, we learned that a 21st-century tech mogul was responsible for the grim state of affairs. This new game expands that story into Nevada and California, where we find out more about the past, meeting an unexpected new faction that has emerged with malicious goals. Playing as a hunter named Aloy with red hair and a knack for trouble — voiced by Ashly Burch — you have to figure out what’s going on, save the world and so on.

Sony said last week that Horizon Zero Dawn has sold more than 20 million copies, raising the stakes for this sequel. 

The new Horizon offers a ton of new features: a grappling hook, a hang glider and a diving mask that lets you explore underwater without holding your breath. There are new types of robot dinosaurs, new weapons and even an addictive new board game that you can play in villages across the game’s massive world. In a move inspired by the popular Mass Effect series, you even wind up getting your own base and recruiting characters who will chat with you (there is so much chatting!) about your progress in the story and how everybody feels about what’s been going on.

Read more about Sony’s plans for another Horizon installment in virtual reality

The mantra for Horizon Forbidden West’s development appears to be: make everything bigger, better and more beautiful. Close-up shots of characters showcase expressions and mannerisms with a subtlety that wasn’t present in the first game. There are more ways to hunt and trap the machines than before, whether you’re throwing a javelin with a delayed explosion or using a gauntlet to shoot shredding discs to tear off pieces of a robot Stegosaurus’s exoskeleton. The human opponents are far less fun to fight, but it can still be satisfying to sneak around one of the game’s many Rebel Outposts as you fight the Tenakth, a military-driven tribe that plays an important antagonistic role.

Although the game looks gorgeous, it also has quite a few bugs. Over the course of play I ran into several technical glitches ranging from a whole system crash to a more minor inconvenience, when the camera was somewhere it shouldn’t have been. A day-one patch may fix some of these issues, and given the ambition on display here, they weren’t too bad — as jarring as it was when I started a conversation with one guy during the night and suddenly it turned into daytime.

Bugs aside, Horizon Forbidden West is an incredible achievement. There are moments of sheer awe and joy, like when you use the grappling hook to fling yourself into the air, then slow down time so you can unleash a volley of arrows into an enemy on the way down. If you played the first game and want more Aloy adventures, this will satiate your cravings. If you didn’t, I’d recommend playing it or at least watching a YouTube story summary before jumping into this one so you have some sense of what’s going on. 

Or you could just ignore the story and spend hours upon hours hunting dinosaurs — a perfectly satisfying option.

 

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(Bloomberg) — Turkey and the United Arab Emirates said they would work on better trade ties and explore defense industry cooperation as President Recep Tayyip Erdogan visited the Gulf state on Monday, further putting aside a longtime regional rivalry. 

Erdogan met with UAE de facto ruler Sheikh Mohammed Bin Zayed Al Nahyan in Abu Dhabi, the second meeting in three months, after years of hostility between the Middle East nations over the role of Islamist groups in the 2011 Arab Spring uprisings. 

The sides signed 13 cooperation deals and will explore developing defense industry cooperation, Turkey’s state-run Anadolu Agency said, without giving details. 

UAE Bets on Old Foe Turkey as its New Trade Link to the World

The UAE, a small but influential oil-and-business powerhouse, signed a $4.9 billion currency swap with Turkey in January, and has outlined plans for a $10 billion fund to support investments as it seeks to at least double bilateral trade.

Non-oil trade between the two countries reached $13.7 billion in 2021, a 54% increase on 2020 and 86% increase on 2019, according to the UAE Economy Ministry. The UAE is confident that non-oil bilateral trade will exceed $30 billion within five years, the UAE’s minister of state for foreign trade Thani Al Zeyoudi said. 

Discussions on investments are now happening at the business-to-business level and sectors include food security, medical services, logistics, industry and e-commerce, he added. 

Catalyzing the recent thaw in relations is financial tumult in Turkey that’s sent Erdogan’s popularity plunging, and the growing challenge from Saudi Arabia to the UAE’s standing as a global business and financial hub.

The UAE has said it wants to benefit from Turkey’s logistical ties with the rest of the world, its investments in the industrial sector and its skilled labor. 

Turkey is battling inflation of almost 50%, and a lira that lost as much as half its value against the dollar before the government intervened at the end of December to stem the currency’s decline. Fitch Ratings cut Turkey’s sovereign credit rating further into junk over the weekend.

UAE to Grow Asia, Africa Trade, Seek $150 Billion Investment

The UAE is working on comprehensive economic partnership agreements with several fast-growing economies as it seeks to cement its position as a global trade hub. It has started talks with India, Indonesia, Israel and Georgia, and plans to add the Philippines.

(Specifies agreements in lede, adds details on trade, sectors for investment)

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(Bloomberg) — India has banned 54 apps it says are of Chinese origin, including Sea Ltd.’s marquee game Free Fire, citing security concerns, people with knowledge of the matter said, the latest instance of tensions between the two neighbors locked in a protracted border dispute.

Sea’s stock sank as much as 19% in New York on Monday, the steepest decline on record. The apps banned by the South Asian nation’s Ministry of Electronics and Information Technology include those belonging to large China tech firms such as Tencent, Alibaba and NetEase, and are re-branded versions of apps already banned by India in 2020, the people said asking not to be identified citing rules on speaking to the media. 

Sea — founded in Singapore by Chinese-born founders who became Singaporean citizens — has been focusing on building a gaming and e-commerce business globally with early backing from Tencent, the largest shareholder of the company. Sea did not immediately respond to requests for comment on the ban on the game Free Fire – Illuminate.

Free Fire, the battle royale shooter often compared with PUBG, is among the world’s most popular mobile games with more than a billion downloads on Google Play. The title has underpinned the phenomenal growth of Singapore-based Sea, Southeast Asia’s most valuable company, and its expansion into markets from Brazil to India. 

Read more: Sea Ltd. Sinks on Free Fire Game Ban in India: Street Wrap

Free Fire India might account for less than 10% of Sea’s gaming revenues, JPMorgan analyst Ranjan Sharma said in a report, slashing his share price target by about 40% to $250. The potential ban of Free Fire could further increase nervousness around Sea’s gaming franchise, he said.

The game was the highest grossing mobile game in India in the third quarter of 2021, according to industry tracker App Annie. While a surprise, the ban shouldn’t impact the company heavily given the Asian country accounted for just under 3% of Sea’s overall mobile-gaming net sales in 2021, Bloomberg Intelligence wrote, citing Sensor Tower estimates.

Why Chinese and Indian Troops Clash in the Himalayas: QuickTake

What Bloomberg Intelligence Says

India’s banning of 54 apps it says are of Chinese origin, including Garena’s marquee game Free Fire, looks like doing little damage to parent Sea Ltd. given its small India revenue exposure. The country accounted for 2.6% of Sea’s 2021 mobile-game net sales, according to Sensor Tower data. Krafton managed to grow its worldwide mobile gaming sales in 2021 even though India banned its flagship PUBG game in 2020; the company launched a new game to get around the prohibition on Chinese-made apps.

– Nathan Naidu and Matthew Kanterman, analysts

Click here for the research.

While Tencent is Sea’s largest shareholder, it’s adopted much the same hands-off approach it takes with other investees in China. In January, the WeChat operator revealed it was cutting its stake in Sea to 18.7% from 21.3%, while taking its voting rights eventually to under 10%.

A spokesman for India’s Home Affairs ministry did not immediately comment on the matter. A Ministry of Electronics and Information Technology spokesperson declined to comment on the issue.

The latest move comes as a long-running dispute between the two nuclear-armed nations remains unresolved, after boiling over in a bloody 2020 skirmish that left soldiers from both sides dead, and drew tougher laws in India for investments from China, including the original app ban. Other Chinese tech companies listed in the U.S. also fell with the Nasdaq Golden Dragon China Index declining as much as 1.9% on Monday.

India and China share an unmarked 3,488 km (2,170 miles) long border along the Himalayas, where thousands of troops, tanks and artillery guns from both countries have been massed since then. Tensions remain between the two countries remain, with India’s army chief citing the risk of Chinese aggression as recently as last month. 

 

(Updates Sea’s share price performance, adds chart and more analyst commentary.)

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(Bloomberg) — Apple Inc. was fined an extra 5 million euros ($5.6 million) by Dutch antitrust regulators over an order to open up app payments for dating services.

Apple’s new terms for payments for dating apps are “unreasonable and create an additional barrier,” the Authority for Consumers & Markets said on Monday. The iphone maker “still does not meet the requirements” of the antitrust authority, the ACM said. 

This is the fourth penalty payment Apple has received from Dutch regulators following a December order for it to open up payment options for dating app providers in the Netherlands. The latest penalty brings the running total for fines to 20 million euros out of a potential maximum amount of 50 million euros.

Apple didn’t immediately respond to a request for comment.

Bowing to the regulator’s pressure, Apple on Jan. 15 announced its first ever move to allow outside payments within App Store apps. Apple usually requires developers to use its own payment system, which helps it enforce a commission for apps on its platform. 

That tight control over app payments has attracted lawsuits and antitrust scrutiny, often focusing on the Apple’s refusal to allow developers steer users to other payment methods. 

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(Bloomberg) —

SoFi Technologies Inc. Chief Executive Officer Anthony Noto said his family holds cryptocurrencies and that it would be a mistake for companies to ignore blockchain technologies, even as he emphasized the risks inherent in the digital assets.

“We’re invested in cryptocurrency — we own Bitcoin, we own Ethereum, we own some of the more obscure and different cryptocurrencies, but it’s a very small part of what we own,” Noto said in a CNBC interview Monday held outside SoFi Stadium, where the Los Angeles Rams won Super Bowl LVI on Sunday. “If you don’t innovate, and you don’t use cryptocurrency as a technology platform, you’ll get left behind.”

Still, Noto described digital currencies as an “unproven asset” and “highly volatile,” adding that they should be only a small part of a diversified portfolio. Interviewer Andrew Ross Sorkin noted that Sunday’s game was called the “Crypto Bowl” by some due to a slew of advertisements for blockchain firms shown during commercial breaks.

Noto also touted rewards he sees his company reaping from its naming rights for the Rams’ home stadium, adding that the firm is also set to benefit from the bank charter it acquired through its purchase of Golden Pacific Bancorp Inc., completed earlier this month. 

“The biggest driving force for us was to try to become a household name, and being associated with the National Football League, and being on prime-time television five or six times a year, and then the Super Bowl, it’s all played out the way that we had thought and then some,” Noto said. “Now we’re regulated by the most important institutions in the world — the Federal Reserve, the OCC and the FDIC — so we get to play with all the big dogs now,” he said, referring to the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

SoFi was earlier than other financial firms to endorse cryptocurrencies, allowing customers to redeem cash-back rewards for Bitcoin or Ether starting early last year. There are currently 30 coins available for SoFi users to trade on its platform, according to the company’s website.

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(Bloomberg) — Reliance Industries Ltd.’s digital platform will invest $200 million in the mobile content company Glance InMobi Pte., a sign regional startups continue to attract financing at strong valuations despite setbacks for some newly-public technology stocks.

The funding from Jio Platforms Ltd. values the startup at about $1.7 billion, said two people familiar with the deal asking not to be quoted since the terms are not public. Glance is also backed by Alphabet Inc.’s Google and Paypal co-founder Peter Thiel’s Mithril Capital.

The Singapore-based startup offers two kinds of services: Its namesake, Glance, delivers curated content to users’ phones without them having to unlock their screens or open any apps. Its short video platform, Roposo, is increasingly becoming a celebrity- and influencer-led commerce platform for brands.

The Jio Platforms investment will help Glance expand globally to markets including the U.S., Mexico, Brazil and Russia. The transaction is subject to regulatory approvals and other conditions, the companies said in a joint statement, sent to stock exchanges.

Reliance Jio Infocomm Ltd., India’s largest mobile services provider with more than 420 million subscribers, is trying to boost its base with home-engineered JioPhone Next smartphones, built in collaboration with Google. The U.S. search giant invested $4.5 billion in the company alongside Meta Platforms Inc in 2020. 

Glance will integrate into the operating system called Pragati OS that Google has custom-made for the Jio devices, bringing lock screen content to buyers of the new phone.  Roposo, in partnership with Reliance’s retail arm, will feature content on Jio users’ lock screens.

“This strategic investment from Reliance will lead to strong collaboration with Glance across devices, commerce and gaming,” said Naveen Tewari, founder and chief executive officer of the InMobi group. “Glance and Roposo have spawned a category of live entertainment plus live commerce via the lock screen which allows users to consume the internet very differently.” 

Harvard Business School alumnus Tewari, 44, co-founded InMobi in 2007 with fellow engineering and business-school peers after a brief stint as a consultant at McKinsey & Co. InMobi went on to become India’s first unicorn in 2011. 

Tewari co-founded Glance InMobi Pte, the Singapore-incorporated subsidiary, in 2019, and it turned a unicorn — with a valuation of more than $1 billion — with Google’s backing in December 2020. It has 163 million daily users in India and another 25 million in Southeast Asia.

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(Bloomberg) — The South African government said it’s working to restore access to a number of state websites that were hit by an outage on Monday.

Websites including those of the Presidency, the National Treasury and the Department of Mineral Resources and Energy’s were all inaccessible as of 3 p.m. in Johannesburg.

“The State Information Technology Agency has experienced some systems challenges,” William Baloyi, a spokesman for the Government Communication Information System, said by phone. “It should be online again soon.”

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(Bloomberg) —

The world’s largest cryptocurrency has been a relative snoozer six weeks into 2022. 

Based on five years of price movements, Bitcoin has moved more than one standard deviation from its average in either direction just five times so far this year, according to data compiled by Bloomberg. That compares to 12 times for the tech-heavy Nasdaq 100 index. The only other time that’s happened in the last five years was in 2020, when the onset of the pandemic roiled equity markets. 

Growing jitters over how aggressively the Federal Reserve will need to tighten policy to combat decades-high inflation have fueled the historic volatility in richly valued tech stocks. Bitcoin hasn’t been battered to the same degree, in part because a large amount of leverage was drained from markets amid the cryptocurrency’s 50% drawdown from November to mid-January, according to Miller Tabak + Co.’s Matt Maley. 

“At its worst level, Bitcoin was down 50% while the Nasdaq 100 was down 15% at its lowest level — 50% declines have a way of wringing out a lot of leverage in an asset,” said Maley, the firm’s chief market strategist. “Since there is likely still a lot of leverage in many of the big Nasdaq 100 stocks, it makes sense that the volatility would be much higher.”

The Nasdaq 100 has dropped nearly 13% so far in 2022, outpacing an 8% decline in Bitcoin. The tech-heavy index has proven more volatile than Bitcoin this year despite having fewer trading days (cryptocurrencies trade all weekend long). 

There’s still a tight linkage between the two asset classes. Bitcoin’s 40-day correlation coefficient with the Nasdaq 100 stands near all-time highs, according to data compiled by Bloomberg.

January’s brutal Bitcoin selloff — which sent prices below $33,000 — appears to have left a lasting mark on risk appetite. Total spot volume on crypto exchanges slumped to $1.8 trillion in January, a decline of more than 30% from the previous month, according to a report from CryptoCompare.

Waning turbulence and trading volume could spell trouble for crypto markets, where volatility is part of the appeal. A big catalyst for Bitcoin’s 2017 bull run was the fact that stocks were fairly boring, according to Kraken’s Juthica Chou. The Nasdaq 100 posted just 11 moves of one standard deviation or greater in 2017 compared Bitcoin’s tally of 92.

“Certainly as there’s opportunity in the broader market, that will take away a little bit from allocating capital to crypto,” Chou, head of OTC options trading at Kraken, said on Bloomberg’s “QuickTake Stock” broadcast. “At the end of the day, Bitcoin is the size of one large tech company. It’s not necessarily going to be able to produce the returns that some these larger, high-frequency firms may look at.”

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