Back to Back
May 23, 2021
Author: Guy Soreq
This is the amount of money that was wiped out in the cryptocurrency market from its high on May 12th until its crash on May 19th. The cryptocurrency market cap, meaning the estimated total value of the assets traded, reached a record $2.58 trillion earlier this month. On Wednesday the 19th, it had crashed by more than 50% down to just $1.2 trillion. Since Wednesday, the price has fallen even further.
The value of the crypto market is heavily tied to market sentiment on the potential of these assets in the future. That potential is now in question as cryptocurrencies have recently hit a number of regulatory hurdles, including a ban by China, and have seen a retreat in their broader acceptance. Institutional investors, who rallied behind crypto back in September and were at least partially responsible for its dramatic bull rally, are now pulling back in favor of gold.
Although you can’t feed Bitcoin to a chicken or ferment Ethereum to be used in amino acid production, there’s quite a bit we can learn from this recent market crash as we watch the world of soft commodities With corn we’ve seen that one week prices are reaching new heights, while the next week they are plummeting. July futures took a serious tumble last week. Both the markets for crypto and feed are incredibly volatile, which means that anxious traders should be prepared to handle whatever turn the market takes next.
We’ve written before that when prices are climbing you need to have a strong open line of communication with your supplier to ensure that there is enough material at a certain price. When prices fall, it is especially important to talk to your customers in case someone else is there to offer them a better price. Back to back orders, when purchase orders are created from and connected directly to sales orders, mitigate some of the risk associated with volatility.
Back to back trades happen fast, and require a level of trust between all parties involved. When markets are changing quickly, there is no time to compare quotes because the offer may be gone within a matter of hours. We built Glowlit so that buyers and sellers would have a place where offers are benchmarked in real time. Glowlit data is uniquely trusted by both sides of the market, allowing both sides of the market to trust each other and the fairness of the trade at hand.
Photo by Bermix Studio on Unsplash