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Hi Reader, here's what you need to know for May 16th in 3:05 minutes.

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Today's big stories

Investors pulled money out of every market last week, according to a new report
Ethereum is up against some tough competition, so we’ve looked into whether you should still buy into the blockchain – Read Now
Japanese automaker Honda gave a mixed results update

All Together Now

What’s Going On Here?

It’s nice to know we can all agree on something in these divisive times: investors pulled money out of every market last week, according to a Bank of America report out on Friday

What Does This Mean?

It’s not exactly a ringing endorsement for the global economy when investors are bailing on everything all at once, but that’s exactly what happened between May 4th and May 11th. Global bonds lost a net $11 billion even after higher US interest rates pushed up yields, while cash and gold funds hemorrhaged $20 billion and $2 billion respectively. Stocks weren’t spared either: investors pulled $6 billion out of the market, most heavily those of European and emerging market (EM) companies. That makes sense: the Russia-Ukraine conflict is leaving Europe’s investors with a nasty taste in their mouths, while EMs are at risk from high food and energy prices, the rising cost of debt, and China’s economic slowdown.

Why Should I Care?

Zooming in: Tech, tech, tech… kaboom.
Tech stocks were particularly badly hit, suffering their biggest weekly withdrawal of the year at over $1 billion. Not that it’s especially surprising: the tech-heavy Nasdaq 100 index did just post its sixth-straight weekly drop, as the Federal Reserve’s aggressive rate hikes push investors to dump expensive-looking stocks (tweet this). Even Apple – a supposedly stable blue-chip company – is down 20% from its peak, putting it squarely in bear market territory.

For you personally: Buy the dip?
Hey, look on the bright side: the analysts behind the report have pointed out that the fact that investors are pulling money out of every market – safe havens and risky assets alike – could be a sign of “true market capitulation”. In other words, sentiment is now so negative that we might be near the bottom of the market – something you might be tempted to capitalize on…

You might also like: Is Ray Dalio’s “bubble indicator” telling you to buy the dip?

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Analyst Take

Where Will Ethereum Go Next?

By Jonathan Hobbs, Analyst

Where Will Ethereum Go Next?

Look, it’s no secret that Ethereum is a major player in the crypto market.

But it’ll need to stay on its toes if it’s going to have any chance of keeping it that way, with major upstarts like Solana and Avalanche nipping at its heels.

So that’s what it’s doing: it’s switching to a proof-of-stake (PoS) blockchain, which means there’ll be no more energy-sucking, competitive ether mining.

PoS will mean Ethereum consumes far less electricity. And validators, unlike miners, won’t have to fork out on expensive mining equipment and cover sky-high electricity bills.

That’s when Ethereum can move onto the next 2.0 upgrade: sharding. That is, making Ethereum transactions a lot faster and cheaper.

So that’s today’s Insight: how Ethereum got here, and where it’s going next.

Read or listen to the Insight here

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