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This Week in Apps: Instagram brings back the chronological feed, South Korea bans P2E games, Google looks for ecosystem integrations

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy. The app industry continues to grow, with a record number of downloads and consumer spending across..

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Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry continues to grow, with a record number of downloads and consumer spending across both the iOS and Google Play stores combined in 2021, according to the latest year-end reports out this week. App Annie says global spending across iOS and Google Play is up to $135 billion in 2021, and that figure will likely be higher when its annual report, including third-party app stores in China, is released next year. Consumers also downloaded 10 billion more apps this year than in 2020, reaching nearly 140 billion in new installs, it found.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that was up 27% year-over-year.

This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.

Do you want This Week in Apps in your inbox every Saturday? Sign up here: techcrunch.com/newsletters

Top Stories

Instagram to bring back the chronological feed

Image Credits: Bryce Durbin/TechCrunch

Instagram said it will begin testing a new feature that will allow users to select between three different feeds: the current algorithmically generated timeline as well as two new options, Favorites and Following, which are sorted chronologically. This is similar to the Recent & Favorites section that Facebook today offers — though that version is buried in the app’s More menu, making it difficult to access. It’s unclear how easy it will be to access Instagram’s new feed options — especially given the app’s growing clutter and strategic priorities. The latter even saw Instagram shifting its critical “post” button to an out-of-reach spot to give the prime real estate in the app’s navigation to Instagram’s Reels instead.

The feed changes were announced following a Senate hearing where Instagram head Adam Mosseri testified for the first time. The hearing had focused on the app’s teen safety track record but often branched into other areas, like user privacy, and to what extent users were being “manipulated by algorithms,” as one Senator put it. Mosseri had then responded by saying the company was developing a feature that would allow consumers to choose to view a chronological feed. In other words, it’s likely this “test” will soon evolve into a public-facing feature for all users, in order to deflect further pressure from Congress over the matter.

Although users have clamored for an option or full-on return to a chronological feed for some time, Instagram ignored those demands until now — when it’s a topic of legislative inquiry. That fact indicates the need for increased tech regulations as it proves companies won’t listen to user demands unless pressured to do so.

South Korea blocks new “play-to-earn” (P2E) games

The South Korean government’s Game Management Committee in the Ministry of Culture, Sports, and Tourism (or GMC for short) has asked the major app stores to block any games that require an in-app purchase before users play. The games, which have become popular in the crypto industry, often require that players first purchase game pieces as NFT. Players can then compete for in-game rewards and prizes, giving them the name “play-to-earn” (or P2E). The GMC said it asked the app stores to remove the existing P2E games on the market and block the release of new ones.

The changes follow other difficulties for these types of games in South Korea, which have been battling in the courts to get age ratings required to be listed in the domestic app stores. The government limits in-game rewards to 10,000 Korean won (~$8.40), but some of the games’ cashouts exceed that figure but were being listed anyway — which would technically be illegal.

The government views this genre of gaming as a money-making scheme and is now taking a harsher stance to get them removed from the app stores and out of kids’ hands, in particular. In addition to penalizing games themselves, the new restrictions may impact other titles associated with games in this genre, like those tied to games like Axie Infinity and Splinterlands.

Weekly News

Platforms: Apple

  • Apple launched App Analytics for in-app events. Events are a newer feature that allow developers to promote something happening inside their app at the present time — like game competitions, the release of seasonal features, livestreamed experiences, new movie releases and more. Now developers will be able to view information about their events’ performance, including event page views, reminder and notification data, and the number of downloads and redownloads that were driven by their in-app events. This data can also be viewed by territory, source type, device and more, Apple said.

Platforms: Google

  • Google is working to catch up with Apple with a new series of integrations between its various platforms, including Android, Wear OS and Chromebooks. At CES, the company showed off a number of new software features that would allow its users to be able to do things like mirror their Android screen on their Chromebook or use its Fast Pairing feature generally meant for headphones on other devices like TVs and smart home devices. Later this year, Chromebook owners will also be able to instantly set up their devices using an Android handset to port over their data and logins. Smartwatches running Wear OS 3 will also be able to unlock Android phones and Chromebooks, the way Apple Watch works today. Plus, Windows PCs and Android will also work more closely, Google says.
  • Google also at CES introduced a new integration with Volvo which will allow owners to do things like turn their car on and off, control the temperature, and get car information using voice commands on Google Assistant-enabled home and Android mobile devices.
  • XDA Developers reportedly got ahold of Android 13 screenshots (aka “Tiramisu”) which show updates and changes in areas like app language selection, runtime permissions for notifications, the lockscreen clock and more. They also include a look at The Android Resource Economy (TARE), which focuses on energy use management.

E-commerce

  • Amazon dropped to No. 4 in global shopping app installs in 2021, according to data from Apptopia. Amazon had topped the list last year, but has now fallen behind Singapore’s Shopee, China’s Shein and India’s Meesho. Amazon is still No. 1 in the U.S., however.

Augmented Reality

  • Snapchat released a new AR filter ahead of the holidays which lets you see what you’d look like in the “metaverse.” In other words, the filter makes you look more like a virtual character (your SIMS self?) or some sort of gaming avatar. This is maybe even more impressive than that Disney filter?

snapchat avatar lens examples

Image Credits: Snapchat

Fintech/Crypto

  • Messaging app Signal’s cryptocurrency feature seemed to have quietly launched to worldwide users in mid-November, but was only picked up on this past week. The feature, which was previously being tested in the U.K., integrates with a privacy-focused cryptocurrency called MobileCoin. Signal users can now send MobileCoin to others in the app worldwide. MobileCoin founder Josh Goldbard confirmed the rollout to Wired, noting Signal’s adoption helped the cryptocurrency jump to thousands of daily transactions compared with just dozens before the global release.
  • Spare change investing app Acorns is inching into Robinhood territory with its plan to build a feature that allows users to customize their own stock portfolios instead of just using Acorns’ own ETFs.
  • China’s WeChat will begin supporting the digital yuan (e-CNY), the country’s sovereign digital currency that’s been in the works since 2014. The move would bring the currency to WeChat Pay’s over 800 million MAUs.
  • Apptopia revealed the top finance apps for 2021, including to 10 most downloaded crypto apps — a list that was led by Binance, Crypto.com, and Coinbase.

Image Credits: Apptopia

Social

  • Twitter released a handful of new features this week, including its own take on TikTok’s video reactions and updated Spaces features, including the ability for hosts to see how many listeners joined live and how many replayed the Space after the fact.
  • Microsoft-owned LinkedIn is the latest to clone Clubhouse with this week’s beta launch of interactive audio events, which will be followed by a video version in the spring. Hosts will be able to record and run their events directly on LinkedIn, host live conversations, moderate rooms and more.
  • Snap is suing the USPTO for rejecting its application to trademark the word “spectacles” for its digital AR glasses. The application was rejected because spectacles is a generic term, and Snap’s version “has not acquired distinctiveness,” according to a report from The Verge.
  • TikTok is testing its own version of a retweet with a new “Repost” button that shows up on video on the For You feed. Reposted videos will then appear on the For You feed for those who you’re mutual friends with on the app. You can also add a comment as to why you shared the video. TikTok said the feature is live for a limited number of users for the time being.

Image Credits: TikTok screenshot

  • Instagram was spotted testing a new Stories feature that would allow users to “like” each other’s stories, but privately. Only the person who had posted the Story would be able to see the total number of likes and that there were not any plans to make the like count public.
  • Tumblr has been getting in trouble with Apple’s App Review over the mature content in its app, leading it to new crackdowns that have confused Tumblr users. The company had been struggling to remove content featuring pornography, sex and other adult material from its iOS app, amid constant App Store rejections. It seems Tumblr’s own system requiring blogs to be labeled as “adult” wasn’t getting the job done to keep this sort of content out of the hands of iOS users. Complicating matters is how Apple’s review system works. Apple randomly assigns an app review to whoever is available at the time instead of allowing a company to work with an Apple employee on a more direct basis to solve a specific problem. That leads to inconsistent responses based on how each reviewer interprets Apple’s rules or their overall thoroughous. For Tumblr, it’s meant a lot of jumping through hoops to try to get its app cleaned up enough to be allowed back in the App Store.

Dating

  • Tinder was spotted developing a feature called Swipe Party that lets users invite friends to their swiping session. Users send friends a link to establish a guest account, and then those friends can watch their friend using audio and video while they vet their dating prospects.

Messaging

  • China’s WeChat (to be fair, a super app not just a social messenger) said DAUs of its mini-programs grew about 12.5% to 450 million in 2021 and its native search function added 200 million MAUs over the past year. The growth took place among government crackdowns on local tech companies.
  • WhatsApp is preparing to introduce profile photo notifications in a future update, according to WABetaInfo. The feature is being rolled out to beta users on iOS (iOS 15+).

Streaming & Entertainment

  • Spotify introduced a new ad format for podcasts. The cards will appear as the audio ad begins playing, and is supported by Spotify’s investment in streaming ad insertion technology. The cards will also remain on show and episode pages for users to discover later on.
  • Clubhouse finally added support for listening to its shows via the web. The feature is first launching in the U.S. as an experiment. The company also rolled out a “Share on Clubhouse” feature that lets you post to social media when you’re in an interesting room that you want others to join. Creators will also be able to see Share and Clip counts at the bottom of their rooms, and access a new Room Insights page which will include more insights over time.
  • TikTok teamed up with business-focused streaming service Atmosphere, which offers video content for commercial venues like bars, gyms and restaurants. Atmosphere will offer a new channel featuring curated TikTok content — the first time TikTok is offered on an out-of-home service.
  • Apple is reportedly considering an entry into the audiobook market, according to a report by The Economist. A new service would fit into Apple’s broader goal of offering more subscriptions to its users, and the rumor fits with other reports of a services expansion in 2022.

Gaming

  • Samsung at CES announced its 2022 TVs will bring cloud gaming services, including GeForce Now and Google’s Stadia, to a new gaming hub, where viewers can also watch YouTube gaming videos. The TVs will also support NFTs somehow but details were light on the implementation details.
  • China’s continued gaming crackdown has put a freeze on new video game licenses, leading 14,000 gaming-related firms and small studios to shut down over the past several months. Regulators haven’t released a list of approved new video game titles since the end of July, making this the longest crackdown since the nine-month pause in 2018.

Utilities/Productivity

  • Brave’s browser, available for both mobile and web, says it has doubled the number of MAUs for the fifth year in a row, going from 24 million MAU on December 31st, 2020, to over 50 million by the end of 2021. It also has over 15.5 million daily active users and sees 2.3 billion searches per year. In 2021, the browser added Brave Search, Brave Wallet, Brave Talk and, for iOS, Brave Playlist.
  • At CES, gaming PC maker Razer introduced plans for a new Razer Smart Home app that will allow users to set up a range of smart home devices from across manufacturers.
  • Hey’s email app was updated with a vacation auto-responder called “Away Autoresponder” that will send out pre-written automatic replies to incoming emails. Users can just toggle the feature on when they’re out, and can opt to restrict the auto-replies to screened-in contacts or to all.

Health & Fitness

  • Apple updated its Apple Fitness+ service which will include Collections and Time to Run features starting on January 10. Collections are a series of workouts and meditations from the Fitness+ library focused on helping users reach a specific goal, like improving your posture or running your first 5K. Meanwhile, Time to Run is an audio experience designed for runners, where each episode focuses on a popular running route in select major cities, and includes music that aims to capture the spirit of the city and photos of the route being run. Time to Walk will also roll out its third season with new guests like Rebel Wilson, Bernice A. King and Hasan Minhaj. New Artist Spotlight workouts are being added as well.
  • A study of over 2,000 adults by Sleep Junkie found that TikTok was the worst app to use before bed, as it causes difficulties in falling asleep. TikTok users took over one hour longer than average to fall asleep and spent 14% of their sleep in the REM phase, which is half of the recommended amount.
  • Meditation app Calm has launched its first foray into physical activity and short-form video content with its new “Daily Move” video series. The series will feature elements from yoga, tai chi, Pilates, stretching, dance, walking and more, and each video will be 3-5 minutes in length.
  • Most of the U.S. still isn’t using COVID-19 exposure identification apps, even as omicron surges, The Washington Post reported. More than 20 U.S. states don’t use the technology for exposure notifications built by Apple and Google, it found.

Travel & Transportation

  • China’s ride-sharing app Didi disclosed a $4.7 billion loss after its revenues shrank in the last quarter, driven by new government regulations in the country, Bloomberg reported. The company plans to shift its listing to Hong Kong next year.

Government & Policy

  • Indian antitrust regulator ordered an investigation into Apple’s business practices, including its requirement for app developers to use its own payments system for apps and in-app purchases. The inquiry was triggered by a complaint filed by nonprofit Together We Fight Society, which said the requirement makes a significant dent in developers’ revenues.
  • Germany’s antitrust regulator found that Google met the threshold for special abuse control under its competition laws for digital companies. The assessment included Google’s dominance in online advertising as well as its role as gatekeeper on key services like YouTube and the Play Store on Android.
  • Spotify’s Head of Global Affairs and Chief Legal Officer Horacio Gutierrez, who led the company’s antitrust battles with Apple, is leaving the company for Disney. The move is also a loss for the Coalition for App Fairness, which recently saw its amicus curiae brief rejected by a regional appeals court in the Epic-Apple battle.

Funding and M&A

Twitter completed the sale of MoPub to AppLovin for $1.05 billion. The deal was first announced in October 2021, following Twitter’s reveal of its plan to double its revenue by 2023 to reach $7.5 billion or more. Twitter said it aims to redirect more resources toward performance-based ads, SMBs and commerce.

Pediatric mental health app Little Otter raised $22 million to scale its service providing treatment to kids and families. The round was led by CRV and brings the company’s total raise to date to $26.7 million.

Indian hyperlocal delivery startup Dunzo raised $240 million in funding led by Reliance Retail. Its $200 million investment will give it a 25.8% stake in the six-year-old startup that now operates in seven cities in India.

Emotional wellness app Mine’d raised $3.5 million in a seed round led by Listen Ventures. The app offers interactive and short-form live and on-demand classes on a variety of topics like dating, breakups, career and purpose. The six-month-old app now has a community of over 100,000 users and 1 million videos.

Vietnam-based digital banking firm Timo Bank raised $20 million in its first external funding led by Square Peg. Founded in 2015, Timo Bank lets users sign up without visiting a bank branch and helps customers visualize their financial goals.

Delivery Hero is acquiring a majority stake in Spanish delivery company Glovo. The deal, announced on December 31, 2021, will allow Delivery Hero to acquire an additional 39.4% on top of its existing 44% stake.

Prune-based mobile-first credit card company OneCard raised $75 million in a new round led by existing investor QED, valuing the business at $722 million, post-money. That’s up 4x from the valuation in the company’s Series B round in April 2021. OneCard is offered in 12 cities, including Mumbai, Delhi, NCR and Bengaluru.

Fintech Ant Money, a micro-income startup, raised $20 million in funding (a mix of previously unannounced seed and Series A capital) and acquired Blast, a startup offering financial tools for gamers, via a stock-for-stock merger. The funding was led by Franklin Templeton’s Franklin Venture Partners. The startup declined to share the acquisition price for Blast.

Indian neobank Jupiter raised $86 million in Series C funding to launch new lending and wealth management services. QED and Sequoia Capital India co-led the round, valuing the startup at $711 million, up from $300 million in August 2021.

Downloads

The Oculus app, apparently

Oculus Quest 2

Image Credits: Facebook

Consumers worldwide downloaded Meta’s Oculus app, the mobile companion for Oculus VR devices including the Quest 2, roughly 2 million times globally since Christmas Day, according to new data from third-party app intelligence firms Apptopia and Sensor Tower. Already, there had been some indication that the Quest 2 was a popular holiday gift after the Oculus app shot to the top of the Apple App Store for the first time ever on Christmas Day and became the most popular free app on Google Play in the U.S., as well.

During the week of Christmas in the U.S. (December 23-29), adoption of the Oculus app jumped up by 517% week-over-week to reach 1.5 million installs, Sensor Tower’s data indicates.

In the week that followed, the firm saw those installs drop 77% to 345,000 from December 30 through January 5, but this figure is still higher than the week before Christmas 2021 by 42%. And it’s likely that these more recent downloads still include those who recently received a new Oculus device for the holidays, but hadn’t gotten around to setting it up yet.

While the U.S. accounted for the majority of the post-Christmas installs, app intelligence firms estimate that, in total, the app has seen around 2 million global installs from Christmas Day through the present across the App Store and Google Play combined.

(Read TechCrunch’s full report here.) 

 

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Chronic stress and inflammation linked to societal and environmental impacts in new study

From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors…

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From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors can cause chronic inflammation in our bodies. Chronic inflammation is linked to serious conditions such as cardiovascular disease and cancer – and may also affect our thinking and behavior.   

Credit: Image: Vodovotz et al/Frontiers

From anxiety about the state of the world to ongoing waves of Covid-19, the stresses we face can seem relentless and even overwhelming. Worse, these stressors can cause chronic inflammation in our bodies. Chronic inflammation is linked to serious conditions such as cardiovascular disease and cancer – and may also affect our thinking and behavior.   

A new hypothesis published in Frontiers in Science suggests the negative impacts may extend far further.   

“We propose that stress, inflammation, and consequently impaired cognition in individuals can scale up to communities and populations,” explained lead author Prof Yoram Vodovotz of the University of Pittsburgh, USA.

“This could affect the decision-making and behavior of entire societies, impair our cognitive ability to address complex issues like climate change, social unrest, and infectious disease – and ultimately lead to a self-sustaining cycle of societal dysfunction and environmental degradation,” he added.

Bodily inflammation ‘mapped’ in the brain  

One central premise to the hypothesis is an association between chronic inflammation and cognitive dysfunction.  

“The cause of this well-known phenomenon is not currently known,” said Vodovotz. “We propose a mechanism, which we call the ‘central inflammation map’.”    

The authors’ novel idea is that the brain creates its own copy of bodily inflammation. Normally, this inflammation map allows the brain to manage the inflammatory response and promote healing.   

When inflammation is high or chronic, however, the response goes awry and can damage healthy tissues and organs. The authors suggest the inflammation map could similarly harm the brain and impair cognition, emotion, and behavior.   

Accelerated spread of stress and inflammation online   

A second premise is the spread of chronic inflammation from individuals to populations.  

“While inflammation is not contagious per se, it could still spread via the transmission of stress among people,” explained Vodovotz.   

The authors further suggest that stress is being transmitted faster than ever before, through social media and other digital communications.  

“People are constantly bombarded with high levels of distressing information, be it the news, negative online comments, or a feeling of inadequacy when viewing social media feeds,” said Vodovotz. “We hypothesize that this new dimension of human experience, from which it is difficult to escape, is driving stress, chronic inflammation, and cognitive impairment across global societies.”   

Inflammation as a driver of social and planetary disruption  

These ideas shift our view of inflammation as a biological process restricted to an individual. Instead, the authors see it as a multiscale process linking molecular, cellular, and physiological interactions in each of us to altered decision-making and behavior in populations – and ultimately to large-scale societal and environmental impacts.  

“Stress-impaired judgment could explain the chaotic and counter-intuitive responses of large parts of the global population to stressful events such as climate change and the Covid-19 pandemic,” explained Vodovotz.  

“An inability to address these and other stressors may propagate a self-fulfilling sense of pervasive danger, causing further stress, inflammation, and impaired cognition in a runaway, positive feedback loop,” he added.  

The fact that current levels of global stress have not led to widespread societal disorder could indicate an equally strong stabilizing effect from “controllers” such as trust in laws, science, and multinational organizations like the United Nations.   

“However, societal norms and institutions are increasingly being questioned, at times rightly so as relics of a foregone era,” said Prof Paul Verschure of Radboud University, the Netherlands, and a co-author of the article. “The challenge today is how we can ward off a new adversarial era of instability due to global stress caused by a multi-scale combination of geopolitical fragmentation, conflicts, and ecological collapse amplified by existential angst, cognitive overload, and runaway disinformation.”    

Reducing social media exposure as part of the solution  

The authors developed a mathematical model to test their ideas and explore ways to reduce stress and build resilience.  

“Preliminary results highlight the need for interventions at multiple levels and scales,” commented co-author Prof Julia Arciero of Indiana University, USA.  

“While anti-inflammatory drugs are sometimes used to treat medical conditions associated with inflammation, we do not believe these are the whole answer for individuals,” said Dr David Katz, co-author and a specialist in preventive and lifestyle medicine based in the US. “Lifestyle changes such as healthy nutrition, exercise, and reducing exposure to stressful online content could also be important.”  

“The dawning new era of precision and personalized therapeutics could also offer enormous potential,” he added.  

At the societal level, the authors suggest creating calm public spaces and providing education on the norms and institutions that keep our societies stable and functioning.  

“While our ‘inflammation map’ hypothesis and corresponding mathematical model are a start, a coordinated and interdisciplinary research effort is needed to define interventions that would improve the lives of individuals and the resilience of communities to stress. We hope our article stimulates scientists around the world to take up this challenge,” Vodovotz concluded.  

The article is part of the Frontiers in Science multimedia article hub ‘A multiscale map of inflammatory stress’. The hub features a video, an explainer, a version of the article written for kids, and an editorial, viewpoints, and policy outlook from other eminent experts: Prof David Almeida (Penn State University, USA), Prof Pietro Ghezzi (University of Urbino Carlo Bo, Italy), and Dr Ioannis P Androulakis (Rutgers, The State University of New Jersey, USA). 


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Acadia’s Nuplazid fails PhIII study due to higher-than-expected placebo effect

After years of trying to expand the market territory for Nuplazid, Acadia Pharmaceuticals might have hit a dead end, with a Phase III fail in schizophrenia…

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After years of trying to expand the market territory for Nuplazid, Acadia Pharmaceuticals might have hit a dead end, with a Phase III fail in schizophrenia due to the placebo arm performing better than expected.

Steve Davis

“We will continue to analyze these data with our scientific advisors, but we do not intend to conduct any further clinical trials with pimavanserin,” CEO Steve Davis said in a Monday press release. Acadia’s stock $ACAD dropped by 17.41% before the market opened Tuesday.

Pimavanserin, a serotonin inverse agonist and also a 5-HT2A receptor antagonist, is already in the market with the brand name Nuplazid for Parkinson’s disease psychosis. Efforts to expand into other indications such as Alzheimer’s-related psychosis and major depression have been unsuccessful, and previous trials in schizophrenia have yielded mixed data at best. Its February presentation does not list other pimavanserin studies in progress.

The Phase III ADVANCE-2 trial investigated 34 mg pimavanserin versus placebo in 454 patients who have negative symptoms of schizophrenia. The study used the negative symptom assessment-16 (NSA-16) total score as a primary endpoint and followed participants up to week 26. Study participants have control of positive symptoms due to antipsychotic therapies.

The company said that the change from baseline in this measure for the treatment arm was similar between the Phase II ADVANCE-1 study and ADVANCE-2 at -11.6 and -11.8, respectively. However, the placebo was higher in ADVANCE-2 at -11.1, when this was -8.5 in ADVANCE-1. The p-value in ADVANCE-2 was 0.4825.

In July last year, another Phase III schizophrenia trial — by Sumitomo and Otsuka — also reported negative results due to what the company noted as Covid-19 induced placebo effect.

According to Mizuho Securities analysts, ADVANCE-2 data were disappointing considering the company applied what it learned from ADVANCE-1, such as recruiting patients outside the US to alleviate a high placebo effect. The Phase III recruited participants in Argentina and Europe.

Analysts at Cowen added that the placebo effect has been a “notorious headwind” in US-based trials, which appears to “now extend” to ex-US studies. But they also noted ADVANCE-1 reported a “modest effect” from the drug anyway.

Nonetheless, pimavanserin’s safety profile in the late-stage study “was consistent with previous clinical trials,” with the drug having an adverse event rate of 30.4% versus 40.3% with placebo, the company said. Back in 2018, even with the FDA approval for Parkinson’s psychosis, there was an intense spotlight on Nuplazid’s safety profile.

Acadia previously aimed to get Nuplazid approved for Alzheimer’s-related psychosis but had many hurdles. The drug faced an adcomm in June 2022 that voted 9-3 noting that the drug is unlikely to be effective in this setting, culminating in a CRL a few months later.

As for the company’s next R&D milestones, Mizuho analysts said it won’t be anytime soon: There is the Phase III study for ACP-101 in Prader-Willi syndrome with data expected late next year and a Phase II trial for ACP-204 in Alzheimer’s disease psychosis with results anticipated in 2026.

Acadia collected $549.2 million in full-year 2023 revenues for Nuplazid, with $143.9 million in the fourth quarter.

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Digital Currency And Gold As Speculative Warnings

Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution…

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Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution of the market into a “casino” following the pandemic, where retail traders have increased their speculative appetites.

“Such is unsurprising, given that retail investors often fall victim to the psychological behavior of the “fear of missing out.” The chart below shows the “dumb money index” versus the S&P 500. Once again, retail investors are very long equities relative to the institutional players ascribed to being the “smart money.””

“The difference between “smart” and “dumb money” investors shows that, more often than not, the “dumb money” invests near market tops and sells near market bottoms.”

Net Smart Dumb Money vs Market

That enthusiasm has increased sharply since last November as stocks surged in hopes that the Federal Reserve would cut interest rates. As noted by Sentiment Trader:

“Over the past 18 weeks, the straight-up rally has moved us to an interesting juncture in the Sentiment Cycle. For the past few weeks, the S&P 500 has demonstrated a high positive correlation to the ‘Enthusiasm’ part of the cycle and a highly negative correlation to the ‘Panic’ phase.”

Investor Enthusiasm

That frenzy to chase the markets, driven by the psychological bias of the “fear of missing out,” has permeated the entirety of the market. As noted in This Is Nuts:”

“Since then, the entire market has surged higher following last week’s earnings report from Nvidia (NVDA). The reason I say “this is nuts” is the assumption that all companies were going to grow earnings and revenue at Nvidia’s rate. There is little doubt about Nvidia’s earnings and revenue growth rates. However, to maintain that growth pace indefinitely, particularly at 32x price-to-sales, means others like AMD and Intel must lose market share.”

Nvidia Price To Sales

Of course, it is not just a speculative frenzy in the markets for stocks, specifically anything related to “artificial intelligence,” but that exuberance has spilled over into gold and cryptocurrencies.

Birds Of A Feather

There are a couple of ways to measure exuberance in the assets. While sentiment measures examine the broad market, technical indicators can reflect exuberance on individual asset levels. However, before we get to our charts, we need a brief explanation of statistics, specifically, standard deviation.

As I discussed in “Revisiting Bob Farrell’s 10 Investing Rules”:

“Like a rubber band that has been stretched too far – it must be relaxed in order to be stretched again. This is exactly the same for stock prices that are anchored to their moving averages. Trends that get overextended in one direction, or another, always return to their long-term average. Even during a strong uptrend or strong downtrend, prices often move back (revert) to a long-term moving average.”

The idea of “stretching the rubber band” can be measured in several ways, but I will limit our discussion this week to Standard Deviation and measuring deviation with “Bollinger Bands.”

“Standard Deviation” is defined as:

“A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of the variance.”

In plain English, this means that the further away from the average that an event occurs, the more unlikely it becomes. As shown below, out of 1000 occurrences, only three will fall outside the area of 3 standard deviations. 95.4% of the time, events will occur within two standard deviations.

Standard Deviation Chart

A second measure of “exuberance” is “relative strength.”

“In technical analysis, the relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can read from 0 to 100.

Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.” – Investopedia

With those two measures, let’s look at Nvidia (NVDA), the poster child of speculative momentum trading in the markets. Nvidia trades more than 3 standard deviations above its moving average, and its RSI is 81. The last time this occurred was in July of 2023 when Nvidia consolidated and corrected prices through November.

NVDA chart vs Bollinger Bands

Interestingly, gold also trades well into 3 standard deviation territory with an RSI reading of 75. Given that gold is supposed to be a “safe haven” or “risk off” asset, it is instead getting swept up in the current market exuberance.

Gold vs Bollinger Bands

The same is seen with digital currencies. Given the recent approval of spot, Bitcoin exchange-traded funds (ETFs), the panic bid to buy Bitcoin has pushed the price well into 3 standard deviation territory with an RSI of 73.

Bitcoin vs Bollinger Bands

In other words, the stock market frenzy to “buy anything that is going up” has spread from just a handful of stocks related to artificial intelligence to gold and digital currencies.

It’s All Relative

We can see the correlation between stock market exuberance and gold and digital currency, which has risen since 2015 but accelerated following the post-pandemic, stimulus-fueled market frenzy. Since the market, gold and cryptocurrencies, or Bitcoin for our purposes, have disparate prices, we have rebased the performance to 100 in 2015.

Gold was supposed to be an inflation hedge. Yet, in 2022, gold prices fell as the market declined and inflation surged to 9%. However, as inflation has fallen and the stock market surged, so has gold. Notably, since 2015, gold and the market have moved in a more correlated pattern, which has reduced the hedging effect of gold in portfolios. In other words, during the subsequent market decline, gold will likely track stocks lower, failing to provide its “wealth preservation” status for investors.

SP500 vs Gold

The same goes for cryptocurrencies. Bitcoin is substantially more volatile than gold and tends to ebb and flow with the overall market. As sentiment surges in the S&P 500, Bitcoin and other cryptocurrencies follow suit as speculative appetites increase. Unfortunately, for individuals once again piling into Bitcoin to chase rising prices, if, or when, the market corrects, the decline in cryptocurrencies will likely substantially outpace the decline in market-based equities. This is particularly the case as Wall Street can now short the spot-Bitcoin ETFs, creating additional selling pressure on Bitcoin.

SP500 vs Bitcoin

Just for added measure, here is Bitcoin versus gold.

Gold vs Bitcoin

Not A Recommendation

There are many narratives surrounding the markets, digital currency, and gold. However, in today’s market, more than in previous years, all assets are getting swept up into the investor-feeding frenzy.

Sure, this time could be different. I am only making an observation and not an investment recommendation.

However, from a portfolio management perspective, it will likely pay to remain attentive to the correlated risk between asset classes. If some event causes a reversal in bullish exuberance, cash and bonds may be the only place to hide.

The post Digital Currency And Gold As Speculative Warnings appeared first on RIA.

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