Digital Assets Weekly: Feb 28th, 2020
Summary
Market Strategy:
- Crypto markets had a tough week as global risky assets sold off on coronavirus fears but crypto investors shouldn't panic.
Winners & Losers:
- Winner: Argon's Tim Draper investment may hold promise for future crypto legal governance.
- Loser: Ripple's illegal security lawsuit claims may mean potential upside isn't justified by regulatory risks.
Weekly Rant:
- Why the announcement "Startup Tokenizes $2.2B in Commercial Real Estate Through Polymath" makes me cringe.
Financing Activity:
- Copper.co raises an $8M Series A round to build out its London based crypto custodian platform.
Recent Research:
- Check out our recent report on the Bitcoin SV (BSV) Genesis protocol upgrade if you missed it.
Market Strategy
Bitcoin sold off nearly 10% on the week and brought most other crypto assets in to the red along with it. Among the 10 largest crypto assets, the biggest losers were BSV (-25%), XTZ (-20%) and LTC (-18%), while the best relative performers were BTC (-10%), ETH (-12), and EOS (-13%).
The risk off sentiment seen broadly across global markets is the most proximate cause for the move, as fears of the coronavirus spreading and causing an economic slowdown crushed the S&P 500 by 13% on t...
Reports you may have missed
BTC AS A POSSIBLE STRATEGIC RESERVE Last week, we discussed the rising political tailwinds affecting crypto. Despite events earlier in the year that might have suggested a changed stance from the Democratic Party, the political divide over the issue has grown stronger. The GOP has become the party that is undoubtedly more favorable to the industry. The attempted assassination of former President Trump, juxtaposed against a Democratic Party seemingly in...
Gox Wallet Movements Still Present a Risk, But Macro & Politics Keeps Us Allocated Here (Core Strategy Rebalance)
DISCUSSING THE SUPPLY CONCERNS On balance, macro conditions have moved in our favor thus far in early Q3. We have received soft jobs numbers and softer ISM reports, and cooler inflation figures, which have sent rates and the DXY lower. Unfortunately, the mere reveal of imminent sales from the German BKA and the solidification of the Mt. Gox disbursement timeline were not enough to put a bottom in for bitcoin....
LESSONS FROM OPEC We have witnessed a significant market panic partially related to formerly locked BTC hitting the order books. The major sources of supply include:Mt. Gox – 141,686 BTCUS Government – 8,100 BTCGerman Government – 50,000 BTC At current prices, this would equate to over $12 billion in supply. This threat, combined with an inhospitable macro backdrop (rising DXY, higher rate expectations, hawkish Fed), has brought BTC down to...
LDO Risk/Reward Looks Good Here, Immediate-term Macro Picture Still Uncertain (Core Strategy Rebalance)
FLOWS AND SENTIMENT STILL SUBDUED Last week, we received a better-than-expected CPI print, but the DXY continued to move higher due to global weakness and a hawkish Fed. We discussed the risks appearing in the metrics we use to gauge sentiment and flows. The overall lack of follow-through in the crypto market was evident. Volumes, net ETP flows, the Coinbase discount, stablecoin market cap trend, and search interest for key...
