Digital Assets Weekly: April 14th, 2020
Please see important disclosures at the bottom of this report
Readers Note: The crypto weekly newsletter was not published last Friday due to the Easter holiday and has been moved to today instead.
Portfolio Strategy
Crypto markets have seen price swings over past weeks, but despite the choppiness, markets have largely ended where we left them in prior weeks with Bitcoin sitting around $6,900 today.
Crypto Allocation: For this reason, our tactical crypto exposure recommendations haven’t changed since our last note, but we will provide investors more color on certain portfolio allocations this week.
Size Allocation: Higher beta small caps have picked up the pace lately, as we mentioned would happen during a broader market uptrend, but we still believe it’s best to keep a managed risk approach towards smaller names at this time to hedge against any potential market reversal.
Defensives/Cyclicals: We remain overweight defensives PoW assets vs. cyclical PoS assets this week but acknowledge we are incrementally warming up to cyclicals and may move to market weight if the recovery continues to play out.
Bitcoin: Our outlook for Bitcoin remains bullish, but it continues to be our view that investors have the opportunity to capture more u...Reports you may have missed
BUYERS ON STRIKE Last week, we discussed our immediate-term cautious approach to the crypto market, highlighting recent geopolitical tensions, tax-related selling, negative fiscal flows, and the persistent rise in real yields as reasons for a more risk-averse positioning (albeit relative, as holding 7.5% in cash and the rest in crypto is hardly considered risk-averse in most circles). This uncertainty has persisted into this week, evidenced by what we consider an...
Fiscal Dominance, Flows from China, Plus Some Thoughts on Global Conflict (Core Strategy Rebalance)
WHAT BTC SHRUGGING OFF CPI SAYS ABOUT CURRENT FISCAL SITUATION The most significant piece of macro data this week was the CPI. Headline CPI registered at 3.5%, surpassing the anticipated 3.4%, while core CPI remained steady from last month at 3.8%, also above the expected 3.7%. This increase was largely attributed to rising costs in auto insurance and shelter. Consequently, interest rates saw a sharp rise, with the 10-year Treasury...
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