Digital Assets Weekly: June 23rd
Market Analysis
Closing at $9,304 on Tuesday evening, Bitcoin remains firmly within its $9,000 - $10,000 trading range that has persisted since the May halving. Heading into the back half of the week, all eyes are on the options market as an estimated $930M worth of bitcoin options, accounting for about 70% of total open interest are set to expire on June 26th.
Bitcoin remains firmly ahead of gold as the best performing asset class on a YTD basis.
Ethereum led all major crypto assets over the past week by ~3% and finished the week up 5.2%.
FS Crypto FX 40 was the best performing index last week, finishing the week up 4.8% and outperforming all other indices by ~2%. Major contributors to this outperformance were Chainlink (+14%), Cypto.com Coin (+12.2%) and Ontology (+18.9%).
The table below shows the returns of the largest assets and the FS Size Indexes over the year.
Fundamental Valuations
Bitcoin’s P/CMR valuation stood at 9.6x as of 6/22 vs 9.4x as of last week. This value remains slightly below the levels from Mar-19 through present.
Bitcoin’s market cap to realized value (MV/RV) multiple was 1.7x as of 6/22 vs 1.6x last week.
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...
INFLOWS RESUME On Monday, market sentiments were rattled by a surprisingly strong manufacturing PMI figure, marking the first expansionary reading in 18 months. This led to a rise in rates, with risk assets across the board experiencing selloffs amid renewed inflation concerns and fears that the Federal Reserve might need to implement further measures to cool the economy. However, in our crypto comments video on Tuesday, we outlined a couple...
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