A View Into ‘22
Key Takeaways
- Macro continues to dominate the crypto discourse as the 90-day rolling correlation between BTC and the BVP Emerging Cloud Index approaches 1.
- We discuss our thoughts pertaining to where Bitcoin sits on investors’ risk curves, how it will move to a lower risk bucket in 2022, and why this would be a major tailwind for the asset.
- SOPR gives us a view into the profile of recent sellers. Meanwhile, long-term holders continue to accumulate, siphoning supply from “paper hands.”
- We investigate the concept of dormancy flow and the bullish signal it might be providing investors.
- Bottom Line: Bitcoin and the broader crypto market remain subject to the whims of macro variables, but there are early signs of seller exhaustion. We still think it is possible to see a short-term rally in late January, but overall maintain that monetary tightening might continue to present choppy waters for crypto through Q1 and into Q2. As more supply shifts to long-term holders, this is a wise time for the long-term Bitcoin investor to accumulate. As outlined below, we think there is a convincing macro thesis for Bitcoin and crypto to thrive in 2022, despite near-term risks.
Macro Mania
Consistent with the past several weeks, macro headlines have dominated the discourse surr...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...
Articles Read 1/1
🎁 Unlock 1 extra article by joining our Community!
You’ve reached your limit of 1 free monthly articles. Please enter your email to unlock 1 more articles.
Already have an account? Sign In 6c70be-345b66-e0a669-5d8386-7d22b5
Already have an account? Sign In 6c70be-345b66-e0a669-5d8386-7d22b5