Raising Some Cash (Core Strategy Rebalance)
We wrote on Thursday about how the reaction to recent macro data has been quite underwhelming. Crypto broadly rallied in response to a cool CPI number, but indicators such as a muted Coinbase premium and low exchange volumes suggest animal spirits are still lacking. Muted volumes relative to market prices, and low social interest as proxied by Google search trends further evidence a lack of risk appetite in the market.
With the above in mind, we are selling some alts within our core strategy to raise cash and position for a potential dip over the next few weeks. To be clear, this is a more tactical view and is more about risk management than positioning for a prolonged bear market. For those that achieve their crypto exposure via equity markets, this would be a good time for the more tactically minded to take some gains in crypto equities, which have rallied quite impressively as of late.
The Muted Response to Falling Rates
Despite falling rates and rate expectations, we have seen BTC on Coinbase trade at a discount to Binance.
We have also witnessed net outflows over the past 5 days, with over $200 million in net outflows occurring yesterday.
Stablecoins are also showing a net inflow over the past 7 days, but this metric is also trending lower.
Source:...Reports you may have missed
BTC DECOUPLING FROM EQUITIES Over the past two weeks, BTC has begun to decouple from other risk assets. While the broader macro environment experienced choppy conditions from November 12th through yesterday, BTC has appeared indifferent to fluctuations in risk appetite, continuing its upward momentum and approaching the $100K milestone. A chart of BTC correlations highlights this decoupling, with sharp declines in its correlation to the QQQ, SPX, and IWM. The...
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
TRUMP MAINTAINS A SLIGHT EDGE, BUT IT’S ESSENTIALLY A TOSSUP Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States. As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations. Odds for both...
BTC ETFS SEE MASSIVE INFLOWS: IS CRYPTO NATIVE CAPITAL SIDELINED? BTC ETFs saw over $2.2 billion in net inflows across all spot ETFs from Monday through Wednesday of this week—the largest three-day sum of inflows since the products launched in January—bringing the five-day moving average to north of $500 million. This is certainly impressive and speaks to the explosive breakout we have seen this week. Source: Farside Investors, Fundstrat We've...
