Digital Assets Weekly
Please see important disclosures at the bottom of this report
Portfolio Strategy
In our prior note, we indicated that markets could likely see continued strength leading up into the Bitcoin halvening and that’s what we got this week. While my view has not changed since last week, this week I will offer investors 15 observation ahead of the halving.
The picture is not conclusive, but it paints an on balance positive story. Bitcoin still has room to go before reaching our weighted average 12-month price outlook of $14,350, but there’s a good chance the path there is not straight in my view.
We are still looking for prices to rally up into the halvening and will start to look more critically at the market in the immediate days before and weeks after for any signs of weakness. Based on current market conditions, we would not be surprised to see Bitcoin reach the $10k level before the event, and possibly have some retracement after.
Investors will recall that $10k was the highest probability market outlook scenario we published for Bitcoin back on March 17th after the sell off when prices sat around $5,400. While we’ve gotten here quite quickly:
Market Recommendations: With all of this in mind, our outlook for Bitcoin over the next 12 months and recommende...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...
