Crypto Strategy

CORE STRATEGY Source: Fundstrat Note: Our equities baskets are not risk-managed/rebalanced in the same way that our Core Strategy is. Source: Fundstrat CRYPTO AND GEOPOLITICAL RISK PREMIUM First and foremost, we acknowledge the human cost of these events and express deep sympathy for all those affected. That said, our role is to analyze crypto market implications, and we will continue to do so. Rising geopolitical conflicts are almost always initially...

QUICK MACRO THOUGHTSIt’s a confusing time for crypto investors. Equities seemed poised for fresh all-time highs while crypto is stuck in neutral and has lagged stocks for weeks.Corporates are still raising capital aggressively to accumulate liquid crypto.The majors sit at tough resistance: BTC faces heavy supply in the 105–110k zone, ETH is pinned under its 200-day, and SOL is dealing with the exogenous pressures discussed later on in this note.Stocks...

CORE STRATEGY Crypto’s recent underperformance relative to equities, coupled with a sharp BTC-SPX correlation breakdown, is a data point worth watching. We’re not rushing to de-risk, but we are monitoring the setup closely. The trade war legal saga has injected more uncertainty into markets but is also likely to result in a less aggressive tariff regime. This is disinflationary in the near-term, may widen the deficit further, but could challenge...

CORE STRATEGY Crypto continues to benefit from supportive conditions, and the near-term setup favors continuation. A new golden cross has been triggered for BTC, with post-2020 signals showing an 83% 90-day win rate and a 19% median return. FTX creditor repayments, totaling $5 billion, are underway and may recycle capital back into crypto markets, boosting risk appetite. Flows remain strong. ETF demand is steady, the Coinbase premium persists, CME basis...

CORE STRATEGY While the market has repriced quite substantially to reflect optimism over trade, we believe further upside could come from ensuing changes in tax and regulatory policy. In the House’s latest bill, more than $4 trillion in tax cuts have been proposed, with just $1.5 trillion in spending reductions. This implies continued fiscal expansion, which is stimulative and, all else equal, positive for crypto. Source: Artemis, Fundstrat CHANGES: INCREASING...

CORE STRATEGY Source: TradingView, Fundstrat While there is no need to “panic chase,” ETH likely begins trading better from here. We should start considering ETH beta names to add if Bessent’s meeting with China this weekend results in a positive outcome. The immediate-term risk/reward is certainly less attractive after BTC’s rally to $103,000 and strong follow-through from altcoins this week, but there are legitimate signs pointing to the U.S. reaching...

CORE STRATEGY Source: TradingView, Fundstrat Source: TradingView, Fundstrat On Wednesday, we received a couple of material data points. The first was the first negative real GDP print since 2022. This spurred an immediate selloff across most assets (interestingly, bonds included) as fears of a tariff-induced recession entered the fold. However, the market’s reaction was brief. Around 10am, core PCE was released and came in line with forecasts. It showed some...

Last week, we wrote that the administration’s response to bond market volatility implied a critical shift in ongoing trade negotiations. While this does not eliminate the economic risks that remain, as investment and hiring decisions are effectively frozen, it does clarify two important points: (1) the administration appears more focused on shifting trade away from China rather than overhauling global trade entirely, and (2) it is aware of market volatility...

CORE STRATEGY Given today’s developments, we believe it will be appropriate to increase exposure in our Core Strategy (total long position from 50% to 75% long and increasing our relative altcoin weighting). That said, given the explosive nature of today’s move and the firm resistance BTC is testing, we think it is prudent to wait for either a retrace or a confirmed breakout before executing. Source: TradingView, Fundstrat BOND MARKET...

Despite improving liquidity conditions and favorable seasonality offering reasons for optimism, the ongoing trade war remains the dominant driver of crypto’s next move. As such, we believe it’s prudent to stay patient. We’re increasing our Core Strategy allocation to USDC to 50%, keeping altcoin exposure minimal as we assess the potential fallout from the Liberation Day tariff announcements. While this may seem discouraging, the roadmap has become more straightforward: we...

While some of the risks that prompted our cautious stance in early February have been partially mitigated, most remain—with the ongoing trade war still the most pertinent. Therefore, we believe it remains prudent to exercise patience. That said, improving liquidity conditions, favorable seasonality, and the possibility of a budget-neutral BTC acquisition strategy offer reasons for optimism. Regardless of the direction, depressed implied volatility (BVIV < 50) suggests that a significant...