Crypto Weekly (Sept. 11th, 2019)
Weekly recap...
- Ahead of the Bakkt launch on 9/23, the Fed Chair Powell piled on to the negative sentiment currently permeating crypto-markets.
- Network data monitoring tools have improved significantly over the past year — a big plus for data transparency in the space.
- Our model suggests total breakeven BTC mining cost = $8500; cash breakeven cost = $7300.
Center Story
1. Fed's critcism of crypto overshadows first stage of Bakkt product launch
On the same day Bakkt began accepting deposits and withdrawals (last Friday, September 6), Jay Powell was in Zurich where he expressed skepticism on behalf of the Fed towards the viability of and demand for cryptocurrencies.
Recently it seems like good news helps less than bad news hurts. Still, the Bakkt launch at the end of this month is a very good development in the markets for improving price discovery.
What else to know...
Bakkt's futures product launches September 23. Trading hours: 8:00 PM - 6:00 PM (next day) EDT; daily settlement window between 4:58 PM and 5:00 PM.The contract size = 1 BTC with a minimum price fluctuation of $2.50 per bitcoin ($2.50 per contract).Block trades may be executed at $0.01 per Bitcoin ($0.01 per contrac...Reports you may have missed
CORE STRATEGY: FOCUS ON MAJORS, KEEP HEAD ON SWIVEL UNTIL BONDS/DXY RELENT We think it's right to expect a bounce into year-end, potentially starting tomorrow if PCE data comes in soft. In our view, this cycle is far from over, but until bonds find a bottom and the USD tops, it’s likely best for the more tactical investor to stay nimble and prepared for opportunities upon confirmation of this trend...
CORE STRATEGY Our base case assumes that the macro environment will remain accommodative for crypto through year-end. However, in light of recent market action, we remain alert for signs of a local top (not a cycle top). That said, it is difficult to justify a risk-averse stance at this stage and think it is right to lean into this altcoin rally. Source: TradingView, Fundstrat Source: TradingView, Fundstrat STRONG DOLLAR +...
Today's employment numbers broadly met investor expectations, placating a nervous market. Risk assets rallied, aligning with our view that yesterday's de-risking would not persist through today. Yields continued their downward trajectory, and Fed funds futures also declined, reflecting the market's adherence to the Fed's dovish messaging. Yields Falling: Source: TradingView Fed Funds Futures Showing More Cuts: Source: TradingView Oil prices nearing YTD lows likely assisted in alleviating near-term concerns about...
INDICATIONS OF FROTH Given the violent nature of the past month’s rally, we have been vigilant for signs of a local top. It would be disingenuous to claim that some qualitative "top signals" are not flashing right now. XRP—which we noted as a possible election trade back in October—with only 1–2k daily active addresses (vs ETH's over 400k, source: Artemis), is ripping toward new highs while influencers take to TikTok...