Digital Assets Weekly: March 6th, 2020
Summary
Market Analysis:
- Crypto markets rebounded modestly this week and remain the best performing asset class YTD.
Portfolio Strategy:
- Crypto Emerging Markets are influenced by broader financial conditions but its idiosyncratic drivers and macro market cycle mater most long term.
Winners & Losers
- Winner: Tron's founder Justin Sun who executed a hostel takeover of Steem's decentralized social media network.
- Loser: Bitmex after the FCA issued a notice that the firm has been operating in the U.K. without permission.
Weekly Rant:
- Ripple CEO saying Proof of Work (PoW) is a 'Massive Waste' of Energy makes me cringe.
Financing Activity:
- Arweave raised $8.3M for its permanent internet content storage service.
- AlphaPoint raised $5.6M for its crypto infrastructure business.
Recent Research:
- Tom Lee: Tom’s Take on Crypto: Bitcoin Proving to Be a Macro Hedge
- Robert Sluymer: Crypto Technical Analysis: Pullbacks from 50-62% retracement resistance beginning to bottom
- Ken Xuan: Crypto Quant: Crypto Benchmark Indices Performance and Review
Market Analysis
Bitcoin rose modestly by 4.5% on the week, partially recovering last week’s losses and bringing its year to date return to 27.6%. Stocks and other risk assets sque...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...
