Digital Assets Weekly: March 20th, 2020
Summary
Market Analysis:
- Crypto markets rallied off last week’s lows.
Portfolio Strategy:
- The risk / return profile looks attractive at these levels.
Winners & Losers
- Winner: The Steem community who is taking a stand against Tron founder Justin Sun.
- Loser: MakerDAO token holders who are getting diluted due to poor performing loans.
Weekly Rant:
- BitMex going down for maintenance makes me cringe, but it may have been for the better.
Financing Activity:
- Bakkt, Argent, Phemex, and GrainChain are among projects that raised funding this week.
Recent Research:
- Robert Sluymer: Crypto Technical Analysis: BTC collapses but holds 200-week sma, ETH vs BTC holds .22
- David Grider: Crypto Market Update
- Ken Xuan: Crypto Quant: Benchmark Crypto Indices Weekly Performance Review
Market Analysis
Bitcoin’s price has sold off significantly over the past few weeks and has now started to bounce off the bottom we saw last Thursday. The chart below from Rob Sluymer, Fundstrat’s Chief Technical Strategist gives you a sense of where we’ve been.
Bitcoin has rallied off the prior week’s lows and finished this week (3/12/20 to 3/19/20) up 25%, partially recovering earlier month losses, ...
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...
