Digital Assets Weekly: July 8th
Market Analysis
After briefly falling below its persistent $9,000 support level on Sunday, Bitcoin finished the 7 days ending 7/6 at $9,375; up 1.7% on the week. Volatility over the past 7 days has been exceptionally low with Bitcoin trading between a low of $8,977 and a high of $9,375.
Bitcoin remains firmly ahead of gold as the best performing asset class on a YTD basis.
Bitcoin Cash led all other major crypto assets this week by 3% - 6% with a 7.5% return on the week.
FS Crypto FX 40 was the best performing index last week gaining 9.4% and outperforming all other size-based indices by 4% - 6%. Major contributors to the FS Crypto FX 40 index outperformance were Cardano (+26%), Chainlink (+16%) and Iota (+15%)
The table below shows the returns of the largest assets and the FS Size Indexes over the year.
Fundamental Valuations
Bitcoin’s P/CMR valuation stood at 9.2x as of 7/6 vs 9.1x as of last week. This value remains slightly below the levels from Mar-19 through present.
Bitcoin’s market cap to realized value (MV/RV) multiple was unchanged week over week at 1.6x.
The comp table for major crypto asset prices and fundamental valuations is shown below.
Valuation Methodology
The P/CMR ratio i...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...
