Coinbase: It’s worth owning some COIN
A lot happened this week. Bitcoin hit new ATH’s and crypto is showing signs of market rotations. Our current views on the crypto market are the following:
- Crypto bull market cycle intact
- Bitcoin valuations haven’t peaked
- Macro picture mixed but favorable
- Crypto cooling off would be heathy
- Institutions more cautious on crypto
- Signs of retail money entering picture
- Still favor buying GBTC over spot Bitcoin
- Still see Ethereum outperforming Bitcoin
- Size leadership shifting to retail midcaps
- Exchange tokens to DeFi sector rotation
We want to give folks a sense what we’re seeing in the market broadly but we’re not going to go into the above this week. Instead, we’re going to focus our note on our thoughts about the Coinbase public offering.
Coinbase (COIN) went public via a direct listing on Wednesday. This was the most highly anticipated crypto industry offering of the year.
In some senses, it went very well. The company technically traded up ~30% from the reference price of $250 and closed at $332 on the day. During the day, COIN shares hit a high of $429 giving the company a market cap that briefly surpassed the $100B mark.
But in another sense, I think the COIN offering tells us something else very interesting about the market – institutions may be getting more cautious on crypto for...Reports you may have missed
CORE STRATEGY Most of the risks that prompted us to turn cautious in early February still persist, so we believe it’s right to remain patient. However, the near-term (2–4 weeks) setup is starting to look compelling for a tactical rally as sentiment is miserable, liquidity conditions are improving on the margin, a lot of risk has already been priced in, and we’ve seen serious capitulation and deleveraging. All eyes will...
MSTR Reloading Presents Opportunity for Bounce, But Broader Picture Remains the Same
CORE STRATEGY There is a chance that MSTR flows spark a short-term bounce here, but assets further out on the risk curve continue to face headwinds from ongoing uncertainty surrounding trade and monetary policy. Although the current administration takes a pro-crypto stance, there appears to be no immediate catalyst to revive market enthusiasm. We still anticipate that crypto will outperform this year, but until we see further progress on trade/monetary...
CORE STRATEGY With lingering trade war talks and robust economic data dissuading a dovish Fed pivot, we think the potential for downside volatility remains elevated. While regulatory developments and institutional adoption continue to bolster the medium- to long-term outlook, no immediate “good news” seems likely. Nevertheless, we still expect crypto to outperform this year. Until we see flows return to crypto, raising cash/trimming altcoin positions appears prudent (BTC dominance higher)....
CORE STRATEGY With the looming threat of an escalating trade war and economic data robust enough to discourage a more dovish Fed stance, we believe the upside risk for the DXY and yields has increased in Q1. Moreover, the market remains highly volatile and headline-driven, inhibiting the crypto market from gaining meaningful momentum. While regulatory developments are a key medium- to a long-term tailwind for crypto, it is unlikely that...