Hawks Start to Circle

Dec 16, 2021 • 7 Min Read

Key Takeaways

  • The Fed announced an expedited tapering of monetary stimulus and anticipates three rate increases in 2022. We discuss the implications.
  • Based on recent price action, BTC still behaves more like a high-beta tech stock than an asset designed to offset the effects of inflation.
  • This week, SOPR broke through to profitable territory. Short-term SOPR is lagging, which signifies that the market may need to shake out a few more "paper hands" before marching onward.
  • At the time of writing, the total illiquid supply of Bitcoin is at an all-time high. Notably, 76% of the total circulating supply of Bitcoin is now in the hands of illiquid entities (“diamond hands”).
  • On Monday, Bitcoin reached a significant milestone as 90% of the total Bitcoin supply has now been mined.
  • Bottom Line – While we continue to monitor Bitcoin's price action to confirm a breakout to the upside, we maintain a constructive outlook on the leading cryptoasset. Additionally, we still see the potential for Ethereum outperformance and view our altcoin baskets as an opportunity for those venturing further out on the risk curve.

Investors Buy the FOMC News

Last week, we noted that despite recent liquidations, investors should maintain a constructive outlook on Bitcoin and the broader cry...

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