Digital Assets in A Post-Cycle World
Our 2022 Digital Assets Outlook presentation covered topics relevant to the current trends and narratives that we typically monitor in the weekly reports. Because of this, we are sending out the presentation for this week in place of the usual weekly format.
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Click HERE for the full copy of this report in PDF format.
On Tuesday, we held our 2022 outlook call. Some of the major highlights include:
A discussion of the significant developments within crypto in 2021 and how they impact the industry's immediate future. Many digital asset investors fear an impending crypto winter. We think that there is sufficient evidence that these fears are remnants of an old paradigm.Historically, crypto has waxed and waned in four-year cycles centered around supply constraints resulting from the Bitcoin halvening. We posit that the four-year cycle is no longer the best way to measure bull and bear crypto markets but rather inflows and demand for blockspace.An often-overlooked element of investing in BTC is the variable liquidity of the market, as some wallets are less likely to liquidate holdings than others. Bitcoin's current supply dynamics can best be described as a powder keg.Bitcoin's current valuation metrics point to a strong buying opportunity c...Reports you may have missed
How the US Could Adopt BTC as a Strategic Reserve Asset, Look for ETH to Bottom Within Next Few Trading Days
POLITICAL PREDICTION MARKETS PROVIDE PARTIAL RATIONALE FOR PAUSE IN RALLY We see the recent pause in the July rally driven by two factors:General Degrossing Across All Asset Markets: The past couple of days have seen degrossing across all asset markets, including the crypto markets. This is less crypto-specific and more of a function of the market rotating out of strategies (like the long MAG 7) that worked in the first...
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...
