Apolitical Money
Geopolitical Noise
After briefly eclipsing $45k and $3.2k, both bitcoin and ether tumbled on Friday afternoon following indications from the US government that a Russian invasion of Ukraine was imminent. On Tuesday, these fears were quelled when reports surfaced indicating that troops were being removed from the Ukrainian border and crypto rebounded alongside equities.
At the time of writing, the global crypto market is slightly lower on the 7-day chart, with altcoins furthest out on the risk curve still trailing currencies.
Crypto-Natives Find a Safe Haven in Bitcoin
Despite persistent volatility seemingly contrary to its store-of-value premise, bitcoin generally performs “less bad” than other crypto assets during turbulent times. Thus, many crypto natives increase exposure to BTC during times of market consolidation or uncertainty. As expected, Bitcoin dominance has ticked up recently, surpassing 43% for the first time in three months.
Increased Demand for Apolitical Money in the Developed World
We have previously discussed how Bitcoin is viewed as two different asset-types by two very different cohorts of investors. In the developing world, some economies suffer from local inflation well north of the 7.5% in ...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...