Crab Season
Weekly Recap
This week’s price action left much to be desired by those trading in either direction as most major cryptoassets continued to exhibit sideways price action. After briefly falling below $38k on Tuesday, $BTC found a bid and has since recovered, sitting around $40k at the time of writing. Similarly, $ETH is below $3.8k but recovered alongside bitcoin and is once again challenging the $3k level. The rest of the crypto market followed this pattern, but its recovery has lagged. It is clear we are in the midst of a full-fledged crab market[1].
Bitcoin did outperform more speculative alts this week, as web3 and DeFi sectors dipped more than 6%, while currencies fell a mere 1.8%. As discussed, this environment is challenging for altcoins and will continue to be until the macro clouds start to clear.
Catalyst Check – Adoption in Central Africa & Central America
In recent weeks, we have become slightly more risk-averse than usual, primarily due to the impending actions of the Federal Reserve and the near-term uncertainty that it brings risk assets. Thus far, this choppy price action is in line with our expectations for this calendar year, so we are not overly concerned.
This week, several events beyon...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...
