Don’t Fight Changes in Global Liquidity Conditions (Core Strategy Rebalance)
Regulatory Threats More Bark than Bite (To Asset Prices)
Last week we discussed that more regulatory actions would be coming – and they certainly were.
- On Monday morning, Paxos was ordered to shut down its services surrounding Binance’s BUSD stablecoin on the grounds that it might be deemed a security. There were worries that there would be additional regulatory action against other centralized stablecoin issuers, but as the week progressed, it certainly appeared that this was a Binance-specific issue.
- Later in the week, SEC chair Gensler proposed expanding federal custody requirements to include crypto assets, which would require crypto exchanges to gain regulatory approval and secure certain federal or state registrations. The changes would apply to all client assets, and the amendment includes a requirement for a written agreement between custodians and advisors, as well as enhanced record-keeping rules and surprise examination requirements. The amended regulation would also require that client assets be properly segregated and held in accounts designed to protect them in the event of a qualified custodian bankruptcy or insolvency.
Reports you may have missed
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BTC DECOUPLING FROM EQUITIES Over the past two weeks, BTC has begun to decouple from other risk assets. While the broader macro environment experienced choppy conditions from November 12th through yesterday, BTC has appeared indifferent to fluctuations in risk appetite, continuing its upward momentum and approaching the $100K milestone. A chart of BTC correlations highlights this decoupling, with sharp declines in its correlation to the QQQ, SPX, and IWM. The...
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
TRUMP MAINTAINS A SLIGHT EDGE, BUT IT’S ESSENTIALLY A TOSSUP Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States. As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations. Odds for both...
