Bank Run (Core Strategy Rebalance)
Most significant Banking Failure Since the GFC
Our clients know the rationale behind our bullish perspective on crypto this year. Consumer prices are broadly trending lower, peak-tightening occurred last year (on a rate-of-change basis), and global liquidity conditions have been more favorable than many anticipated. We also felt comfortable that most of the “forced selling” from market participants exiting the ecosystem was behind us.
Unfortunately, over the past few weeks, economic data became hotter than expected, and Fed Chair Powell was more hawkish in his discourse. As a result, rates did not abate nearly as fast as we had anticipated. In fact, the US 2Y hit its highest level in over 15 years, and the futures market repriced the expected hike at the March FOMC meeting from 25 bps to 50 bps (note: this chart is as of premarket hours on Wednesday, and the futures market has since reversed course a bit).
Further, the liquidity injections from the PBOC and BOJ were paused.
Reports you may have missed
INFLOWS RESUME On Monday, market sentiments were rattled by a surprisingly strong manufacturing PMI figure, marking the first expansionary reading in 18 months. This led to a rise in rates, with risk assets across the board experiencing selloffs amid renewed inflation concerns and fears that the Federal Reserve might need to implement further measures to cool the economy. However, in our crypto comments video on Tuesday, we outlined a couple...
Adding RON and IMX As a Different Flavor of ETH-beta and Gaming Exposure (Core Strategy Rebalance)
MARKET SHRUGS AT HOT CPI The latest Consumer Price Index (CPI) data indicated a hotter inflationary environment than forecasted for February. Despite the surprise in the numbers, market participants appeared largely unmoved, suggesting that the potential impact had already been factored into their calculations prior to the release. This resilience reflects a broader sentiment that a rates-driven selloff, in response to the CPI figures, is not a significant near-term risk....
RESEND: Bitcoin ETF Equilibrium Price Dynamics: ETF likely to drive significant rise in daily demand
BY POPULAR DEMAND, WE ARE RE-SENDING THIS BITCOIN PRICE IMPACT OF SPOT ETF REPORT FROM JULY 24, 2023 The Bitcoin spot ETF was finally approved. And we are seeing the surge in price of Bitcoin because of attractive supply and demand dynamics.We received multiple requests to resend this report from July 24, 2023 which looked at supply and demand dynamics if a spot ETF was approved.In short, we believe a...
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