Taking Some Chips Off the Table (Core Strategy Rebalance)
Tackling the Debt Ceiling Risk
Net Liquidity Refresh
A major theme of this year has revolved around the shifting landscape of global liquidity. Stimulus measures from central banks like the People's Bank of China (PBOC) and the Bank of Japan (BOJ), along with a unique domestic liquidity situation where the Fed is technically performing Quantitative Tightening (QT), but their efforts are counterbalanced by a declining Treasury General Account (TGA) and a fluctuating Reverse Repurchase Facility (RRP), have provided a significant tailwind for bitcoin and the broader crypto ecosystem.
Source: Fundstrat, TradingView
In January, in our note entitled Hitting the Debt Ceiling and the Buy Button, we discussed the implications of the debt ceiling for U.S. liquidity and its potential impact on bitcoin. We emphasized that bitcoin's primary value comes from its resistance to censorship rather than its strict adherence to a capped supply. We also explored how bitcoin performs relatively well during periods of loosening monetary conditions and contracts during periods of tightening monetary conditions.
We highlighted the importance of understanding the relationship between the Treasury General Account (TGA), the Reverse Repurchase Facility (RRP), and private market liquidity...Reports you may have missed
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...
BTC ETFS SEE MASSIVE INFLOWS: IS CRYPTO NATIVE CAPITAL SIDELINED? BTC ETFs saw over $2.2 billion in net inflows across all spot ETFs from Monday through Wednesday of this week—the largest three-day sum of inflows since the products launched in January—bringing the five-day moving average to north of $500 million. This is certainly impressive and speaks to the explosive breakout we have seen this week. Source: Farside Investors, Fundstrat We've...
