Buying Fear (Core Strategy Rebalance)
SEC Empties the Chamber
It’s only Wednesday, but the SEC has pulled out the big guns. Conveniently following the release of a rather comprehensive crypto oversight bill by the House Financial Services Committee on Friday, the SEC dropped their mightiest hammer to date on the crypto industry.
On Monday, the SEC took legal action against Binance, accusing the exchange of offering unregistered securities to the public. The SEC's lawsuit alleged that Binance had failed to register as a clearing agency, broker, and securities exchange. Additionally, there were accusations concerning the commingling of user funds and the implementation of inadequate financial controls at the exchange (If we had to guess, there will likely be follow-up on this from the DOJ). The SEC further claimed that several tokens, SOL, ADA, MATIC, COTI, ALGO, FIL, ATOM, SAND, AXS, and MANA, should be classified as securities.
Continuing their aggressive actions, on Tuesday, the SEC unleashed its authority on Coinbase with similar allegations. However, it is worth noting that, unlike the Binance case, there were no accusations regarding poor controls (a huge difference). Nevertheless, in line with the Binance lawsuit, the SEC identified SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO as tok...Reports you may have missed
MSTR Reloading Presents Opportunity for Bounce, But Broader Picture Remains the Same
CORE STRATEGY There is a chance that MSTR flows spark a short-term bounce here, but assets further out on the risk curve continue to face headwinds from ongoing uncertainty surrounding trade and monetary policy. Although the current administration takes a pro-crypto stance, there appears to be no immediate catalyst to revive market enthusiasm. We still anticipate that crypto will outperform this year, but until we see further progress on trade/monetary...
CORE STRATEGY With lingering trade war talks and robust economic data dissuading a dovish Fed pivot, we think the potential for downside volatility remains elevated. While regulatory developments and institutional adoption continue to bolster the medium- to long-term outlook, no immediate “good news” seems likely. Nevertheless, we still expect crypto to outperform this year. Until we see flows return to crypto, raising cash/trimming altcoin positions appears prudent (BTC dominance higher)....
CORE STRATEGY With the looming threat of an escalating trade war and economic data robust enough to discourage a more dovish Fed stance, we believe the upside risk for the DXY and yields has increased in Q1. Moreover, the market remains highly volatile and headline-driven, inhibiting the crypto market from gaining meaningful momentum. While regulatory developments are a key medium- to a long-term tailwind for crypto, it is unlikely that...
Developments since the inauguration confirm that the new administration is prioritizing an industry-friendly regulatory environment. Coupled with an easing DXY/yields, a possible TGA spenddown, and favorable seasonality, we think it’s prudent to maintain a long bias. Source: TradingView, Fundstrat Source: TradingView, Fundstrat POWELL MAKES SOME EDITS When the FOMC statement was first released on Wednesday, it carried a distinctly hawkish tilt. The language reflected a more optimistic view on employment...