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, an...Reports you may have missed
CORE STRATEGY: REMAINING TACTICALLY CAUTIOUS, TGA RUNDOWN + EARLY JAN FLOWS COULD PRODUCE NEEDED SPARK In our view, this cycle is far from over. However, until bonds find a bottom and the USD peaks, it’s prudent for more tactically-minded crypto investors to remain nimble and ready to capitalize on opportunities once a trend reversal is confirmed. While this could happen as early as next week due to early-January inflows, additional...
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CORE STRATEGY Our base case assumes that the macro environment will remain accommodative for crypto through year-end. However, in light of recent market action, we remain alert for signs of a local top (not a cycle top). That said, it is difficult to justify a risk-averse stance at this stage and think it is right to lean into this altcoin rally. Source: TradingView, Fundstrat Source: TradingView, Fundstrat STRONG DOLLAR +...
Today's employment numbers broadly met investor expectations, placating a nervous market. Risk assets rallied, aligning with our view that yesterday's de-risking would not persist through today. Yields continued their downward trajectory, and Fed funds futures also declined, reflecting the market's adherence to the Fed's dovish messaging. Yields Falling: Source: TradingView Fed Funds Futures Showing More Cuts: Source: TradingView Oil prices nearing YTD lows likely assisted in alleviating near-term concerns about...
