Remaining OPtimistic

Aug 24, 2023 • 10 Min Read

How We Got Here

Looking back over the past month, we found ourselves stuck in unusual stasis. Macro risks were escalating, and negative seasonality was taking effect, while at the same time, the potential for positive industry-specific tailwinds were knocking on the door. This strange equilibrium led to a decoupling from macro variables, with volatility approaching historical lows.

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Our near-term bullish view was predicated on one or both of two things coming to fruition: either (1) liquidity conditions would bottom out (with rates rolling over, DXY declining, and central bank liquidity turning higher), or (2) industry-specific catalysts would emerge (such as a Grayscale verdict, official approval of an ETH ETF, or BTC ETH approval).

Unfortunately, last week the market broke free from its stasis, shifting to the downside. This move was spurred by an overleveraged market that had been waiting for one of the two possible relief scenarios to materialize.

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The situation was exacerbated by $1 billion in liquidations. And although we received an article from Bloomberg suggesting that the SEC was set to greenlight an ETH futures ETF, it appears that confirmation from the regulatory body itself will be needed before this ...

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