Flight to Quality
The Bid We’ve Been Waiting For
Last week, we painted a picture of a market on the cusp of a potential rally. Our thesis hinged on a confluence of favorable factors: a local peak in rates, a possible global liquidity turnaround, and encouraging seasonality trends. However, the market remained largely inert, a phenomenon we attributed to the uncertainty surrounding the SEC's potential stance on Grayscale. The market had been in a holding pattern, with high-volume BTC traders preferring GBTC over spot BTC to mitigate directional price risk, likely also hedging their bets by shorting the futures market.
GBTC and ETHE Rallies
This week marked a notable shift. Both GBTC and ETHE witnessed impressive rallies, with GBTC's discount momentarily dipping to 8% before rebounding to the 12-14% range. The market seemed to finally respond to the catalysts we identified, breaking the inertia, and injecting fresh buying interest into the spot BTC market.
Bitcoin too played its part, rallying in the overnight hours of Sunday to crest above $28,000, a significant level that aligns with its 200-day moving average. This level also holds psychological importance, acting as a trading fulcrum around which market sentiment tends to pivot.
In a dramatic twist, a spurious tweet from Co...Reports you may have missed
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Adding RON and IMX As a Different Flavor of ETH-beta and Gaming Exposure (Core Strategy Rebalance)
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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...
FLOWS BEGET MORE FLOWS We have recently discussed the potential return of crypto being correlated with equities due to the new category of market participants entering the fold. However, price action this week suggests that inflows into the BTC ETFs may be throwing water onto that theory. It seems apparent that, at least in the near-term, that the ETF flows narrative is gaining steam, and it is likely that the...
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