Pressing Winners (Core Strategy Rebalance)
Rates Due For a Bounce (Maybe)
As the crypto market continues to exhibit strength, and despite eradicating one of the market’s biggest unknowns in Binance just last week, it remains essential to be aware of near-term risks.
Recently, the bond market has experienced a significant rally, and there's been a notable decline in the DXY. Combined with nominal stimulus in Asia, these factors have contributed to a substantial increase in USD global liquidity.
This boost in liquidity has been a driving force behind the expanding breadth in both the crypto market and crypto equities.
Notably, crypto equities began to align more closely with underlying crypto assets when the 10-year bond yield started to decrease.
If interest rates begin to regress to the mean – perhaps on a strong PMI print tomorrow, or ahead of the next Treasury quarterly refunding announcement, we may bear witness to a reduction in market breadth.
Recall that the overemphasis on bills issuance in the October refunding announcement fueled a good portion of the duration rally in late October and early November, and in our view, contributed to the broadening of the rally in crypto.
A resurgence in rates on the long end of the curve could create short-lived headwinds for altcoins and crypto equi...Reports you may have missed
INFLOWS RESUME On Monday, market sentiments were rattled by a surprisingly strong manufacturing PMI figure, marking the first expansionary reading in 18 months. This led to a rise in rates, with risk assets across the board experiencing selloffs amid renewed inflation concerns and fears that the Federal Reserve might need to implement further measures to cool the economy. However, in our crypto comments video on Tuesday, we outlined a couple...
Adding RON and IMX As a Different Flavor of ETH-beta and Gaming Exposure (Core Strategy Rebalance)
MARKET SHRUGS AT HOT CPI The latest Consumer Price Index (CPI) data indicated a hotter inflationary environment than forecasted for February. Despite the surprise in the numbers, market participants appeared largely unmoved, suggesting that the potential impact had already been factored into their calculations prior to the release. This resilience reflects a broader sentiment that a rates-driven selloff, in response to the CPI figures, is not a significant near-term risk....
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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