Adding ETH Beta (Core Strategy Rebalance)
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:
Fed Funds Futures Showing More Cuts:
Oil prices nearing YTD lows likely assisted in alleviating near-term concerns about inflation reigniting.
With the weekend approaching and no critical macro data expected until Wednesday (CPI), barring any geopolitical surprises, we recommend leaning into the currently favorable market conditions within crypto. This environment appears especially conducive to weekend trading.
Of note, ETH has shown significant strength over the past couple of days, rallying above $4,000—a level it hasn’t sustained in some time.
Last week, we highlighted how conditions and flows in traditional markets (CME basis, ETF flows, small-cap tech outperformance) pointed to strong risk/reward for ETH, and this thesis appears to be playing out.
Small Cap Tech Outperformance:
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