Crypto Strategy
211 Results
REGULATORY THREATS MORE BARK THAN BITE (TO ASSET PRICES) Last week we discussed that more regulatory actions would be coming – and they certainly were. On Monday morning, Paxos was ordered to shut down its services surrounding Binance’s BUSD stablecoin on the grounds that it might be deemed a security. There were worries that there would be additional regulatory action against other centralized stablecoin issuers, but as the week progressed, it...
KRAKEN DOWN ON STAKING AS A SERVICE On Wednesday, Brian Armstrong, the CEO of Coinbase, tweeted that he heard rumors that the U.S. Securities and Exchange Commission (SEC) might ban retail investors from engaging in cryptocurrency staking. In his tweet, he expressed concern about this possibility and said that he believes it would be a terrible path for the U.S. if that were to happen. Then on Thursday, Kraken, another...
GOLDEN CROSS APPROACHES The golden cross is a commonly used technical indicator. It is characterized by the intersection of two moving averages, where a short-term average crosses above a long-term average. The most commonly used moving averages are the 50-day and 200-day. This crossover pattern is widely interpreted as a signal of a potential trend reversal from bearish to bullish, suggesting an upward momentum in the asset's price. As demonstrated...
BACK TO LIFE If you were 100% deployed on January 1st and decided to lock in your returns for the year, frankly, we wouldn’t blame you, especially not after the carnage witnessed last year. However, as we discussed last week, we view this current rally as a sign of more opportunities to come and are excited to help our clients navigate the crypto market in 2023. The choppy, directionless crypto...
ANNUAL OUTLOOK RECAP Yesterday, we held our annual outlook call, in which we discussed the carnage of 2022 and reasons to be optimistic about 2023. Below are some highlights, but we invite you to review the entire deck and watch the webinar. BOTTOM IS IN FOR THE MAJORS We think that the majors have seen their absolute cyclical lows. This rationale is supported by (1) the nature, magnitude, and duration...
CARNAGE GIVES WAY TO INDIFFERENCE There are few cohorts of people more excited to turn the page to a new year than crypto investors. After nearly 12 months of unwinding leverage, we have finally reached a point in the cycle where indifference has crept into the market, as demonstrated by the continued decline in volumes and realized volatilities. Aggregated ETH volume is the best proxy for trading activity in crypto....
ONTO NEXT YEAR Our last weekly strategy note of the year is going to be a brief one. I want to thank everyone for turning to us for timely and actionable research on crypto throughout this year. It was undoubtedly a trying time for the industry. We witnessed a period of reckoning that will leave the space better off over the long term. We will be back in the new...
DCG UPDATE _LEVERAGE UNWIND RECAP_ Clearly, the most challenging part of analyzing cryptoassets this year has been the opaque parts – the lending, borrowing, trading, and siphoning of assets that have occurred off-chain. This year, we have seen a deleveraging event throughout the global crypto market spurred on by the centralized elements of crypto. First, we saw the de-pegging of UST and the incineration of $50 billion in market value...
REALIZED CAP HIGHLIGHTS CONTINUED OUTFLOWS Realized capitalization is an important metric we have frequently referenced in prior notes. It values the network based on the price at which each bitcoin was last exchanged. It is a way to calculate the overall cost basis of all BTC holders and, consequently, is a useful measure of flows into and out of the bitcoin network. As one might expect, this year has witnessed...
ADJUSTING TO A POST-FTX WORLD A couple of weeks ago, we discussed several critical risk vectors remaining in the market and provided our take on each matter. Our near-term view was that it was more likely than not that most of the contagion from the implosion of FTX had been sifted through, but due to the unknown status of Digital Currency Group, investors might not be getting paid enough for...
MAPPING POSSIBLE CONTAGION Recently, we have discussed the risk of further drawdowns from the fallout from FTX as the reason for not being too aggressive at these admittedly favorable long-term entry levels. In this week’s note, we wanted to further unpack a few areas of the market where contagion could be lurking. Below is a fascinating graphic compiled by Bloomberg that maps SBF’s exposure throughout the crypto and traditional financial...
A FLOCK OF BLACK SWANS Unless you have been off the grid for the past week, you likely are familiar with the shockingly abrupt implosion of FTX. For those just entering the fold, to make a long story short – Sam Bankman Fried (SBF) allegedly stole an estimated $4 billion of customer deposits for Alameda, the fund in which he has a significant ownership stake. Alameda subsequently lost these funds,...
