Crypto Strategy
235 Results
MACRO HEADWINDS VS. IDIOSYNCRATIC TAILWINDS In our prior notes, we highlighted the market's prevailing sideways trend. Over much of the past month, both BTC and ETH have exhibited remarkable stability, moving within a narrow range. Their realized and implied volatilities are nearing all-time lows. _Sources: Glassnode, Fundstrat_ We've also emphasized the waning correlation between Bitcoin's daily returns and macro assets such as tech stocks and the US dollar index. These...
PAINT DRYING Over the past few weeks, watching Bitcoin’s price action has been akin to watching paint dry. Earlier this week, bitcoin’s 30-day realized volatility reached levels not witnessed since July 2020. I shared the chart below in Wednesday’s market update. I noted that historical data indicates that such drawdowns in volatility often precede significant price movements. Recognizing the importance of this insight, we decided to delve deeper into the...
Bitcoin ETF Equilibrium Price Dynamics: ETF likely to drive significant rise in daily demand
We are attaching our deck on Bitcoin ETF equilibrium price dynamics. Please click here to download. If you have not yet registered for our Crypto Market Update on Tuesday, July 25 at 2pm, please register using the block below. EXECUTIVE SUMMARYBitcoin ETF could finally get approved. Sean Farrell sees the “Blackrock effect” making this far more likely today.Bitcoin ETF likely one of the largest ever launches. Precious metals ETF >...
FINAL THOUGHTS ON RIPPLE DECISION In June, we identified the Ripple case as a possible catalyst for altcoins, as indications of progress for the defendants surfaced. Just last week, Ripple achieved a partial victory, likely benefiting altcoins targeted by the SEC and potentially prompting a shift towards a more legislative approach rather than an enforcement-focused one. _Source: Reuters, Fundstrat_ The court ruled that Ripple Labs' transactions of XRP to institutional...
THE PROBABILITY OF ETF APPROVAL As emphasized in previous notes, we view BlackRock's application for a spot ETF as substantial. Regardless of whether an actual spot ETF garners approval in the near term, its “narrative” significance is undeniable. _YET, OUR FUNDAMENTAL ASSUMPTION IS THAT THIS APPLICATION INDICATES NEW UNDISCLOSED INSIGHTS THAT LARRY FINK AND HIS COLLEAGUES ARE PRIVY TO, WHICH THE PUBLIC MAY NOT BE, AND THEIR APPLICATION WILL ULTIMATELY...
EARLY PROOF OF “CATCH-UP” TRADE Last week witnessed a significant development as traditional market participants, most notably BlackRock, entered the cryptocurrency space with a spot-based ETF application. This move not only carried implications for market structure but also sparked a noteworthy narrative shift. Despite Bitcoin's relative resilience to regulatory pressures compared to other cryptoassets, it still faced some performance drag. However, the entry of BlackRock, Citadel, and other prominent players...
A WEEK OF TABLE-TURNING DEVELOPMENTS _ETF SUMMER_ Over the last five years, there have been numerous calls for traditional financial institutions to enter the crypto industry. Once total crypto market cap surpassed the $1 trillion mark for the first time, the industry’s investors, developers, and followers began to discuss how crypto had transformed into an investable asset class and projected a significant influx of institutional investors. Until recently, several signs...
COINS FACE ADDITIONAL TURBULENCE Last week, we seized the opportunity to "buy the fear" in response to the SEC lawsuits targeting major crypto platforms Coinbase and Binance. In our Core Strategy, we decreased our allocation to stablecoins to 10% and lowered our allocation to alts from 17.5% to 7.5%. This turned out to be fortunate timing on our part, as altcoins continued to face significant losses over the weekend. Moreover,...
SEC EMPTIES THE CHAMBER It’s only Wednesday, but the SEC has pulled out the big guns. Conveniently following the release of a rather comprehensive crypto oversight bill by the House Financial Services Committee on Friday, the SEC dropped their mightiest hammer to date on the crypto industry. On Monday, the SEC took legal action against Binance, accusing the exchange of offering unregistered securities to the public. The SEC's lawsuit alleged...
PMIS SHOW SLOWING ECONOMIC GROWTH There was a significant amount of economic data released this week, with particular attention given to the PMI data, which is considered a reliable indicator of economic activity. In May, the manufacturing sector in the US experienced its seventh consecutive month of contraction, as indicated by the Manufacturing ISM Report. The Manufacturing PMI for May was recorded at 46.9, a data point that suggests a...
AI SKEWING THE PICTURE Previous observations highlighted how the decline in crypto prices signaled a temporary liquidity peak, potentially tied to the impending debt ceiling deal. Correlations between BTC, gold, and equities illustrated BTC's sensitivity to liquidity changes. As anticipated, BTC/Gold and BTC/equities (excluding AI-related names) correlations are now strengthening, with gold and equities tracking BTC's lead. Over the past few weeks, our discussions have centered around an observed shift...