Crypto Strategy
244 Results
Following our recommendation on Thursday afternoon for a short-term tactical trade on AVAX, the asset experienced a promising rally to nearly $12, marking a robust 30% rebound from its recent lows. However, in the overnight hours, a critical development emerged: Stars Arena, the SocialFi app that catalyzed recent AVAX activity, appears to have been compromised. The price of AVAX has since returned to just above our initial entry point. It's...
WHAT HAPPENS WHEN BONDS HAVE A HIGH EMISSIONS SCHEDULE Traditional markets have undeniably faced a whirlwind of volatility over the past week. The bond market continued its recent trajectory with the long end of the yield curve soaring to new multi-decade highs. At one juncture, the 30-year yield even brushed against the 5% mark, a development that has rattled both bond and equity investors. Concurrently, the DXY index maintained its...
ETHTFS COMING TO A BROKERAGE ACCOUNT NEAR YOU Thursday marked a broad-based rebound in equities and crypto, with a modest bounce in the bond market tagging along. This crypto rally received an extra push from some noteworthy developments. Our flash insight on Thursday morning highlighted Bloomberg’s Eric Balchunas' commentary, suggesting a high likelihood that the SEC would greenlight ETH futures ETFs this week due to the imminent government shutdown, which...
RATES SURGE ON HIGHER FOR LONGER As expected, Fed Chair Powell took to the podium yesterday and kept interest rates unchanged. Concurrently, he unveiled the Fed’s new dot plot, which forecasts one more rate hike for this year but two fewer cuts for the next year. This was perceived as more hawkish than anticipated by both traditional and crypto markets. The dot plot and Powell's rhetoric collectively signal a 'higher...
TACTICAL CAUTION Throughout this year, we've been navigating a complex interplay between overarching macro influences and crypto-specific events. Milestones such as BlackRock's ETF application, Ripple's legal win over the SEC, and Grayscale's similar success have been promising, yet they've occurred amidst a peak in global liquidity. This timing has effectively curtailed any long-lasting bullish momentum in the crypto markets. While we've been vocal proponents of maintaining risk exposure, the convergence...
THE US DOLLAR WRECKING BALL CONTINUES Last week, our near-term outlook remained uncertain, though we leaned toward the possibility that a positive catalyst, such as a victory for Grayscale, could coincide with easing liquidity conditions. This would mark a significant departure from the tightening conditions—indicated by the DXY—that followed the last two crypto-specific catalysts this year. The likelihood of interest rates reaching a peak, the dollar beginning to decline, and...
GRAYSCALE VICTORY As recently discussed, we’ve been awaiting either short-term relief in liquidity conditions—indicated by falling interest rates, a declining DXY, and increasing central bank liquidity—or the realization of crypto-specific catalysts for better price action. This week, we received encouraging news on both fronts. The courts have ruled that the SEC acted in an arbitrary and capricious manner when denying the spot Bitcoin ETF. _Source: Court Decision in Grayscale v...
MACRO HAS BEEN WINNING THE BATTLE Last week, we advanced the idea that the recent decline in volatility might be traced to two competing forces: (1) positive industry-specific tailwinds and (2) negative macro headwinds. Additionally, the recent dip in macro correlations could be attributed to unique catalysts, notably the BlackRock ETF application. Our thinking was that without further industry-specific catalysts, traditional macro correlations would likely return. As evidenced by the...
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...