Crypto Weekly (Sept. 11th, 2019)
Weekly recap...
- Ahead of the Bakkt launch on 9/23, the Fed Chair Powell piled on to the negative sentiment currently permeating crypto-markets.
- Network data monitoring tools have improved significantly over the past year — a big plus for data transparency in the space.
- Our model suggests total breakeven BTC mining cost = $8500; cash breakeven cost = $7300.
Center Story
1. Fed's critcism of crypto overshadows first stage of Bakkt product launch
On the same day Bakkt began accepting deposits and withdrawals (last Friday, September 6), Jay Powell was in Zurich where he expressed skepticism on behalf of the Fed towards the viability of and demand for cryptocurrencies.
Recently it seems like good news helps less than bad news hurts. Still, the Bakkt launch at the end of this month is a very good development in the markets for improving price discovery.
What else to know...
Bakkt's futures product launches September 23. Trading hours: 8:00 PM - 6:00 PM (next day) EDT; daily settlement window between 4:58 PM and 5:00 PM.The contract size = 1 BTC with a minimum price fluctuation of $2.50 per bitcoin ($2.50 per contract).Block trades may be executed at $0.01 per Bitcoin ($0.01 per contra...Reports you haven't read
CHALLENGING THE ACCUSATIONS OF FROTH Amidst the recent sharp rally in the crypto market, investors who weathered the prolonged bear market are understandably cautious, keeping a close watch for any signs of excess. Despite the violence in the most recent rally, we believe it's too early to declare the market as overbought. Our assessment is based on several factors:Perpetual futures data indicates a relatively modest level of long speculation, especially...
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...
Binance Enforcement Provides Dip-Buying Opportunity as Global Liquidity Continues to Improve
BINANCE RISK MITIGATED One of the most significant idiosyncratic risks in the crypto market has been the uncertainty surrounding Binance and potential action from the Justice Department against the world's leading exchange. Earlier this year, we anticipated that any disciplinary actions would likely involve criminal charges against Changpeng Zhao (CZ) and a fine against the exchange. From our September note: _Source: Fundstrat_ Today, these views were realized. CZ appeared in...
MARKET PRICES IN RATE CUTS The key macro event this week was the release of the October CPI data, which came in notably cooler than anticipated. The year-over-year CPI was slightly lower at 3.2%, just below the predicted 3.3%, while the month-over-month figure remained steady at 0.0%, in contrast to the expected 0.1%. This cooler inflation data spurred a surge in equity indices. It also bolstered investor confidence in the...
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