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 may have missed
BUYERS ON STRIKE Last week, we discussed our immediate-term cautious approach to the crypto market, highlighting recent geopolitical tensions, tax-related selling, negative fiscal flows, and the persistent rise in real yields as reasons for a more risk-averse positioning (albeit relative, as holding 7.5% in cash and the rest in crypto is hardly considered risk-averse in most circles). This uncertainty has persisted into this week, evidenced by what we consider an...
Fiscal Dominance, Flows from China, Plus Some Thoughts on Global Conflict (Core Strategy Rebalance)
WHAT BTC SHRUGGING OFF CPI SAYS ABOUT CURRENT FISCAL SITUATION The most significant piece of macro data this week was the CPI. Headline CPI registered at 3.5%, surpassing the anticipated 3.4%, while core CPI remained steady from last month at 3.8%, also above the expected 3.7%. This increase was largely attributed to rising costs in auto insurance and shelter. Consequently, interest rates saw a sharp rise, with the 10-year Treasury...
INFLOWS RESUME On Monday, market sentiments were rattled by a surprisingly strong manufacturing PMI figure, marking the first expansionary reading in 18 months. This led to a rise in rates, with risk assets across the board experiencing selloffs amid renewed inflation concerns and fears that the Federal Reserve might need to implement further measures to cool the economy. However, in our crypto comments video on Tuesday, we outlined a couple...
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