Digital Assets Weekly: March 6th, 2020
- Crypto markets rebounded modestly this week and remain the best performing asset class YTD.
- Crypto Emerging Markets are influenced by broader financial conditions but its idiosyncratic drivers and macro market cycle mater most long term.
Winners & Losers
- Winner: Tron's founder Justin Sun who executed a hostel takeover of Steem's decentralized social media network.
- Loser: Bitmex after the FCA issued a notice that the firm has been operating in the U.K. without permission.
- Ripple CEO saying Proof of Work (PoW) is a 'Massive Waste' of Energy makes me cringe.
- Arweave raised $8.3M for its permanent internet content storage service.
- AlphaPoint raised $5.6M for its crypto infrastructure business.
- Tom Lee: Tom’s Take on Crypto: Bitcoin Proving to Be a Macro Hedge
- Robert Sluymer: Crypto Technical Analysis: Pullbacks from 50-62% retracement resistance beginning to bottom
- Ken Xuan: Crypto Quant: Crypto Benchmark Indices Performance and Review
Market AnalysisBitcoin rose modestly by 4.5% on the week, partially recovering last week’s losses and bringing its year to date return to 27.6%. Stocks and other risk assets sque...
Reports you haven't read
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...