Taking Some Chips Off the Table (Core Strategy Rebalance)
Tackling the Debt Ceiling Risk
Net Liquidity Refresh
A major theme of this year has revolved around the shifting landscape of global liquidity. Stimulus measures from central banks like the People's Bank of China (PBOC) and the Bank of Japan (BOJ), along with a unique domestic liquidity situation where the Fed is technically performing Quantitative Tightening (QT), but their efforts are counterbalanced by a declining Treasury General Account (TGA) and a fluctuating Reverse Repurchase Facility (RRP), have provided a significant tailwind for bitcoin and the broader crypto ecosystem.
Source: Fundstrat, TradingView
In January, in our note entitled Hitting the Debt Ceiling and the Buy Button, we discussed the implications of the debt ceiling for U.S. liquidity and its potential impact on bitcoin. We emphasized that bitcoin's primary value comes from its resistance to censorship rather than its strict adherence to a capped supply. We also explored how bitcoin performs relatively well during periods of loosening monetary conditions and contracts during periods of tightening monetary conditions.
We highlighted the importance of understanding the relationship between the Treasury General Account (TGA), the Reverse Repurchase Facility (RRP), and private market liquidity...Reports you may have missed
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CORE STRATEGY Our base case assumes that the macro environment will remain accommodative for crypto through year-end. However, in light of recent market action, we remain alert for signs of a local top (not a cycle top). That said, it is difficult to justify a risk-averse stance at this stage and think it is right to lean into this altcoin rally. Source: TradingView, Fundstrat Source: TradingView, Fundstrat STRONG DOLLAR +...
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