Grayscale Victory Aligning with Increase in Global Liquidity
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.
In the wake of this news, cryptoassets, trusts, and crypto equities experienced a strong rally on Tuesday. This development will likely pave the way for a Bitcoin ETF to enter the market and could lead to the conversion of existing trusts into ETF products. The discounts to NAV on GBTC and ETHE both shrank substantially following the announcement.
It's crucial to note that this ruling does not automatically greenlight a Bitcoin ETF. Instead, it invalidates the SEC's initial reasons for rejecting Grayscale's application for a spot Bitcoin ETF. Now, the SEC is mandated to reevaluate Grayscale's application. From what we currently gather, they have four options:
Identify another rationale for denying the spot Bitcoin ETFs Appeal ...Reports you haven't read
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
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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...
MARKET BREADTH EXPANDING The crypto market is exhibiting signs of increased breadth, particularly noticeable as altcoins, typically further out on the risk curve, begin to attract more interest. As illustrated in the data below, the total market cap for altcoins (including stablecoins) is advancing towards its previous year-to-date high. ETH has not yet seen a substantial rally, but it appears to have established a potential near-term bottom against BTC. This...
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