A View Into ‘22

Key Takeaways

• Macro continues to dominate the crypto discourse as the 90-day rolling correlation between BTC and the BVP Emerging Cloud Index approaches 1.
  
• We discuss our thoughts pertaining to where Bitcoin sits on investors’ risk curves, how it will move to a lower risk bucket in 2022, and why this would be a major tailwind for the asset.
  
• SOPR gives us a view into the profile of recent sellers. Meanwhile, long-term holders continue to accumulate, siphoning supply from “paper hands.”
  
• We investigate the concept of dormancy flow and the bullish signal it might be providing investors.
  
• Bottom Line: Bitcoin and the broader crypto market remain subject to the whims of macro variables, but there are early signs of seller exhaustion. We still think it is possible to see a short-term rally in late January, but overall maintain that monetary tightening might continue to present choppy waters for crypto through Q1 and into Q2. As more supply shifts to long-term holders, this is a wise time for the long-term Bitcoin investor to accumulate. As outlined below, we think there is a convincing macro thesis for Bitcoin and crypto to thrive in 2022, despite near-term risks.

Macro Mania