Valmar Capital Update (Issue #64)
On A Serious Note:
Volumes: Volumes experienced a pick-up week over week with most of it concentrated in BTC and altcoins. 7D ADV for spot BTC and ETH measured $11.7B (+18.7% w/w) and $5.8B (+5.0%). Futures volume told a similar story, with7D ADV for BTC and ETH futures measuring $62.0B (+31.7%) and $21.4B (+7.9%).
Volatility: 30D IV on BTC and ETH are slowly ticking up from its previously depressed levels during the summer. 30D IV on BTC and ETH measure at 56% and 60%, respectively.
BTC and ETH Price: This past week has seen BTC rally to test the underside of $69,000 and ETH testing the top end of its 2-month long range at $2,750. We’ve rallied ~15% from the $60k pivot point and now we’re roughly at resistance.
Regulatory and Policy:
Not so much noise on the Regulatory/Policy front this week.
In the ongoing SEC/Ripple saga, it has been revealed that the SEC’s appeal of a prior settlement verdict is not based on XRP’s classification as a security but has been reframed to target other aspects of the ruling.
Joining Nasdaq, the NYSE and CBOE have won approval to list BTC ETF options. As we have stated in the past, the rise of spot crypto ETFs naturally leads to the evolution of additional institutional products, such as ETF options, which are typically used as a hedging tool for spot ETFs.
While polls remain deadlocked in the U.S. Presidential election, former President Trump’s lead in betting markets has continued to gain momentum, which may partially explain recent price pumps (and serve as a predictor should he retake the Presidency). Tough to know exactly what to make of the huge discrepancy between national polls and the betting markets.
Either way it goes, Larry Fink is not all that concerned as it relates to Bitcoin (a term that I believe he uses as NPC- shorthand for “crypto”).
UAE continues full steam ahead on the crypto regulatory front with plans to institute a legal framework for DAOs, using both crypto and boxing to divest from oil.
Tigran Gambaryan’s health continues to falter as he is held economic prisoner in Nigeria. U.S. state attorneys are urging President Biden to act.
Elizabeth Warren and pro-crypto challenger John Deaton finally faced off on stage, Will it change the outcome? Probably not, but we did enjoy this haymaker from Deaton.
Adoption
After an uneventful week last week, a massive inflow surge this week to BTC ETFs. Even the ETH ETFs managed some positive flows. Good to see a nice chunk of that action branching out to Fidelity and Bitwise too.
Market king Larry Fink emphasizes that Bitcoin is an asset class rivaling gold (he means crypto, see above). Increased political support plus Larry Fink is a good recipe for progress.
Sam Altman’s Worldcoin project has rebranded as World. While it’s a (very) bold rebrand, the linguistic shift focuses more on tech than monetary expression of its value, which is right for anything that is not BTC (and maybe ETH).
Crypto custody leader Copper Technologies has tapped an ex-Goldman executive as new CEO. Is U.S. focus finally on the horizon? We hope so.
Quick Take Or Two:
There is crypto optimism in the United States, and you don't just have to take our or Larry Fink's word for it. BTC prices are up significantly ahead of a Presidential election, during which both candidates have expressed their support for a consolidated regulatory framework. While there may be a bit more stagnancy in the run-up (and some pullback), it does feel as if regulatory progress and institutional adoption are sitting at a true (and massive) tipping point. Even without a major catalyst, BTC has been pushing $70 K.
If we are on the precipice of a bull cycle, we can certainly expect some differences from the last one, and perhaps current activity hint at some of those differences. For instance, alt coins have remained relatively muted behind BTC pumps. Sure, rotation takes time, but also maybe we should expect less aggressive rotation after the brutal washout of the past 2+ years.
Another observation: there are signs that the current rally is the institutional side of the market and not retail rushing in to push up prices (which also helps explain the above observation). For example, "The Kimchi Premium" -the Bitcoin price gap between South Korean and global exchanges -?has turned negative, a sign of lukewarm Korean retail activity. Such an inversion is rare, worth noting, and may signal a more cautious retail approach.
On The Lighter Side Of Things:
I know the Presidential election is important or whatever, but can both campaigns chill with emails, texts, and YouTube ads? It’s all making my brain hurt (and had me actually consider YouTube Premium subscription). Bongos go bong to reverse the hurt.