Valmar Capital Update (Issue #76)

On A Serious Note:

Volumes: 7D ADV for spot BTC fell to $20.3B, and 7D ADV for spot ETH followed suit, falling to $12.4B.

Volatility: 30D IV for BTC remained steady at 55.33% while ETH measured 69.07% (+4 vol points w/w).

BTC and ETH Price: With potential trade wars looming (more on that later), it's been a rough week for BTC and an even worse one for ETH. BTC is currently sitting at ~$95K and ETH clocking in at ~2.6K. Liquidations left and right across the market.

Regulatory and Policy:

Following the rescindment of SAB 121, much more tranquil this week on the regulatory / policy front.

The Fed stayed pat on interest rates, though a somewhat positive tone from Chairman Powell kept BTC above $100K.

While no specifics were offered, he added that banks can provide crypto services, signaling another shift from alleged debanking practices of the prior administration.

It was only a matter of time: memecoin platform Pump.Fun has been tagged with a class action lawsuit by the Southern District of New York for securities violations. There is an obvious and stark contract between memecoins and utility-based tokens; this distinction should be important in any consolidated regulatory framework, and retail does deserve to be protected from rugpulls and scammy behavior.

Senator Elizabeth Warren must have read our dig about her last week, because she just won’t let her crypto whining go, despite the fact she’s lost most of her political capital on the issue. Tough break, Liz.

SBF’s parents are hunting for a pardon for their son. This is unlikely because 1) he’s overwhelmingly guilty of massive fraud and 2) he didn’t exactly run with Trump’s political crowd. Anyway, shouldn’t his parents be in prison too?

Illinois joins the pack of now 15 states considering a state-level BTC reserve. May still just be posturing, but once the first moves, many will move.

The Czech National Bank will study the potentiality of BTC as a reserve asset.

The European Central Bank going the other way and BTC will NOT be considered. More Euro lag loading?

Adoption:

After a rocky start to the week, BTC ETFs battled back to slightly positive inflows. Same general pattern, but different outcome: slight outflows for ETH ETFs.

ETF news running wild. The SEC has fast-tracked Bitwise’s hybrid BTC / ETH ETF. Grayscale looking to convert an XRP Trust into the first XRP ETF. And 21Shares has their eyes on a Polkadot ETF.

Coinbase is ramping up its push to include derivatives via SOL futures.

Coinbase also released its quarterly “Guide to Crypto Markets”, which is insightful as usual and worth your attention.

Kraken had a fantastic 2024, more than doubling revenue and well positioned in US markets.

Quick Take Or Two:

Tariff wars have seemingly begun, and crypto bears the brunt of risk-off moves. The slump offers a clear signal that tariffs will rattle financial markets (the President imposed a 25% levy on goods from Canada and Mexico and a 10% tariff on Chinese goods). We could be on the brink of a new trade war upending global commerce and deflating an enthusiastic crypto atmosphere. Turns out the tariff stick, was not just a negotiating tactic. Maybe he’ll withdraw them quickly, but tariffs could represent the largest emerging risk to crypto and risk-on investments, This is what you get with President Trump: the good, the bad, and the volatile.

And we’re back with another CryptoMondays Wall Street tonight. Join us as we chat with Eliezer Ndinga (Head of Digital Asset Strategy, 21Shares) about the current state of the market and look forward into the 2025 crypto landscape. First Monday of every month, it’s the place to be.

On The Lighter Side Of Things:

Sports lull before next week’s Super Bowl (go Birds) and generally stinky markets (thanks, trade wars). Good news is this album still rocks. Let’s have a positive week, folks.