Research Summary
The report discusses the recent trends in the cryptocurrency market, focusing on Bitcoin (BTC) and Ethereum (ETH). It highlights the impact of the BTC ETF approval, the shift of real money from BTC to ETH, and the potential for 2024 to be a “buy the dip” year. The report also mentions specific cryptocurrencies for potential asymmetric bets.
Key Takeaways
Bitcoin ETF Approval and Market Impact
- Bitcoin ETF Approval: The report notes that despite the approval of the Bitcoin ETF, BTC has not managed to break to a new high. However, the approval has created a stronger dip buying floor, opening up BTC as an asset class to traditional finance capital.
- GBTC Outflows: The Grayscale Bitcoin Trust (GBTC) has seen significant outflows, which is now the largest overhang, outpacing new creations among other ETFs.
2024 Market Predictions
- Buy the Dip Year: The report predicts that 2024 will be a year to buy the dip, with new traditional finance main characters advocating for BTC after accumulating it. The report’s authors are 80% net long with a preference for catalysts and narratives.
- Asymmetric Bets: The report suggests looking for asymmetric bets in specific cryptocurrencies like ARB, OP, FXS, BLUR, and MATIC, especially with the expected approval of the Ethereum ETF and the Dencun upgrade.
Market Trends and Liquidity
- Global Liquidity: Global liquidity continues to drip, largely due to China, which typically drags crypto. However, the US is on an easing path, which alleviates this overall trend.
- US M2 Y/Y: The report notes that US M2 Y/Y, which is highly correlated to BTC price, has bottomed in Apr ’23. With 6 rate cuts expected in 2024, it is difficult to not think that crypto will be higher by year end.
Bitcoin and Ethereum Market Movements
- Bitcoin Market Movements: BTC has seen a nice bounce off the 40K handle and 100DMA. The report does not expect BTC to go lower than 40K anytime soon.
- Ethereum Market Movements: The report notes a shift of real money from BTC to ETH, with BTC inflows to exchanges and ETH outflows from exchanges.
Actionable Insights
- Monitor Bitcoin and Ethereum Market Movements: Given the recent market trends, it would be beneficial to closely monitor the movements of Bitcoin and Ethereum, especially with the shift of real money from BTC to ETH.
- Consider Asymmetric Bets: The report suggests considering asymmetric bets in specific cryptocurrencies like ARB, OP, FXS, BLUR, and MATIC, especially with the expected approval of the Ethereum ETF and the Dencun upgrade.
- Prepare for 2024 Market Predictions: With the report predicting 2024 to be a “buy the dip” year, it would be beneficial to prepare for this potential market trend.
