Research Summary
The report, “Crypto Trader Digest” by Arthur Hayes, discusses the current state of Bitcoin and the crypto market. The author examines the impact of centralised lending and trading firms, Bitcoin mining operations, and ordinary speculators on the Bitcoin market. He suggests that these entities have already sold most of their Bitcoin, leaving mostly illiquid assets. The author also discusses the role of leverage in the market downfall and the impact of rising US Treasury yields. He concludes by suggesting that the forced selling of Bitcoin by centralised lending firms and miners is over, and speculates on the timing of re-entry into the market.
Actionable Insights
- Understand the role of leverage: Misuse of leverage by centralised lending and trading firms, Bitcoin mining operations, and ordinary speculators was a significant factor in the market downfall.
- Monitor US Treasury yields: The rise in short-term US Treasury yields from 0% in Q3 2021 to 5% at present has had a significant impact on the market.
- Consider the state of Bitcoin: The author suggests that most Bitcoin has already been sold by centralised lending firms and miners, meaning forced selling is likely over.
- Plan for re-entry: The author speculates on the timing of re-entry into the market, suggesting that now may be a good time to consider re-entering.
