Market Commentary
It has been a short week but the market witnessed a notable change in market sentiment. With the stronger-than-expected Manufacturing Purchasing Managers’ Index and higher inflation readings from the sector, the expectation is now leaning towards the Fed retracting its forecast of three 25-basis point rate cuts for 2024. The probability of the Fed implementing the first rate cut in June has dipped below 50%. This shift sent the U.S. 10-year Treasury yield to its 2024 high of 4.43% and the U.S. dollar to its highest level since last November. Bitcoin price fell to US$66k with the broader crypto market concluding the week in red.
Despite the negative market sentiment, the new spot Bitcoin ETFs attracted positive net inflows of ~US$100 million over the last five trading days from the 28th of March to the 3rd of April.
There are six weeks until 23 May, when the U.S. Securities and Exchange Commission (SEC) is expected to make a decision based on the current state of the spot Ethereum ETF applications. Yesterday, the SEC opened a window for comments on three spot Ethereum ETF applications associated with Grayscale Investments, Fidelity, and Bitwise who will undergo a three-week comment period. Other than this, there has been no other known engagement from the SEC on the matter. This lack of engagement from the SEC caused some analysts, including the crypto market maker GSR, to revise its estimate of the likelihood to a mere 20% for a spot Ethereum ETF approval in May.
CEO Comment
The Gap between Bitcoin and the S&P 500 has widened to 20%, a massive jump from last week’s 5%. This is a common theme when the market is in risk-off mode and continues to highlight that volatility surrounding Digital Assets will be an enduring theme. We expect the Gap to close again as we enter the Bitcoin halving cycle in a matter of weeks.
As for the shift list, which we define as the major events and announcements facilitating the broader market’s transition to Web3 financial rails or the internet of value, the top shifts for this week include:
Our Top “alts shifts” for this week, featuring shifts in our altcoin universe that drive our thematic approach, saw the second gap, or the broader digital asset market, remain flat at circa 37%. There is a big opportunity here, as we see this as a selective opportunity to identify and grow our alts portfolio via our “alThematics” work.
What are our favourite thematics for 2024? We continue to like any infrastructure plays of the shift from Web2 to Web3 financial rails and any plays in the real-world asset tokenisation infrastructure, data validation and decentralised storage, as well as scale-up technologies such as ZKrollups. We are closely following all the ”de’s” – DeFi, DePin, DeSoc – (want to know what that means? – message us).
Lisa Wade, CEO DigitalX
CRYPTO TOP 20 7 DAY PRICE CHANGE
*All figures throughout are in USD unless otherwise specified
Market Updates
The Shift List
Macro and Regulatory Environment
About DigitalX
DigitalX Ltd (ASX:DCC) is a leading ASX-Listed Bitcoin and digital asset funds management business. The Company has a 9 year track record mining Bitcoin, blockchain and smart contract development. DigitalX Asset Management is the investment manager of digital asset investment products that provide qualified investors with highly secure and streamlined access to digital asset exposure. To learn more contact the team at [email protected] or visit our website https://digitalx.fund/.
Disclaimer:
DigitalX Asset Management Pty Ltd is a corporate authorised representative (CAR) of Boutique Capital Pty Ltd (AFSL 508011), and True Oak Investments Ltd (AFSL 238184). To the extent to which this document contains advice it is general advice only and has been prepared by the CAR for individuals identified as wholesale investors for the purposes of providing a financial product or financial service. The information herein is presented in summary form and is therefore subject to qualification and further explanation. The information in this document is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account personal investment objectives, financial circumstances or particular needs. Recipients of this document are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this information. Past performance is not indicative of future performance.
