Market Commentary
Digital Asset prices dropped this week with significant outflows from spot Bitcoin ETFs being recorded, despite the wider risk-on sentiment fueled by low CPI figures coming out of the US last week. Bitcoin experienced a significant sell-off from miners and notably a significant amount of selling from long-term Bitcoin whale wallets, dropping as low as US$64,000 USD before rallying back above US$65,000 off the back of positive regulatory developments out of the US. The overall hashrate has dropped, signalling a potential consolidation among miners in the aftermath of the recent Bitcoin halving. This reduction in hash rate suggests that some miners may be struggling with profitability, leading to a shakeout where only the most efficient operations remain.
In regulatory news, the SEC has decided to drop its case against Ethereum 2.0, as announced by Consensys. This decision has been met with positive sentiment in the market, as it removes a significant source of uncertainty for Ethereum investors and developers. The dismissal of the case is seen as a green light for further development and innovation within the Ethereum network, boosting confidence among stakeholders and potentially driving new investment into Ethereum and related projects.
On the political front, former US President Donald Trump has expressed support for cryptocurrencies, marking a significant shift from his earlier critical stance. Trump’s endorsement is expected to influence public perception and could lead to increased mainstream adoption and acceptance of digital assets. His support aligns with growing bipartisan interest in blockchain technology and cryptocurrencies, suggesting there could be the potential for more favourable regulatory frameworks in the future. This development is likely to have a positive impact on market sentiment and may spur further institutional and retail interest in the crypto space.
CEO Comment
The Gap between Bitcoin and the S&P 500 has widened to 19%, from 13% last week, in line with this weeks Bitcoin sell-off as we track the beta of broader markets.
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, drop ever so slightly to circa 52%. I want to reiterate that this is a big opportunity, as mentioned we see this as a selective opportunity to identify and grow our alternatives portfolio via our “alThematics” work. The gaps themselves are proving to be a risk on, risk off proxy and hugely high Beta – volatility is a certainty and an opportunity – the building is happening no matter what.
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.
