Market Commentary
Bitcoin surged to an all-time high (ATH) surpassing the US$73,000 (~AUD $110,000) on 13 March. Bitcoin continues its rally, defying broader market downturns spurred by hotter-than-expected inflation data. As at the time of writing, Bitcoin’s price has increased 3% in the past 24 hours whilst the S&P and Nasdaq Composite were down 0.2% and 0.6% respectively. Bitcoin’s latest rally has been driven by the strong inflows into the spot Bitcoin ETFs in the US. Over the past week, trading volume for the US spot Bitcoin ETFs ranged from US$7 billion to US$9 billion per day. To put this into perspective, there are only five other stocks which saw higher trading volumes, according to Eric Balchunas of Bloomberg.
Ethereum broke US$4,000 on 12 March and has been trading in the $3,900-$4,000 range since. Ethereum’s Dencun upgrade went live on 13 March 2024. Its core feature, EIP-4844, also known as “proto-danksharding,” introduced blobs aimed at reducing transaction costs on layer-2 networks. In addition, the Dencun upgrade incorporates eight other Ethereum Improvement Proposals (EIPs) designed to enhance various functions on the network, including consensus, execution, and data costs. A mere 13 minutes after the Dencun upgrade went live, someone uploaded the entire Bee Movie script on the mainnet — costing roughly $14, showcasing a significant fee reduction on Ethereum layer 2s. Uploading the Bee Movie script has been a long-running joke in the crypto circles, in which people race to mint the full-length script on brand-new networks and blockchain-related functions to confirm success of the networks/function.
On top of our shift list this week is the Canton pilot in the US that allowed 15 asset managers, 13 banks, four custodians and three exchanges to seamlessly transact and settle tokenised assets and deal with fund registry, digital cash, repo, securities lending, and margin management transactions. Participation in the pilot included Goldman Sachs, BNY Mellon, DRW, Oliver Wyman, and Paxos.
CEO Comment
The Gap between Bitcoin and the S&P 500 has become essentially negligible, equating to 1%, with Bitcoin and the S&P 500 continuing to hit all time highs. We expect to see all time highs continue to be made with fairly volatile range trading over the next few weeks with the market nervously questioning if the halving will be buy the rumour sell the fact. Now that the Gap has well and truly closed, what now? We certainly see the Second Gap closing in on Bitcoin as we enter Altseason. Rest assured, we are running our altThematic process in the Digital Asset Fund to generate this alpha.
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 40%. 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.
