18th October 2023 > > The Aussies & Cycles.

tl;dr

The Aussie love-in continues. The BTC Cycles Theory may be of some use to us.

Market Snap

Market Wrap

The psychologically important 30-handle is almost within sight. That will likely make for more transfers from speculative money into diamond hands.

Curious Cryptos’ Commentary – And the Aussies do it again!

Zodia Custody Australia, a digital asset custodian and subsidiary of Standard Chartered, has announced the launch of a platform providing custodial solutions for institutional investors. CEO Julian Sawyer explains:

"An estimated 26% of Australians hold digital assets, totalling the equivalent of $21.6 billion currently held via cryptocurrency exchanges and custodial solutions. Responsible institutional adoption is key to ensuring this growing industry is safe and secure for all. Institutions need bank-grade infrastructure to responsibly participate."

This initiative is in collaboration with NAB, Australia’s largest bank.

This news follows hard on the heels of the announcement of a new proposed regulatory structure in Australia for centralised cryptocurrency exchanges and digital custodians – see yesterday’s CCC for more details.

There are two key take-aways.

The first is that a commitment to move towards a regulatory environment that is conducive to crypto business, and is clear and reliable, leads immediately to investment that will in turn create tax dollars. Perhaps the US and the UK might take note one day.

The second is one that even I am getting bored of repeating.

These initiatives are driven by institutional customer demand. Wholesale adoption of cryptos is gathering pace.

Curious Cryptos’ Commentary – BTC Cycles Theory

As we approach the April 2024 halving (is it that time already?) you are going to see a lot of analysis along these lines:

Distinct from technical analysis, the cycle analysis does show some remarkably consistent themes if we assume the author hasn’t made some Thomas Piketty style adjustments to make the data fit the theory.

I would be wary of assuming that history will repeat itself, not least because almost everyone appears to be ignoring the fact that the impact on supply of this halving will be a reduction of only 3.125 BTC per block, a far cry from the cut of 25 BTC for the first halving.

But in some ways, it might be a useful guide.

This is a clear reminder that rapid ramp-ups in price are fuelled by speculative money, looking to make a quick turn. Those weak hands don’t hang around when disappointed. Even dedicated HODLERs like the CCC Treasury will likely lighten up into the next bull run, though the Treasury committee is still not entirely decided on that point.

There will also be a focus that November 2025 will see the next ATH signalling the start of the subsequent bear market. Long-term participants have that date seared into their memory, with a view to using hot money as exit liquidity in the months leading up to it.