25th October 2023 > > The "anti-crypto army" and Glassnode.

tl;dr

The football chant “Sit down, shut up” must surely be ringing in Senator Elizabeth Warren’s ears. Glassnode provides more evidence of a potential supply shock heading our way.

Market Snap

Market Wrap

Bloomberg leads with an interesting story of the travails of the fund management industry with a total of $100 TRILLION of assets. The gist of it is that active asset management is no longer seen as attractive, and that passive funds – largely in the form of ETFs – are what investors are looking for. That might help to shed some light on the speculation around a spot BTC ETF. Just 1% of all those assets will have a noticeable impact in crypto markets.

Curious Cryptos’ Commentary – Cryptos fund Hamas

You will recall that on 21st October the CCC reported that the US government had found that as much as $2,000 worth of crypto could be traced to Hamas, a proscribed terrorist organisation.

This obviously excited naysayers like Senator Elizabeth Warren and her “anti-crypto army”. Demanding immediate action from the authorities, she has got her wish with the sanctioning of a wallet containing a whopping $16.25 of cryptos. Way to go, Warren:

In entirely unrelated news, the UN has transferred $4.5 billion to Hamas in the form of aid for Gaza between 2014 and 2022.

Curious Cryptos’ Commentary – Glassnode

The latest on-chain analysis from Glassnode is to be found here:

https://insights.glassnode.com/the-week-onchain-week-43-2023/

Given the dramatic price increases over the last few days, Glassnode gives us some insights into how that has affected investors’ holdings and their behaviour.

Short-term holders have a cost basis of $28k. Some of those coins will develop into long-term holdings, but plenty of them might be expected to be for sale. If you recall, just 24% if coins are short-term, a total of 4.7mm with a market cap of $160bn as of today. That is equivalent to approximately 1% of the assets under management at the twelve asset managers with applications for a spot BTC ETF.

Of all coins in circulation, 81% are now in profit. The question is whether the 76% of coins held in long-term wallets might be tempted out. It seems not as long-term holdings continue to increase, reaching an all-time high of nearly 15mm coins.

Meanwhile, centralised cryptocurrency exchanges are seeing a drawdown of funds, lowering liquidity, and further reinforcing the narrative that higher prices are not resulting in holders becoming sellers.

Once again, I repeat that the prospect of a supply shock looms large.