29th October 2024 > > $71k!

tl;dr

Happy days with a breach of $70k to the upside. The US election could  put a short-term damper on things. The miners potentially tell us otherwise. Now the US universities are getting involved.

Market Snap

Market Wrap - $70k! Hurrah!

My girlfriend reminds me that she loves waking up in the morning to a 7-handle.

Another nearly half a billion dollars of institutional money flowed into the spot BTC ETFs yesterday. All other things being equal, greater demand leads to a higher price, an incontrovertible fact of all markets. Another day or two of this, and new ATHs are all but guaranteed.

Curious Cryptos’ Commentary – US elections

The disconnect between the polls and the betting markets remains wide. Polls show Harris a touch in the lead, but probably within the margin of error. Polymarket has Trump at 66% and Harris at 34%.

Trump’s probability briefly rose to 99% when an uninformed punter put down a few million dollars on Trump without considering the depth and liquidity of the market. He took out all the offers up to 99%, quickly  attracting a bunch more sellers driving the price back down to where it started. A graphic illustration of the truth that the price moves in response to supply and demand, both of which constantly change. Any attempt to predict price movements based on nothing more than historical data is bound to consistently fail.

The current popular narrative is that a Trump win is good for crypto markets. Generally, when an opinion is popular and trending, or is so obviously shaped by groupthink (looking at you ECB), it tends to be wrong, especially in the financial markets, but we also see that in most areas of life. Contrarians tend to win, in my experience.

It is true that Trump has been the more vocal supporter of cryptos, and I think he would find it hard to row back on that. His declaration of replacing Gensler with someone who is a crypto supporter would be huge, but not in the immediate future.

If Harris wins, she will have to become more crypto friendly, which again would be good in the intermediate term.

The worst possible outcome would be a President who commands neither or just one of the houses. That way lies a legislative logjam. Warren’s anti-freedom and anti-liberty crusade would take full advantage of just such a situation.

Curious Cryptos’ Commentary – BTC miners

CoinTelegraph has a nice little graphic this morning, showing the price reaction in the miners to a breach of $70k to the upside:

That’s a lot of double digit increases in just one day.

Remember – miners provide leveraged exposure to the price of BTC (if that is what you are looking for) without the risk of liquidation, with the bonus of being able to own those stocks within tax-free wrappers such as pensions and ISAs.

If you are bullish on BTC, you need to be even more bullish on the miners.

Curious Cryptos’ Commentary – Emory University

Emory University has declared a $15mm investment in the Grayscale Bitcoin Mini Trust alongside an investment in Coinbase:

https://www.sec.gov/Archives/edgar/data/1377635/000137763524000025/xslForm13F_X02/usethisfile13F.xml

The total amount is approximately 0.1% of its endowment fund’s assets of $21 billion. It will be interesting to see if it continues to allocate to the crypto sector.

This is also the first investment by a university endowment fund into the spot BTC ETFs.

My ridiculous price prediction of $1.2mm per BTC totally failed to incorporate such funds into the calculation. Standing at close to $1 TRILLION dollars, if 3% to 5% of those assets make their way into the crypto markets this will add another 30-50 billion dollars of demand.

And then of course there are the other endowment funds to consider, for hospitals, churches, and other institutions. Adoption starts as a trickle, and then suddenly, it becomes a flood.