In this biweekly analysis series, Mads Eberhardt, a former Cryptocurrency Analyst at Saxo Bank and trader at Bitcoin Suisse, unveils the complex world of crypto assets. With 8 years of hands-on experience in crypto, Mads delves deep into the heartbeat of the industry, offering a nuanced understanding that goes beyond the surface. We invite you to tap into this extensive knowledge of crypto and fearlessly explore opinions that others might shy away from. While you may not agree with everything, we guarantee that your horizon will broaden.
Besides our crypto portfolio, our offering includes two publications. ‘Crypto Moves’ is our detailed editorial that mostly analyzes a single topic in-depth, published every Thursday. ‘Crypto Crisp,’ on the other hand, is our concise note, published on Mondays, that prepares you for the week ahead in crypto, not least by looking back at the past week.
The decentralized stablecoin protocol Maker is undergoing a transition to rebrand as Sky, with its stablecoin shifting from Dai to USDS. This change is expected to significantly reduce Maker’s profitability, but we anticipate that it will drive substantial growth instead. Overall, we remain highly optimistic about this transition.
The institutional adoption of crypto is progressing steadily. Last week saw announcements from SWIFT, Visa, and BBVA. It is important to closely monitor these institutional moves, as they will play a crucial role in driving this crypto bull market.
The tensions in the Middle East and the unexpectedly tight liquidity at the start of October create a risk-reward profile that strongly favors long positions in crypto. As long as Israel does not respond with significant force against Iran, the outlook is extremely positive.
The fourth quarter looks highly bullish for crypto, driven by increased U.S. dollar liquidity, strong seasonal trends, Chinese stimulus, and positive factors like the post-Bitcoin halving and low interest rates. However, in the short term, we would prefer to see a drop in open interest in the Bitcoin futures market to ensure it is not overly leveraged.
The imminent U.S. Presidential election can only surprise the crypto market to the upside, providing yet another reason to be long crypto as we enter the fourth quarter.
This week will bring the last liquidity squeeze before multiple factors come together to push us higher into the fourth quarter of the year.
Ethereum has significantly underperformed Bitcoin in recent years, especially in recent months. However, much like in 2021, when Ethereum more than doubled in value against Bitcoin in just a few months, it is now poised to shine again—particularly following the Federal Reserve’s interest rate cut yesterday.
The crypto market has revealed its hand. A 50 basis point rate cut on Wednesday will lead the market higher, while we expect that a 25 basis point cut will only cause a limited move to the downside.
There is little doubt that the first U.S. rate cut will happen next week. Here is our view on how Bitcoin, Ethereum, and the rest of the crypto market will react to this cut, despite the limited historical data available.
Repeat after us: short-term pain for long-term gain. This is often the case in crypto, especially now.
We turned bearish on Monday due to a worsening economic outlook, characterized by weaker growth and tightening liquidity in September. While the month will be challenging, it’s premature to declare the bull market over. We expect either further downward movement or sideways trading this month, but anticipate a strong recovery starting in October and continuing beyond.
In August, we anticipated a crypto market recovery. While this was somewhat accurate, current signs suggest a downturn or, at best, sideways action in September due to challenging macroeconomic conditions, negative ETF flows, and the absence of a Coinbase price premium.
Decentralized finance is poised for a resurgence in interest, but this alone will not drive substantial price increases for DeFi-focused cryptocurrencies. To achieve significant price appreciation, these cryptocurrencies need to demonstrate widespread adoption, strong revenue generation, minimal token unlocks, a growth-oriented structure, and, importantly, direct monetary rewards for holders funded by their revenue. We have identified two DeFi cryptocurrencies that meet all these criteria.
The crypto market remains on a path to gradually recover its lost ground. Last week, U.S. Bitcoin spot ETFs saw strong net inflows, while Ethereum spot ETFs experienced a net outflow. However, a positive development for Ethereum is that its rollups reached a new all-time high in daily transactions, indicating they are steadily gaining more traction.
The 2020 ‘DeFi Summer’ was four years ago. Now it seems more likely than ever that another DeFi summer is on the horizon, with several factors pointing in that direction.
The market may be boring, but it is an ideal time for long positions, as we seem to be in an accumulation phase. Exchange balances keep declining, and the futures market has mostly shifted to being positioned short.
You can be quite certain: token unlocks tend to drive digital asset prices down. The data from this year overwhelmingly supports this, though there have been a few rare instances in the past where significant returns were missed during major token unlocks.
The crypto market has begun a slow but steady recovery, though we have not yet regained previous levels. We expect it may take the rest of August to fully recover.
Solana has been the standout performer among the larger cryptocurrencies over the past year. On the metric of transactional revenue, one of the most critical indicators, it may seem like Solana is about to dethrone Ethereum. However, this is not the case. Ethereum continues to thrive, and there is no indication that this will change anytime soon.
Peak fear has struck again. While not new to crypto, this instance is arguably the worst since the COVID-19 crash in March 2020. Despite the drop in prices and a changed liquidity outlook, the broader landscape remains the same. We still believe that the market will slowly but surely recover to new heights.
As we head into the final five months of 2024, a year already extremely remarkable, we are particularly looking out for three factors that will rule the remainder of the year. If they turn out as we expect, our base case is Bitcoin trading at $100,000, while Ethereum trades at $6,500 in the fourth quarter. However, there is a small risk that I may need to find a new job.
In our view, the crypto market is completely offside on the recently-launched U.S. Ethereum spot ETFs. We are taking advantage of this misalignment by allocating to a short-term trade in our crypto portfolio.
As expected, the crypto market has begun to show signs of life, with Bitcoin leading the way while Ethereum trails behind. As we approach the end of the peak Grayscale Ethereum outflows, it is only a matter of time before Ethereum takes the lead in driving the market upward.
The Ethereum price has dipped slightly since the launch of its U.S.-based ETFs, primarily due to significant outflows from Grayscale. There is no reason to consider the ETFs a failure despite the slight net outflow. In fact, this situation presents a prime buying opportunity.
Now we roll. The crypto market, especially Bitcoin, has experienced substantial gains in recent weeks, but that is just the beginning. Many other positive factors are on the horizon. Additionally, it looks like U.S.-based Ethereum spot ETFs will launch tomorrow, which should put an end to Ethereum’s underperformance relative to Bitcoin.
The technology equity sell-off of the most recent trading days feels reminiscent of the crypto sell-off in late June and early July. Can we explain the recent moves in high-beta assets with liquidity trends or are idiosyncratic flow factors in play?
Germany’s Bitcoin sell-off ends, imminent Ethereum ETFs launch in the U.S., and Trump’s potential return to office signals regulatory shifts. The crypto market increasingly aligns with improving macroeconomics as fear subsides.
In our crypto portfolio, we are adding exposure to a token characterized by strong revenue generation, net profits comparable to technology equities, no inflation or token unlocks, and a prime position to benefit from the growing trend of Real-World Assets (RWAs). Additionally, its high correlation with and outperformance of Ethereum suggest positive impacts from the upcoming Ethereum ETFs.
The market is gripped by fear at every turn. In our opinion, this is the perfect time to buy the dip. We have gathered the most compelling reasons and charts to demonstrate why now is the time to accumulate as many coins as possible.
The crypto market has favored Bitcoin and Ethereum this year, while some investors have risked everything on cryptocurrencies with little potential. Given the market’s momentum-driven nature and the upcoming Ethereum spot ETFs, we see no reason for this trend to change going forward. Additionally, we examine unlocks, from which Bitcoin and Ethereum are also spared.