The U.S. presidential election is shaping up to be a toss-up. The upside? A Donald Trump win tomorrow would spark a near-term surge in crypto prices. The downside? We are more likely looking at a Kamala Harris administration over the next four years, which would be far less supportive of the crypto industry.
Crypto Moves
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.
Crypto Moves #50 – Riding the Macro Wave Higher
The macroeconomic environment is turning strongly positive for crypto, with liquidity on the rise and interest rates trending downward. Now, the last piece is a Trump victory on Tuesday—without it, the crypto markets could get nasty.
Crypto Crisp: A Waiting Game
The overall trend in the crypto market remains upward. However, for the time being, it seems largely driven by speculative activity in the derivatives market. This level of speculation is not sustainable, so we continue to look for a reduction in the open interest of futures.
Crypto Moves #49 – How Long Can MicroStrategy’s Premium to Bitcoin Last?
MicroStrategy’s premium over Bitcoin has surged due to Saylor’s ‘Bitcoin bank’ vision and the recent stock split. However, with the availability of ETF options, increasing global regulatory clarity—especially under a likely Trump administration—and rising Bitcoin prices putting additional buying pressure on MicroStrategy, we expect the premium to fall below 200%, similar to what occurred during the 2021 bull market.
Crypto Crisp: Excessive Futures Open Interest
The overall trend of the crypto market is undoubtedly upward. However, we are waiting for some of the excess open interest and leverage in the market to be cleared out. This is likely to occur following what we expect will be an imminent retaliatory strike by Israel.
Crypto Moves #48 – Uniswap’s Unichain Is Net Positive, End of Story
Over the past week, my X feed has been flooded with doomsday predictions claiming that Uniswap launching its own Ethereum rollup will be the final blow to Ethereum. This is absolutely not the case. In the short term, it will have no impact on the activity of Uniswap’s mainnet application. In the longer term, it will actually support Ethereum’s rollup-centric roadmap by being an interoperable liquidity hub. As rollups are about to start paying for blobs, Ethereum’s transactional revenue is still sustained even as activity moves from mainnet to rollups.
Crypto Crisp: Seller. Coinbase Seller
The crypto market showed strength over the weekend, despite a notable Coinbase discount on Bitcoin and Ethereum, signaling net selling by its users. Trading higher even with this discount indicates strong upward momentum. For now, we are not concerned about the 69,330 bitcoins seized by the U.S. government in connection to the Silk Road case.
Crypto Moves #47 – Maker, or now, Sky, Sacrifices Profit for Growth
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.
Crypto Crisp: Full-blown Institutional Adoption
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.
Crypto Moves #46 – Better Bull Than Bear
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.
Crypto Crisp: Up Is Soon The Only Way
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.
Crypto Moves #45 – Crypto’s Future in the 2024 U.S. Election
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.
Crypto Crisp: The Final Liquidity Crunch, Then Up Only
This week will bring the last liquidity squeeze before multiple factors come together to push us higher into the fourth quarter of the year.
Crypto Moves #44 – Ethereum Will Shine Again
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.
Crypto Crisp: The Crypto Market Has Shown Its Hand
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.
Crypto Moves #43 – Trading Crypto on the First U.S. Rate Cut
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.
Crypto Crisp: September, Please Go Away
Repeat after us: short-term pain for long-term gain. This is often the case in crypto, especially now.
Crypto Moves #42 – Where Do We Go From Here?
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.
Crypto Crisp: Macro Is Not Your Friend
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.
Crypto Moves #41 – The Two Worthy Cash Cows in DeFi
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.
Crypto Crisp: Where Are the Memecoins? Solana Asks
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.
Crypto Moves #40 – Another ‘DeFi Summer’ Is On the Horizon
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.
Crypto Crisp: Boring
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.
Crypto Moves #39 – The Token Unlocking Saga Is (Mostly) a One-Way Down Game
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.
Crypto Crisp: Slowly But Surely
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.
Crypto Moves #38 – Ethereum versus Solana
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.
Crypto Crisp: Bloodbath at Peak Fear
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.
Crypto Moves #37 – Three Factors to Rule the Remainder of 2024
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.
Crypto Portfolio: Trading U.S. Ethereum ETFs
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.
Crypto Crisp: Short-term Patience
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.