Wednesday, Oct 18, 2023

tokenization, BTC support, where are the ambassadors?

“Truth never lost ground by enquiry.” – William Penn ||

Hello everyone! A short email today, due to a schedule squeeze (this will come as a relief to many, I’m sure).

You’re reading the daily premium Crypto is Macro Now newsletter, where I look at the growing overlap between the crypto and macro landscapes. There’s also usually some market commentary, but NOTHING I say is investment advice. For full disclosure, I have held the same long positions in BTC and ETH for years, and have no intention to either buy more or sell in the near future.

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IN THIS NEWSLETTER:

• Mixed signals for BTC

• Who do tokenized securities really benefit?

• Natural gas

• Where are the ambassadors?

WHAT I’M WATCHING:

Mixed signals for BTC

Today’s sharp drop in the BTC price after almost reaching $29,000 earlier today highlights that the building tailwind from a possible spot ETF approval is far from enough to quell market jitters. Markets across the board are reacting to the escalation of the conflict in the Middle East. President Biden has flown to Israel in an attempt to quell the mounting tension, only to have the leaders of Israel’s neighbours cancel a planned summit in response to an explosion at a Gaza hospital that reportedly killed hundreds.

(chart via TradingView)

The oil price is climbing, as are US treasury yields. Stocks in Europe and Asia are dropping, and even earnings-focused US equities look to be heading down today. Nerves are high.

Since the earlier sharp BTC drop, most likely driven by position covering and/or liquidations, the BTC price has been holding stable. This suggests that the support is still there, just taking a breather. In other words, it’s notable that BTC isn’t dropping further.

This is most likely partly due to growing demand for safe havens - gold is up 5% over the past week, and climbing fast.

(chart via TradingView)

BTC support is also partly driven by more positive signs for on the bitcoin spot ETF outlook. Yesterday, Fidelity followed Invesco/Galaxy and ARK/21Shares in filing an amendment to its ETF proposal.

Why it matters:

The amendments are more than just cosmetic. They add detail on custody arrangements, hard fork procedures, compliance with GAAP, risk disclosures, the potential for illicit financing and more. If the SEC felt that any of these potential issues were a deal-breaker, they wouldn’t be talking, they would just go straight to denial.