Valmar Capital Update (Issue #62)
On A Serious Note:
Volumes: Volumes picked up this past week as 7D ADV for spot BTC and ETH rose to $12.7B (+23.4% w/w) and $7.3B (+13.9%). This represents the highest ADV since August. 7D ADV for BTC and ETH futures followed suit, rising to $60.4B (+15.4% and $25.4B (+5.7%).
Volatility: 30D IV for BTC and ETH rose from the prior week to 57% and 64% as activity has picked up in the markets.
BTC and ETH Price: BTC spent most of last week selling off from a combination of economic worries as well as increased geopolitical risk from the Middle East. Sentiment in the market was worst as BTC as sold down to test the $60,000 level on Thursday ahead of US employment numbers. Following stronger than expected job data, the market recovered significantly and BTC currently trades at $63,800. ETH prices followed a similar pattern though it continues to lack the same sponsorship that BTC enjoys. Year to date, ETH has underperformed BTC by 27.4%.
Regulatory and Policy:
As we wait for more clarity concerning potential SAB 121 exemptions, the SEC has filed an appeal in a federal court’s $125 M settlement ruling. We suppose Chairman Gensler has resolved to fight this thing to the very end. What else does he have to lose at this point? He’s already radioactively toxic. Ripple CEO Brad Garlinghouse reaffirms he’s up for the fight.
Which might explain the mid-October exit of top SEC enforcement official Gurbir Grewal. If the end is coming, better to try to reposition than take on full radioactivity.
Mark Cuban and Anthony Scaramucci, vocal supporters of VP Harris in her Presidential bid, have also taken to putting Chairman Gensler on public blast.
About that Presidential race, what does the breakdown of political support look like for crypto owners? According to a Coinbase poll, basically an even split. Still feels like it leans for former President Trump from within the industry, but that’s anecdotal.
A CFTC subcommittee has made an unknown recommendation as to the use of tokenized shares as collateral for institutions such as BlackRock and Franklin Templeton.
As Binance faces continued regulatory pressure and issues, its market dominance continues to slip and spread to other leading exchanges, such as OKX.
To comply with MiCA rules, Coinbase will delist stablecoins that are unauthorized in the EU by end of year.
Taiwan is getting tough on registration. Crypto firms that do not register with Taiwan's regulatory body, the FSC, face fines and jail time.
Adoption
Visa continues to expand its blockchain projects, striking a partnership with Spanish bank BBVA to launch a Euro-pegged stablecoin in 2025.
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BlackRock expects falling volatility for BTC, which is only logical as the regulatory and adoption environments continue to improve. This vol consolidation will occur in cycles over years, not months.
We mentioned the growing Solana energy last week. KHELP Financial provides a fantastic overview here.
Quick Take Or Two:
In conjunction with CryptoMondays and its founder Lou Kerner, Valmar Capital is honored and excited to co-host a brand-new edition: CryptoMondays Wall Street. Why this and why now?
We firmly believe U.S. crypto is at a critical tipping point: with the launch of institutional ETFs; the incorporation of blockchain technology into mainstream payment, tokenization, and other projects; shifting bipartisan political winds; and the pressure that that is now putting on the SEC, quite a few catalysts are aligning for a major 2024/2025 breakthrough in this country.
As such, crypto is now on a path of convergence with Wall Street more than ever before. CryptoMondays WS will have a strong investment management emphasis and will provide a Schelling point for sophisticated crypto and Wall Street professionals to learn about, grow, and evolve the space together. It's now more important than ever to build the proverbial bridge, close the communication gap, and continue to move forward into the next phase of institutional-grade crypto investment management.
If you have not already registered for tonight's kick-off session, you can do so here. Zach Pandl (Head of Research at Grayscale) will be the esteemed guest, and we will certainly be taking some market notes from Zach. Come get the color too, tonight and every first Monday of the month.
On The Lighter Side Of Things:
Good to see friends healthy and well at Mainnet in NYC last week, and hope everyone got a chance to recharge this weekend, especially if headed out to Permissionless this week. Eat your veggies, exercise, drink water, and don't end up like this guy (he's not happy, no matter what he says, nor how big the pile):