There is a company out there that has more funds running through its systems than the entire GDP of the USA. A company that can and has used its clout to effect “societal change”. A company that has a line into the most powerful politicians in the world.
It’s a company that has recently come front and centre as it has started exploring investments in the crypto space.
I am of course talking about BlackRock, the largest asset manager in the world. While some may have heard of it before, it can be hard to appreciate just how much control it has over the financial markets. Control that is afforded to it through leveraging our money.
In my video today, I am going to be taking a deep dive into this company and explaining exactly why it has so much power – not only with the money it has to invest, but with the edge it has over other asset managers. I will also be showing you when it has exerted this power and how it plans to continue doing so in the future.
You can watch that video here.
📊 Main Portfolio 📊
No big changes to the portfolio this week. Took a bit of profit on APE and SOL and will be keeping this in UST. It seems to be a pretty volatile week coming up (see below) so I am keen to have some dry powder in stablecoins before then.
I will keep you regularly updated with these moves in my Telegram channel.
ETH 31.59% | BTC 22.22% | SOL 8.08% | DOT 6.17% | UST 4.73% | ATOM 4.71% | RUNE 3.59% | APE 3.18% | LUNA 3.07% | NEAR 2.91% | FTM 1.65% | ADA 1.57% | AR 1.50% | HNT 1.35% | MATIC 1.31% | INJ 0.93% | LINK 0.65% | YGG 0.45% | XDEFI 0.33%
🖼 NFT Portfolio 🖼
MAYC 95.79% | Meebit 4.21%
📈 Thoughts on Market 📈
Let me start by saying that last week was a wild ride. If you watched last week’s crypto review, you’ll know I spotted a bearish pennant on BTC’s daily price action and predicted that its price would either drop to around 38k or pump to around 42k. Well, BTC somehow managed to hit both price targets – it dropped to 38.5k and then spiked to almost 43k days later!
Now, we all know that crypto is volatile, but last week surprised even me. As far as I can tell, it has mostly to do with the balance of BTC on exchanges which continues to drop like a rock, and is now the lowest it’s been in over 4 years. This means it doesn’t take much money to move the market as it did even just a few weeks ago, and this effect is only increasing.
Another thing I wasn’t expecting was the sudden dip late last week. I’m still trying to figure out what caused it, and the obvious answer seems to be the Fed. Chairman Jerome Powell made some more hawkish comments on Thursday that caused the crypto market and stock market to tumble. The odd thing is that the markets had already priced in what he said about rate hikes.
A contributing factor might have also been Earth Day. This is because many people still think that Bitcoin mining is killing the planet, and I suppose you can thank the mainstream media for that one. As explained in my video about Coinshares’ crypto mining report, Bitcoin mining operations only use 0.05% of the world’s energy, and account for 0.08% of global carbon emissions.
Unfortunately, these facts seem to have fallen on deaf ears, particularly in the European Union where some politicians seem to be intent on killing crypto mining at all costs. Many altcoins have also capitalised on this fake news to promote themselves as the ‘environmentally friendly’ alternative to Bitcoin. Too bad nobody is paying attention. I digress.
I also suspect that the options expiries for Bitcoin this upcoming Friday might be weighing down on the crypto market. As I’ve mentioned before, options expiries tend to increase volatility as market makers adjust their hedges. This is why BTC tends to drop in the second half of each month, at least according to expert crypto traders like Bob Loukas, who is also one of my favourite crypto YouTubers.
Despite all this apparently downward pressure however, it sounds like the institutions are still buying…
👁 Insider Information About Institutions In Crypto 👁
Every so often we’ll get an email from a fan offering to give us insider information. Oftentimes these are just attempts to get us to look into “hidden gem” crypto projects. However, this was not the case with a fan who reached out last week. This fan (who I will call Jerome) works for a crypto exchange and can see what the institutional investors are up to.
Here’s what he said…
For starters, there’s been a decline in institutional trading volume for cryptocurrency, which is consistent with headlines like this one. Interestingly though, the number of institutions dabbling in cryptocurrency continues to increase, despite this decrease in trading volume. In other words, new institutional investors are coming in, and are just waiting for the right time to buy.
As some of you will know, when institutions are looking to execute large block orders, they will do the trade OTC (Over the Counter). This is mainly to make sure they don’t move the market with their trades. Jerome said that OTC trading volume by institutions seems to be about the same as the spot trading volume, and that when you see a huge flow of funds to or from an exchange without prices being affected, that’s OTC.
One thing that’s interested us lately is all the apparent interest in altcoins that’s coming from institutions, as revealed by headlines like this one. Jerome confirmed that institutions are very interested in altcoins, and sometimes they’re even investing in very small cap altcoins. He also said it’s not clear whether this small cap buying is for speculation or serious investment.
I suppose this explains Coinbase’s peculiar picks for upcoming listings?
Anyways, the most surprising thing Jerome said was that exchanges make a conscious effort not to track which entities are moving the market the most. This is simply because if that information was to ever get leaked, then it could make for very bad press or even accusations of market manipulation – which some crypto exchanges have been accused of in the past.
This ties into the importance of the crypto reports I frequently cover. Jerome said that these reports are treated “like gold” among exchanges and institutional investors, and this is basically because exchanges and institutions don’t actually know what their counterparts are doing. Jerome specified Messari’s crypto report as being particularly important, so check it out.
The last insight Jerome was able to provide was that he’s starting to see institutions from different jurisdictions invest in crypto. Although he couldn’t tell us where because of confidentiality agreements, I suspect one of the regions of interest is the Middle East, specifically commercial hubs like Dubai, which have been issuing lots of crypto licences lately.
It’s safe to say that Jerome’s insights were incredibly valuable, and if you happen to have any insider information of your own, feel free to contact us via the contact form on the Coin Bureau website (scroll down to the bottom). We would love to hear your thoughts, especially when it comes to information that could improve the quality of our content. Thanks again to Jerome for his!
📈 The Script is Flipped 📈
Bitcoin is a tech stock…
Well, that’s at least if you believe some of the latest correlation statistics that the folks over at Arcane Research have compiled. In their most recent report, they have found that Bitcoin’s 30 day correlation with the Nasdaq is at 70%!
This is perhaps the strongest correlation that Bitcoin has had with the index yet. Moreover, a 70% correlation is generally considered to be a “strong statistical relationship”.
On top of this, the report also found that Bitcoin’s correlation with gold is at its lowest level ever at -45%. This is also statistically significant and shows that Bitcoin has been moving in an opposite direction to gold over the past few months.
So, what does this tell us?
Well, based on the past few months of price performance, Bitcoin is exhibiting returns similar to that of a high risk tech stock and less like a safe haven asset. This seems to run contrary to the well-established narrative of Bitcoin as an attractive hedge for market contagion.
Of course, some people will say that past performance is not indicative of future returns – and that is indeed true. However, these statistical relationships between different asset classes are used as inputs in advanced algorithmic trading models. Hedge funds and other institutions use these relationships in order to drive decisions on their Bitcoin trading.
If there is a collapse in the Nasdaq on a particular day, then these algorithms react and proactively sell Bitcoin (vice versa for a rally). What this leads to is a self-fulfilling prophecy where current market movements are driven by assumptions around historical relationships.
These reinforcing market mechanisms make it hard for Bitcoin to decouple from stock market movements. Therefore, we are likely to see this strong relationship between the two asset classes continue playing out for the next few months. So, if you are looking for an asset that could hedge your short term equity market risk, then Bitcoin may not be it.
The key word there is of course short term. Historical relationships don’t hold forever and the BTC / Nasdaq correlation has been negative in the past. I do believe that it will once again decouple and as the correlation approaches 0, it will have less of an ancillary impact on algorithmic trading decisions.
Of course, timing this is hard. But I am firmly of the view that we will see a decoupling towards the end of the year. I also expect to see Bitcoin’s negative correlation with gold become less statistically significant over the same time period.
In short, keep calm and hodl on.
🔥 Deal of The Week 🔥
How do you make the most out of markets that trade 24/7/365?
I mean, sometimes those unique buying / selling opportunities come at us when we least expect it. Moreover, we can’t be expected to have our trading accounts open and primed with every waking hour.
So, is there another way to still monitor these markets without being glued to our screens?
There definitely is, and that’s with automated trading strategies. Pre-programmed algorithms that will buy or sell assets based on unique criteria that you have for it.
I know that may sound complicated, but nowadays, there are tools that allow you to develop those strategies with no coding experience at all.
If that sounds like something you want to learn more about then you probably want to watch my video on the best crypto trading bots.
Those short on time may just want to know which one I personally use and that would be 3Commas.
Also, you can give it a try for FREE! That way you can verify that the subscription is really worth paying for. Also you’ll get an exclusive 50% discount should you want to seal the deal on that subscription too!
🔮 Video Pipeline 🔮
- Crazy Report: How Privacy Coins Can be Compliant?
- Top 10 Biggest Bubbles Ever
- Adoption is Coming: A New Survey!
- Ripple vs. SEC Update: What’s been happening?
- Polkadot vs. Cosmos: Which is best?
- IMF Financial Stability Report: What it means for crypto?
- A TradeFi Scandal For The Ages
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ Top 5 (CeFi) Lending Platforms: Earn Interest While HODLING
✅ Cryptojacking: Deadly Malware or Minor Annoyance?
✅ FTX US Review 2022: The BEST Crypto Exchange for US Traders?
✅ Algorand Review: Is Algo the Future of Finance?
✅ Binance vs KuCoin Review 2022: Which Exchange is the Winner?
That’s all for this week. However, I wanted to give you a big thank you for continuing to support Team Coin Bureau no matter what the markets are doing!
Rest assured we are all working around the clock to continuously raise the bar of our crypto content!
Guy your crypto guy