Rational Active Allocation

Starting with $BTC ETF news, the first trading day of July saw a significant $130 million ETF inflow, marking the highest inflow since the beginning of June. In contrast, last month experienced consistent substantial outflows.

The first half of 2024 witnessed a surge in enthusiasm for crypto assets, leading to an all-time high for Bitcoin. However, due to price headwinds and the policy environment, volatility has decreased, impacting Bitcoin's performance. Long-term holders have started selling again, while a supply overhang continues to exert pressure on the market (possibility of selling from Mt. Gox depositors and Germany's Federal Police Office). In addition to this, the recent increase in selling by Long-Term Holders of Bitcoin, despite fewer miner sell-offs, indicates market instability and a vulnerable outlook in the short term.

The Fed's preferred inflation measure remained unchanged in May, slightly above the two percent target. Considering the weak GDP and declining consumer confidence, there are hopes for a rate cut in September. We remain cautious and are waiting in cash, however our long term bullish case for Bitcoin is unchanged.

During moments of uncertainty in markets, it is natural to feel stressed about your investments. However, it is important to take a step back and reflect on the long-term fundamentals of your particular investment thesis. From an economic perspective, it is crucial to understand the supply and demand dynamics that drive market movements.

Focusing on these fundamentals, you can better navigate through volatile market conditions and make informed investment decisions and remember, staying informed and focused on long-term goals can help you weather the storms of market uncertainty.

With all this said, let us have a look at current $BTC supply and demand and the impact the halving has had in the past and will have in the future.

Read full article here

The last few weeks have ushered in some volatility in the $BTC market. Markets unfortunately don’t go up in predictable straight lines. Bitcoin is no exception, and although the long term trajectory looks very promising, the retraces are often violent.

After the July 2016 halving, from the beginning of 2017, the bull market had six retraces of more than 30% and a seventh of 24% near the eventual cycle top. See our original blog post with chart here

From the chart, think about where we may be today?

We are paid to be patient, an entry will present itself and from history this asset gives you opportunities. There is always an urge to allocate to the next latest and greatest “mouse trap” (read crypto alt-coins), but remember every cycle creates a new narrative with even more elaborate promises.

“That men do not learn very much from the lessons of history is the most important of all the lessons of history.” – Aldous Huxley

We are currently in the high volatility zone for all risk assets in the financial markets. While we are encouraged by the outlook for the broader crypto and $BTC market in months ahead, the probability of an elevator down move to wash all the late longs is increasing.

We are appropriately positioned for this move, ready to increase our core Bitcoin position and to deploy into selected alt-coins from our $PAXG holdings.

Approx 113k of Bitcoin in Grayscale’s Bitcoin Trust (GBTC) has been on the move since the launch of the ETFs. This will no doubt have had an impact on price volatility in Jan. Coupled with the FTX estate's GBTC sales, we are waiting for a little more weakness to allocate back, however we are open to switching long if we get confirmation. $BTC