#altszn… for now.

There’s no doubt that we’re in the midst of a strong alt cycle led by Ethereum which broke previous all time highs this week and is currently sitting at~$2800. In fact, until this week we haven’t seen Bitcoin’s dominance drop below 50% since July 2018.

The Bitcoin dominance chart above shows higher lows since they started to matter when “competitors” started entering into the market late 2017/2018.

I know my place and it is not to dive into technical analysis — I’ll leave that to the pros. I’ll also say that this is not financial advice. I never thought I’d ever have to write “this is not financial advice” but last week’s recap got taken down from LinkedIn — I guess “HODL” is considered advice nowadays.

Fundamentally speaking, I’ve noticed a pattern over the years that in layman’s terms looks something like this: BTC goes for a run > takes a breather > Alts play catch up till they’re gassed > BTC finds its legs and blows past its inferiors.

Since the alt market (looks like it) has established itself as something that’s here to stay, Bitcoin seems comfortable at 60%-70% dominance. So by looking at the chart, it appears Bitcoin has some catching up to do and it seems rather imminent. I think that a catalyst to these cycles is that investors seem to agree that Bitcoin is the future. So they’re getting into alts to try to outperform BTC hoping that they can roll gains back into more BTC than they would’ve been able to buy if they went direct to BTC — risky game. It seems that everyone can agree that cash is trash and subsequently, investors are now pricing their gains in BTC vs. USD — which might be another reason why we’re not seeing massive 50%+ pullbacks like we’ve seen in previous cycles.

What we saw at the desk

This week felt slow compared to what we saw last weekend. I mentioned in last week’s note that we were a net seller during the week but oh boy did that flip come the weekend. Our clients found the bottom and absolutely smashed the buy button making it the biggest weekend we’ve ever had — all on the buy-side and flows were nearly exclusively into BTC.

This week was a bit choppy and had clients with cash on the sidelines who missed the dip waiting to see which way we’d breakout before deploying.

WTF is a Spezialfond?

Until this week I had absolutely no idea. In my head I read it in a German accent and my best guess was that it meant “special fund.”

Either way, something huge is about to go down and I thought I’d take a quick sec to highlight since I haven’t really seen anyone talking about it.

In Germany, new legislation as of July 1 will enable Spezialfonds — the most popular institutional investment fund — to allocate up to 20% to Bitcoin and other crypto assets. Currently there are ~4,000 of these funds with new ones being set up by investors such as financial institutions, insurance companies, and pension funds who will now be eligible to invest in Bitcoin and other crypto assets.

To give you an idea of the magnitude of what this could mean for the market — ~€1.2T ($1.8T) is invested into Spezialfonds and currently there is 0% in crypto assets (BTC market cap is ~$1T). If Spezialfonds choose to place even a 1% fund allocation in BTC, the impact would be massive.

The German 10yr interest rates at abysmal -23bps creates a powerful incentive for fund managers to take a close look at Bitcoin such as many other institutional investors have over the past year.

Bullish.

Oh…and this week Nexon became the first publicly traded company in Japan & South Korea to buy bitcoin with their announced $100 million purchase.

Probably nothing.

In case you missed it…

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Satstreet serves private Canadian clients including some of the largest Bitcoin mining operations, institutions, and high net worth individuals. Satstreet has raised initial funding from Round13 Capital and several prominent investors.

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Co-Founder @ Satstreet

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Mike Nasser

Mike Nasser

Co-Founder @ Satstreet

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