In this edition of Digital Asset Friday, we will dive into the recent digital asset rally, highlighting the macro forces, the ETH merge, and digital assets correlations with public equities, namely the NASDAQ 100. But first, we will provide a couple of updates on our Compass portfolio and Gemini BITRIA improvements.
Long-term market indicators both on-chain and off-chain point to continued windows of opportunity for long-term investors. Short-term speculators will continue to try and time markets for gains, contributing to expected volatility in digital asset markets.
The investment objective of the Compass portfolio is investing in open source, decentralized, composable digital asset networks in the early to mid-stage that we have high conviction will make up the 5% of networks in the future version of the internet, known as Web 3.
Based on our investment thesis and ongoing research we will be adjusting Compass over the coming weeks to months to stay aligned with our investment objectives. We will send a report outlining the specific actions and rationale on Monday, August 1st. Please don’t hesitate to reach out with any further questions.
Gemini BITRIA – Onboarding Enhancements
I’m happy to report that Gemini BITRIA has started beta testing the enhanced onboarding process for Individual and Joint Taxable accounts with all other accounts to follow in future releases. In the new onboarding process client will no longer work through DocuSign but rather an online type form through a secure link. This will enable same-day KYC.
We are currently testing this out ourselves and creating processes before rolling it out to everyone on Gemini BITIRA. Once ready for release we will be scheduling time to review the process.
Market Update – Digital Asset Rally
With eyes focused on the fed’s decision, GDP numbers, and corporate earnings, most markets moved in tandem this week. GDP came in this week with a decline of 0.9% in the second quarter, making two consecutive quarters of economic contraction. While many define this as confirmation we are in a recession, US officials say not so fast. We also got a 0.75% rate hike from the Fed as they continue to combat inflation.
This has been the trend since 2020, trading in line with the NASDAQ but with greater volatility. Correlations between the NASDAQ’s 100’s price and the top digital assets recently reached their highest in 90 days further providing evidence digital assets as a high beta asset class, riding higher as markets bought the news.
Following anticipated news, markets pushed higher despite the once-perceived bearish rate hikes and GDP decrease in. This has sparked thoughtful debates among macro communities and dank memes in crypto Twitter alike.
Over the last month, we have seen 50%+ recoveries in multiple digital assets (ETH, AAVE, YFI, SNX) and others 70%+ (UNI, MATIC, and COMP). The rally was triggered by news that Ethereum’s mainnet migration towards the consensus beacon chain had a tentative date attached to it: as early as September 19th. Ethereum also reached a new all-time high of Daily Active Addresses highlighting the anticipation of not just investors but users and developers.
Although the recent rally is a welcome reprieve, we caution everyone to maintain discipline in their approach to digital assets. Long-term market indicators both on-chain and off-chain point to continued windows of opportunity for long-term investors. Short-term speculators will continue to try and time markets for gains, contributing to expected volatility in digital asset markets.
Our advice: Now is the time to educate!
Top Digital Asset News
- EY builds Ethereum Based Product
- Kraken Under Investigation
- Chainalysis Courting US Government with New Subsidiary
- SEC Probing Coinbase and Cathie Wood Dumps
- FTX Continues Shopping Spree
- EU Worried About Staffing to Regulate Crypto
- Despite Crypto, Concerns Capital Continues to Flow into Web 3 and DeFi
Webinar: Future Proofing Digital Asset Management
Presented by Blockworks: The digital asset industry is at a critical juncture and the need to build trust has never been more important. This webinar will discuss how the market operates and what steps need to be taken to professionalize the industry.
*Blockworks Research is a strategic partner that Arbor Digital utilizes for data research and analysis in the digital asset space.
Reading: The Value of Bitcoin’s Neutrality
A case for Bitcoin’s monetary value amid a global transformation of the economy from Intotheblock.com analyst Lucas Outumuro.
*Intotheblock is a strategic partner that Arbor Digital utilizes for on-chain research and analysis in the digital asset space.