- Introducing the new “Crypto Market Compass” – your weekly guide to successfully navigate Bitcoin & Cryptoasset Markets
- Featuring the new “Cryptoasset Sentiment Index” – a composite index combining cryptoasset sentiment, flows, on-chain, and derivatives metrics
- Cryptoasset Sentiment remains elevated following the election of Javier Milei as next Argentine president (Chart of the Week)
Chart of the Week
Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NissonHedge, alternative.me, ETC Group
Performance
Last week, cryptoassets mostly went sideways as the market was looking for new catalysts. Despite a relatively strong outperformance by high beta cryptoassets such as Solana, overall altcoin outperformance remained somewhat muted compared to the prior week.
Meanwhile, traditional assets such as global equities managed to gain significantly over the last week on the back of a continuing improvement in cross asset risk appetite which was due to a further repricing of the US Dollar (weaker) and monetary policy expectations (easier).
Overnight, the news broke that the libertarian and pro-Bitcoin candidate Javier Milei was elected as the new president of Argentina which buoyed cryptoasset market sentiment somewhat. In that context, overall cryptoasset sentiment remains somewhat elevated which implies that, barring any short-term approval of a spot Bitcoin ETF in the US, a short-term pull-back appears to be quite likely (Chart of the Week).
Cross Asset Performance (Week-to-Date)
Source: Bloomberg, Coinmarketcap; performances in USD except Bund Future
Top 10 Cryptoasset Performance (Week-to-Date)
Source: Coinmarketcap
Among the top 10 crypto assets, Solana, Dogecoin, and Bitcoin were the relative outperformers.
However, overall altcoin outperformance vis-à-vis Bitcoin has continued to be fairly muted. Only 20% of our tracked altcoins managed to outperform Bitcoin on a weekly basis.
Sentiment
Our in-house Cryptoasset Sentiment Index has increased following the Argentine election outcome and is now firmly in bullish territory. At the moment, 13 out of 15 indicators are above their short-term trend.
Compared to last week, we saw major reversals to the upside in the Altseason index and BTC Put-Call Volume Ratio.
The Crypto Fear & Greed Index also remains in "Greed" territory as of this morning.
Meanwhile, our own measure of Cross Asset Risk Appetite (CARA) increased significantly last week on the back of a further repricing of the US Dollar (weaker) and monetary policy expectations (easier). This may explain the ongoing significant inflows into cryptoasset ETPs as well (see further below).
Performance dispersion among cryptoassets has declined slightly compared to last week but continues to be relatively high. In general, high performance dispersion among cryptoassets implies that correlations among cryptoassets have decreased which means that cryptoassets are trading more on coin-specific factors and that diversification among cryptoassets is high.
At the same time, as mentioned above, altcoin outperformance has continued to be low with only 20% of altcoins outperforming Bitcoin on a weekly basis. In general, low altcoin outperformance is a sign of low risk appetite within cryptoasset markets.
Flows
Last week, we saw yet another week of significant net fund inflows into global cryptoasset ETPs.
In aggregate, we saw net fund inflows in the amount of +189.8 mn USD (week ending Friday).
The very large majority of these inflows focused on Bitcoin ETPs (+161.8 mn USD) and Altcoin ex ETH ETPs (+18.8 mn USD). Ethereum ETPs attracted +9.0 mn USD in net fund inflows last week on the back of the news that BlackRock has officially filed for an Ethereum ETF in the US as well.
Meanwhile, thematic & basket crypto ETPs only experienced minor net fund inflows (+0.3 mn USD) last week.
The NAV discount of the biggest Bitcoin fund in the world - Grayscale Bitcoin Trust (GBTC) – remains relatively narrow at the moment with around -10%. In other words, investors are assigning a probability of around 90% that the Trust will ultimately be converted into a Spot Bitcoin ETF.
Moreover, the beta of global crypto hedge funds to Bitcoin over the last 20 trading remains relatively low with around 0.8, implying that global crypto hedge funds are under-exposed to the market.
On-Chain
Overall, on-chain activity in Bitcoin remains relatively high at the moment.
For instance, although active addresses and new addresses on the Bitcoin blockchain have decreased slightly compared to last week, the Bitcoin mempool remains near capacity. The mempool is the queue of unconfirmed Bitcoin transactions.
In aggregate, we saw net fund inflows in the amount of +189.8 mn USD (week ending Friday).
The very large majority of these inflows focused on Bitcoin ETPs (+161.8 mn USD) and Altcoin ex ETH ETPs (+18.8 mn USD). Ethereum ETPs attracted +9.0 mn USD in net fund inflows last week on the back of the news that BlackRock has officially filed for an Ethereum ETF in the US as well.
Meanwhile, thematic & basket crypto ETPs only experienced minor net fund inflows (+0.3 mn USD) last week.
The NAV discount of the biggest Bitcoin fund in the world - Grayscale Bitcoin Trust (GBTC) – remains relatively narrow at the moment with around -10%. In other words, investors are assigning a probability of around 90% that the Trust will ultimately be converted into a Spot Bitcoin ETF.
Moreover, the beta of global crypto hedge funds to Bitcoin over the last 20 trading remains relatively low with around 0.8, implying that global crypto hedge funds are under-exposed to the market.
Overall, on-chain activity in Bitcoin remains relatively high at the moment.
For instance, although active addresses and
new addresses on the Bitcoin blockchain have decreased slightly compared to
last week, the Bitcoin mempool remains near capacity. The mempool is the queue
of unconfirmed Bitcoin transactions.
A high amount of transactions in the mempool usually indicates high demand for Bitcoin transactions and block space
in general. The mean amount of transactions per block is also hovering near
all-time highs above 4000 transactions per block at the moment.
This also shows up in the relatively
elevated level of transaction fees as both median and mean relative fee in the
Bitcoin mempool have increased to the highest level since May 2023 when the
BRC-20 frenzy clogged the network.
In that context, the daily level of
inscriptions has recently increased to a new all-time high as well most of
which are text-based/BRC-20 inscriptions. The transaction count share of
inscriptions has regularly clocked above 60% recently, implying that 3 out of 5
Bitcoin transactions contained an inscription on average.
Meanwhile, Bitcoin’s hash has also reached
a new all-time high last week with 551 EH/s recorded just yesterday. So,
Bitcoin miners continue to increase their hash rate ahead of the upcoming
Bitcoin Halving which is anticipated next year in April.
Exchange activity is still biased towards
inflows. However, net exchange inflows of BTC have recently subsided as well.
Over the last 7 days, most wallet cohorts experienced net inflows with the
exception of wallets with a size of 1 mn – 10 mn USD which saw net outflows to
the tune of 11.8k BTC from exchanges. In contrast, net exchange volumes for
Ethereum remained very biased towards outflows. ETH exchange balances have
recently reached a fresh 7-year low implying increasing supply illiquidity of
Ethereum which tends be bullish.
On a very positive note, accumulation
activity across various BTC wallet cohorts remains near the strongest observed
year-to-date.
Derivatives
Open interest in both BTC futures and
perpetuals decreased last week. CME remains the biggest futures market in terms
of open interest ahead of Binance this week. The 3-months annualized rolling
basis in BTC futures has decreased somewhat compared to last week but remains
near year-to-date highs of around 7.5% p.a. BTC perpetual funding rates have
mostly remained positive throughout the week across various exchanges.
On the other hand, BTC options open
interest mostly went sideways in BTC-terms but still hovers near all-time highs.
There was no significant change in relative put-call open interest for BTC
options and only a minor spike in relative put-call trading volumes in favour
of puts last week.
biased towards call options judging by the elevated 25-delta skew which
currently shows an implied volatility premium of around 8.7% for
delta-equivalent BTC call options with 1-month expiry.
Bottom Line
- We are introducing the new “Crypto Market Compass” – your weekly guide to successfully navigate Bitcoin & Cryptoasset Markets.
- It features the new “Cryptoasset Sentiment Index” – a composite index combining cryptoasset sentiment, flow, on-chain, and derivatives metrics.
- Cryptoasset sentiment remains elevated following the election of Javier Milei as next Argentine president (Chart of the Week).
Appendix
Bitcoin Price vs Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, ETC Group
Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, ETC Group; *multiplied by (-1)
Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, ETC Group
Crypto Sentiment Indicators
Source: Coinmarketcap, alternative.me, ETC Group
TradFi Sentiment Indicators
Source: Bloomberg, NilssonHedge, ETC Group
Crypto Options' Sentiment Indicators
Source: Glassnode, ETC Group
Crypto Futures & Perpetuals' Sentiment Indicators
Source: Glassnode, ETC Group; *Cumulative daily absolute change in BTC OI multiplied by sign of BTC price change
Crypto On-Chain Indicators
Source: Glassnode, ETC Group
Source: alternative.me, Coinmarketcap, ETC Group
Bitcoin vs Global Crypto ETP Fund Flows
Source: Bloomberg, ETC Group; Only ETPs & Grayscale Trusts
Global Crypto ETP Fund Flows
Source: Bloomberg, ETC Group; Only ETPs & Grayscale Trusts
Grayscale Bitcoin Trust's NAV Premium/Discount
Source: Bloomberg, ETC Group
Source: Coinmarketcap, Bloomberg, NilssonHedge, ETC Group
Altseason Index
Source: Coinmarketcap, ETC Group
Bitcoin vs Crypto Dispersion Index
Source: Coinmarketcap, ETC Group; Dispersion = (1 - Average Altcoin Correlation with Bitcoin)
BTC Net Exchange Volume by Size
Source: Glassnode, ETC Group
Wichtige Hinweise
Die dargestellten Meinungen spiegeln eine Einschätzung des Marktumfelds zu einem bestimmten Zeitpunkt wider und stellen weder eine Prognose zukünftiger Ereignisse noch eine Garantie für zukünftige Ergebnisse dar. Sie unterliegen weiteren Diskussionen, Ergänzungen und Änderungen.
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Nichts in dieser Mitteilung ist als Empfehlung, Befürwortung oder Aufforderung zu einer Investitionstätigkeit auszulegen. Leser werden aufgefordert, gegebenenfalls unabhängige rechtliche, steuerliche oder finanzielle Beratung in Anspruch zu nehmen.
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