Hello everyone,
The purpose of this letter is to inform you about the current situation of the crypto-asset market as well as recent news in this field. This letter is not investment advice, but merely a sharing of my personal point of view.
News
The euro is celebrating its 25th anniversary: has it succeeded in its initial mission? With a bit more perspective, we realize that beyond having lived through a period of high inflation since the Covid-19 crisis, The euro has lost nearly 42 % of its value since 1999. A figure that contrasts with the price stability claimed by the ECB President.
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Spot Bitcoin ETF: The Securities and Exchange Commission (SEC) gives the green light for a series of applications. In a historic turning point for the cryptocurrency world, the US Securities and Exchange Commission (SEC) has approved spot Bitcoin ETFs, marking a major milestone in the integration of cryptocurrencies into the traditional financial system.
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Ethereum (ETH): The Dencun upgrade is landing on the Goerli testnet. This night (01/17/24), the Ethereum Goerli testnet hosted the long-awaited Dencun upgrade. This is an important milestone before deployment on other test networks as well as on the mainnet.
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The United States now holds more than $8 billion in Bitcoin (BTC) The United States government and its reserve of 194,250 Bitcoins (BTC) surpass even that of MicroStrategy. Thus, the United States is now the world's largest holder of Bitcoin. This $8.45 billion arsenal comes from seizures, notably in the Bitfinex case and the fall of the Silk Road black market.
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Bitcoin: The number of merchants accepting BTC reportedly almost tripled in 2023. According to BTC Map data, the number of merchants accepting Bitcoin (BTC) as a payment method almost tripled in 2023. What can be learned from these figures?
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In Europe, MiCA is increasingly attracting crypto investors. By adopting the regulation Crypto asset market (MiCA) last June, has Europe initiated a virtuous movement of economic growth for the crypto sector on the Old Continent? That is what the figures from a report published by Kaiko, a company specializing in Web3 data research and analysis for professionals, seem to show.
Fundamental Analysis
Source : https://www.coingecko.com/fr
At the time of writing, the price of Bitcoin is 42,624 $ (on 01/18/24).
The communicating vessels between Bitcoin and Altcoins:
It is easy to observe that bull market cycles have two major, distinct phases:
The first phase marks the beginning of the rally with Bitcoin outperforming the rest of the market. The second and final phase of the cycle is when altcoins outperform.
We believe that the first phase, characterized by BTC's outperformance, can be explained by several reasons. First of all, Bitcoin is the most widely adopted, most liquid digital asset that enjoys predominant trust, which prompts many investors to focus exclusively on it. In the second phase, investors turn to new innovations and invest in themes such as ICOs, DeFi, NFTs, etc.
Below is a chart from Pantera Capital that highlights Phase 1 and Phase 2. The golden curve, which represents the altcoin market share, decreases during Phase 1 and increases sharply during Phase 2.
Roughly 60 to 70 % of the time, the altcoin market share increases during a bull market.
Pantera Capital
What is surprising is that the magnitude of Altcoins' outperformance at the end of a bull market makes it more attractive to maintain constant exposure to these Altcoins, provided they have strong fundamentals, rather than remaining exclusively in Bitcoin all the time.
That is why, in the long term, judicious token selection becomes crucial, as outperformance will depend on each individual case and will not necessarily be limited to a specific sector. Ultimately, this is similar to stock picking, where the proper choice of each stock is paramount.
Taking profit?
Sometimes, during major market events, such as the approval of spot Bitcoin ETFs, we can see coins that have been dormant for a long time react. This also happens during moments of market euphoria, as well as during halvings or major corporate bankruptcies.
The degree of unrealized profits and losses for long-term holders can be measured by the Glassnode chart below. This metric recently reached a significantly positive point at 0.55. This is a significant resistance level. This does not indicate that we are close to a top, but rather that this resistance around 45,000 $ will be difficult to break through.
Glassnode
Maybe a local high?
As these older coins are reintroduced into monetary circulation, they are contributing to what is currently the largest profit-taking event since the all-time high reached in November 2021. The peak of realized profit during this cycle was recorded on January 4 with locked-in daily profit exceeding $1.3 billion. Yet, the coins were traded at higher values.
Taking profits is a common practice during periods of an upward trend in the market. The crucial question remains whether the new incoming demand will be sufficient to absorb the whole thing.
Glassnode
The beginning of full adoption?
In our last letter, we spoke about the imminent approval of spot bitcoin ETFs and their long-term positive influence on prices. This is now a reality: the eleven spot bitcoin ETFs were approved on January 10, 2024. From the very first day, trading volumes broke the previous record, reaching 4.5 billion $!
Large institutions now have secure and regulated access to Bitcoin, which marks a major milestone in Bitcoin's lifecycle and the beginning of full adoption!
Our service
We offer a discretionary portfolio management service specializing in digital assets. We provide comprehensive, end-to-end human support in this space by personalizing your portfolio allocation according to your risk profile and situation.
With our turnkey management approach, you can take advantage of industry trends without worrying about digital asset selection, in-depth token research, volatility, arbitrage, and more. You simply need to review your monthly reports and invest regularly, adopting a long-term perspective (4 years and more).
We do not engage in daily algorithmic trading; we focus exclusively on long-term investments in projects we know and understand. Our monthly portfolio rebalancing is accompanied by an in-depth analysis of the assets, with a particular focus on their tokenomics.
Check out our website: https://www.mereau-finance.com/
For any questions, observations, or if you would like to learn more about our services, please feel free to contact us by email at tristan.g@crypto-assets-management.com or to schedule a brief phone call afterwards this link.
Discovery Pack
Investment of under €20,000
- No admission fee
- Management fees: 2 % / year
- Performance fee: 20 % excl. VAT on capital gains (High Water Mark method)
- Exit fee: 3 %
- Minimum subscription: €5,000
- Commitment period: None
Premium Pack
Investment of more than €20,000
- No admission fee
- Management fees: 2 % / year
- Performance fee: 20 % of the performance above the benchmark index*
- Exit fees: None
- Minimum subscription: €20,000
- Commitment period: None
We are saved with the AMF under the registration number for digital asset buy/sell activities against legal tender and digital asset exchange against other digital assets: E2023-084.
— Warning —
This is not investment advice, no one can predict the future.
You are solely responsible for your investment decisions.
We are not responsible for losses following a decision made on the basis of the information in this letter.
