{"id":2721,"date":"2023-07-21T16:06:22","date_gmt":"2023-07-21T14:06:22","guid":{"rendered":"https:\/\/www.mereau-finance.com\/letter\/lettre-n27-decorrelation-rythmes-de-recuperations-nous-sommes-psan\/"},"modified":"2023-07-21T16:06:22","modified_gmt":"2023-07-21T14:06:22","slug":"letter-n27-decorrelation-recovery-rhythms-we-are-psan","status":"publish","type":"letter","link":"https:\/\/www.mereau-finance.com\/en\/letter\/lettre-n27-decorrelation-rythmes-de-recuperations-nous-sommes-psan\/","title":{"rendered":"Letter No. 27: Decoupling, recovery rhythms, we are PSAN!"},"content":{"rendered":"

Hello everyone,<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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News<\/h3>\n\n\n\n
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Gold and Bitcoin: strong allies against economic uncertainty?<\/a> Over the past few months, the U.S. economy has been a source of growing concern, particularly due to the risk of bank failures, debt defaults, and de-dollarization that could affect the dollar's status as the global reserve currency. In this context, can assets like gold and Bitcoin assume the role of safe havens and offer effective protection?<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

\u00abBitcoin is digital gold, according to the CEO of BlackRock<\/a>. In an interview with Fox Business regarding the filing for a spot Bitcoin ETF, Larry Fink asserted his desire to \u00abdemocratize cryptocurrencies.\u00bb Although very critical of this asset class in 2017, the CEO of asset manager BlackRock now describes Bitcoin as \u00abdigital gold.\u00bb.<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Cryptocurrency Survey: 88 % of institutional investors are optimistic<\/a>. According to a survey conducted by Binance Research, we learn that 88 % of the institutional investors surveyed feel confident about the cryptocurrency ecosystem for the coming decade. What are the other highlights of this study?<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Aave: the decentralized stablecoin GHO arrives on the Ethereum mainnet (ETH)<\/a> The decentralized finance protocol Aave has crossed a major new milestone by officially deploying its decentralized stablecoin GHO, following a massive vote of support from its community. As of now, users can mint GHO by depositing cryptocurrencies as collateral on Aave.<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Cryptocurrency Survey: 88 % of institutional investors are optimistic<\/a>. According to a survey conducted by Binance Research, we learn that 88 % of the institutional investors surveyed feel confident about the cryptocurrency ecosystem for the coming decade. What are the other highlights of this study?<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Ethereum (ETH): Linea, ConsenSys's layer 2, launches its zkEVM mainnet<\/a>. This Ethereum (ETH) layer 2, based on zk-rollup technology and compatible with the Ethereum Virtual Machine (EVM), will deploy its mainnet for the general public as early as next week. Developers can already begin implementing their applications on the network.<\/p>\n\n\n\n

\u2013<\/p>\n\n\n\n

Ethereum: the famous meal voucher tokenized via Arbitrum?<\/a> Cryptocurrency blockchain networks enable a multitude of innovations. Practical use cases are multiplying accordingly. Thus, the French group Edenred plans to digitize in token form the Ticket Restaurant, well known to the general French public. The initial tests are taking place on Arbitrum (ARB), the layer 2 scaling solution of the Ethereum (ETH) network.<\/p>\n\n\n\n

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Fundamental Analysis<\/h3>\n\n\n\n
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Bitcoin's price over the last six years in euros and on a logarithmic scale.
Source : https:\/\/www.coingecko.com\/fr<\/a><\/figcaption><\/figure>\n\n\n\n
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As of this writing, the price of Bitcoin is 30,000$ (July 19, 2023).<\/p>\n\n\n\n

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Digital assets are uncorrelated with other asset classes and interest rates:<\/span><\/strong><\/h4>\n\n\n\n
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Throughout their history, digital assets have, on average, been uncorrelated with interest rates and, therefore, uncorrelated with other asset classes closely linked to interest rates, such as stocks, bonds, and real estate. <\/p>\n\n\n\n

There was indeed a period of high correlation over the last two years, mostly due to the large amount of money \u00abprinted\u00bb by our central banks. This mass of liquidity was primarily sent into the bond market, and then trickled down into other asset classes (stocks, real estate, gold, etc.).<\/p>\n\n\n\n

Bitcoin's correlation with the S&P 500 has dropped back below 0.1 as we can see in the chart below:<\/p>\n\n\n\n

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Bitcoin correlation with the S&P 500.
Pantera Capital<\/figcaption><\/figure>\n\n\n\n
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Indeed, if we step back, the outperformance of Bitcoin and Ethereum since January 1, 2020, compared to other asset classes is overwhelming:<\/p>\n\n\n\n

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Recovery rhythms: <\/span><\/strong><\/h4>\n\n\n\n
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During every bear market, there are significant capital outflows. We can notice these capital outflows on the chart below. We can see the realized capitalization along with its percentage decline.<\/p>\n\n\n\n

It is important to note that there is a period of \u00abrecovery\u00bb for capital after every bear market. In previous cycles, these periods lasted between 95 and 239 days. We are currently within the average recovery range (188 days). However, we believe that the recovery period for this cycle will be slightly longer, ranging from 200 to 300 days.<\/p>\n\n\n\n

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Percentage decrease recorded in Bitcoin's realized capitalization
Glassnode<\/figcaption><\/figure>\n\n\n\n
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We can break down the \u00abpain\u00bb of realized losses for short-term and long-term investors in previous cycles in the chart below. We note that this latest cycle has been particularly deep and painful with a 90% loss for short-term holders (STH). However, as with all other cycles, the recovery period is underway. This chart also highlights the fact that once again, we should favor long-term holding over short-term holding.<\/p>\n\n\n\n

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Realized losses relative to short- and long-term holders on a 90-day moving average.
Glassnode <\/figcaption><\/figure>\n\n\n\n
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We have become a PSAN (Service Provider<\/strong><\/strong><\/span> Digital Asset Services<\/span>)<\/strong> !<\/h4>\n\n\n\n
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We are thrilled to announce that we are officially registered as a Digital Asset Service Provider (DASP) with the Autorit\u00e9 des march\u00e9s financiers (AMF) \u2013 under the number E2023-084.<\/a><\/p>\n\n\n\n

This is the culmination of over a year of work with the regulator. It is also the continuation of a great adventure with Cedric Teissier<\/a> and Jocelyn LEON-DUFOUR<\/a> in the development of our discretionary digital asset portfolio management solution with tailored human support.<\/p>\n\n\n\n

With our end-to-end management service, you will no longer have to worry about a lack of time or experience and can diversify your wealth with complete confidence.<\/p>\n\n\n\n

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Our service<\/strong><\/h3>\n\n\n\n
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We offer a discretionary portfolio management service specializing in digital assets. We provide comprehensive, end-to-end human guidance in this space by tailoring your portfolio allocation to your risk profile and situation. <\/p>\n\n\n\n

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Our turnkey management allows you to take advantage of this sector's growth without worrying about choosing the digital assets to put in your portfolio, conducting in-depth token research, dealing with volatility, or handling rebalancing, etc. All you have to do is read your monthly reports and invest regularly with a long-term horizon (4 years and more). <\/p>\n\n\n\n

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We do not engage in algorithmic trading or day trading; we invest for the long term in projects that we know and understand. We make monthly rebalancing adjustments in the portfolios and conduct in-depth research on the assets (especially their tokenomics) that we include in our portfolios. <\/p>\n\n\n\n

Check out our website: https:\/\/www.mereau-finance.com\/<\/a><\/p>\n\n\n\n

If you have any questions, comments, or would like to know more about our service, please feel free to contact us at this email address: tristan.g@crypto-assets-management.com<\/a> or to schedule a phone appointment with us via this link.<\/a><\/p>\n\n\n\n

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Discovery Pack<\/strong><\/h2>\n\n\n\n
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Investment of under \u20ac20,000 <\/strong><\/p>\n\n\n\n

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