January 9, 2024
By Joe Pan
7-day view of BTC price as of 3pm HKT (source: Coinmarketcap.com)
Remember the good ol’ days, glued to Bloomberg terminals, chasing those ticker arrows? Yeah, me neither. These days, my inbox brims with daily crypto reports – a deluge of memes, NFTs, DeFi, and more, enough to make your head spin faster than a blockchain on overdrive. It’s a jargon-filled jungle of discord handles and “doxxed” authors (anonymous, for the uninitiated).
Having followed and engaged with analysts across traditional finance and equity markets in my career, the transition to covering the world of blockchain, cryptocurrency, and web3 seems only natural. After all, the core skill of reading between the lines, understanding biases, and extracting key insights remains the same. As both a consumer and moderator of panels and talks by investors and financial analysts, I’ve developed a keen eye for narrative framing and contrarian takes. In the new column, “Joe’s Report on Reports,” I’ll be your go-to guide through the report blizzard. I’ll read them, dissect them, and serve you the juicy bits, so you don’t have to.
First up: Bitcoin’s ETF saga. Everyone’s buzzing about its potential launch, but two reports are betting against the party. Let’s crack open their reports and see what makes them tick.
10x Research’s Contrarian Cocktail:
The “Bitcoin ETF Approval Imminent? Betting against consensus” report by Markus Thielan is a measured yet bold sip of dissent in the face of what many see as a foregone conclusion. Their take? Despite approval whispers, reasons abound to be cautious – and bet against the consensus with some BTC put options. Think technical indicators signaling a nosedive, overleveraged futures markets, radio silence from SEC commissioners, and unresolved concerns behind past rejections. All for the bargain price of 1.6% of your notional value? Sounds like a prudent hedge to me.
Political Punch:
While approval whispers swirl, Markus Thielan throws a political twist into the mix. He argues that despite “frequent meetings” between applicants and the SEC, “all applications fall short of a critical requirement.” and “ we expect the SEC to reject all proposals in January.” Why? It’s political, but perhaps not as you think. He claims the Democratic-led SEC, despite only 2 out of 5 commissioners being Democrats (Gensler and Crenshaw), has been critical of crypto. Chair Gensler’s December remarks and past rejections further fuel his speculations.
Key Findings:
●Analysis: A trading model signaled imminent BTC price drop, futures overleveraged suggesting bet against ETF approval consensus with cheap put options.
●Trading model signaled 7% BTC price drop; market structure showed overleveraged.
●SEC commissioners quiet on ETFs; Chair reiterated crypto compliance concerns. Past rejection rationales not fully satisfied.
●ETF approval is seen as 95-98% certainty by many, but risks remain due to an unchanged market structure.
Conclusion:
The report recommends purchasing BTC put options expiring January 12th at a 40k strike price, currently trading at 1.6% of notional value, as an inexpensive hedge against potentially negative ETF approval news.
Advisor Insights: Friend or Foe of the ETF?
The second report – “Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets” by Bitwise and VettaFi paints an interesting picture. Only 39% of advisors expect a 2024 spot ETF approval, but 88% see it as a major catalyst and are ready to allocate. This gap, cherry-picked by some media as a “no confidence vote,” actually hints at significant latent Bitcoin demand.
Key Findings:
●Only 39% expect an ETF in 2024, but 88% are waiting to invest.
●Just 19% can currently buy crypto for clients, highlighting restricted access.
●Crypto allocations among advisors doubled from 22% to 47%.
●59% report independent client crypto investments, outside advisor relationships.
●88% fielded client crypto questions in the past year, showing strong interest.
The verdict: Advisors are cautious, but client interest is undeniable. Post-approval, latent demand could explode.
Meanwhile, the “approval is imminent” camp continues to pour champagne. According to a Reuters report on Friday Jan 5, issuers expect final approval by Wednesday, with the SEC requesting “minor changes.”
As the saying goes, “we don’t know what we don’t know.” Come January 10th, someone’s cracking open bubbly, whether it’s to toast Bitcoin’s meteoric rise or drown their sorrows in a mojito. Buckle up, folks, it’s gonna be a wild ride.
About the author
Joe Pan is producer and editor at NFTMetta.com.
