Aug 17, 2023

Bitcoin (BTC) is trading around $28,400, after touching the lowest level seen by investors since June 21. The Tie director of content Lawrence Lewitinn breaks down the recent lack of movement in the crypto markets.

Video transcript

Lawrence, we are going to be talking about your most recent newsletter with the tie and some of the data that you unpacked in that. So leverage funds, the CF DC label for hedge funds, commodity trading advisors and the like are getting increasingly bearish when it comes to Bitcoin futures. You have some charts for us, talk to me about what's happening. Yeah. Uh we're, we're seeing right now is, is kind of, it's interesting we're seeing the leverage funds are basically hedge funds um and hedge funds CTAs uh things like that. There, there's, there's been an increase in the amount of say short contracts relative to long contracts that they have outstanding uh in the futures markets. Uh We're seeing that that spread wide and it's the widest it's been in over a year. Uh interesting also to note that asset managers on the other hand, are taking the opposite side. Those are kind of the long term people, et cetera, those guys are mostly long. Um And that that's been spiked up uh since about uh the, you know, the 22 or so, it's late 21 early 22. Um But again, it it, it's just sort of, you know, we're looking at this and saying, ok, well, uh, you know, how are hedge funds doing it and why part of the thing could be that they are looking at it, um, uh, potentially as a hedge if they, if they have any, um, if they have any long positions as a, you know, kind of to offset it. But really, they could also just be super short. Um, so, you know, again, it's something to, to keep in mind, uh, that there could be a bit of short interest right now, uh, in the, in the hedge fund community. When it comes to Bitcoin, they are involved in it but not in a good way. Uh, and we're also seeing just a slight uptick in, in open interest in general. But, uh, again, it's, uh, you know, it still very quiet market. All right, let's, let's take a look at this. Uh, next chart here, Wednesday was a big day with nearly every sector in crypto suffering a sell off. What was going on there? Could this be, um, in anticipation of the Fed's new policies? That's a great question. Uh, you know, this, of course, is something that, um, you know, we, we're seeing some issues whether or not the fed is going to raise rates and, and we know that the, that the fed has, um, the, the, the market's been betting that the fed is doing one and done but recently the notes, the minutes, the fed minutes came out. And I said, well, you know, there might be some room for an extra rate hike or so another 25 basis points. And in general, for the market, we're seeing this sort of nervousness skittishness. We're seeing if you were to look at, uh, the yield curve right now, it just bumped up a little bit. Um, you know, I, everything's kind of rates have gone up in the past couple of days. People are saying, wait, hold on, this could actually be real. And of course, when you raise rates, uh that creates AAA disincentive to take on a risk because you now have a slightly higher, higher hurdle rate, a slightly higher borrowing costs to take leverage positions, etcetera. Uh Even though people say, well, that doesn't necessarily affect crypto. Yes, it does. So, um you have this uh a little bit of nervousness in, in taking on those risks and some of the, some of the sectors that the more um the more adventurous sectors such as uh gaming and uh you know, metaverse stock, uh metaverse, not stocks, although Gary would say that they're secure securities, but tokens are taking a hit again, that the, the, you know, the more risk involved, uh the, the least, the least likely people are to want to hold them compared to other things. All right. On that note, let's talk about the D sector at the beginning of the show. We saw that coin desks D I index is down, we spoke to the Shebaa Metaverse Advisor. The ship Token is down this morning but not all D five Tokens are down. There was one big major um performer talk to us about that. Yeah, thank you. That's a fantastic question. And I, I really, I'm surprised you asked about this. Um So uh we, we have this, uh of course, this is, you know, 11 thing that didn't go up, I should say is, um, is, is, uh, is curve and you, you would have thought curve would have gone up because somebody, I, the, the thieves are, I don't wanna say thieves, I it's such a, the hackers that plundered curve, uh, gave most of their, their curve token back and you think, OK, everything's fine that, you know, that should calm things down. Nope, it did not. But that, that upward to the right thing that you see there, that's store chain that's room. Uh, so there was a lot of hype with this one involving a, a new lending product that they're gonna launch and, oh, it's gonna be great and no fees and this and that. And then, yeah, Wednesday came and unfortunately for them, it looks like, um, they might have some problems here, uh, with some of the coding issues, uh, in Thor Chain, uh, that led to some suspension of some of the services involved there. So, what we could have is that's not going to be that, that this chart won't look the same, let's just say next week because, um, you know, it, it, that might just puncture a hole if you will in Thor Chain, it might make people a little bit nervous. So, while Thor Chain was the big talk of, of uh D I this past week, um, it might be this coming week, but for other reasons, we'll see, we'll see how that goes. We'll see uh what, what comes out of this. But uh you know, again, this is it, you have to remember. This is a relatively small, uh a, a small market when it comes to uh defy tokens and it's relatively small even even in crypto, uh even when it compared to say Bitcoin and E um so you get a lot more volatility, you get a lot more uh ups and downs and, and you get a lot more excitement and buzz. But, you know, one little thing like we saw with curve can blow things up uh in, in a bad way. So, uh buyer beware. So basically, don't go put all your bets on Thor chain just I bet that's it.

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