The world's most important sovereign fund has increased its exposure to Bitcoin, albeit indirectly. Soon, US pensions will open up – more than they do now – to investments in BTC and crypto. BlackRock's buyers seem to have infinite funds, and the companies buying in the market... as well.
It is a very particular moment for the entire sector, which we will need to analyze taking advantage of the August heat, when high temperatures push us to retreat into our thoughts. It is true that the market is very difficult to predict, but we have some signals, both positive and negative, that can be useful to understand in what kind of context we will be forced to move.
1. Even with turbulence, BlackRock's clients do not stop
It is a very interesting factor. The week that has just concluded was characterized by several turmoils in the crypto world, particularly on Thursday and Friday.
2. Ethereum is stronger on Wall Street than Bitcoin
Both in terms of purchases from listed companies and from ETFs (which have a different audience). It is difficult to provide a clear reading, unless we refer to the insights of our director Alessio Ippolito, who explains the factors to consider (easy to calculate) for the altseason.
The appetite, however, has not been short-term. For more than a month now, financial products themed around Ethereum have been moving at a faster pace than those around Bitcoin.
3. Favorable macro environment?
Yes, and it is unlikely to become more favorable than this in the coming weeks. Markets, despite an unencouraging producer price data (much higher than expectations), continue to price in between 2 and 3 cuts by the end of the year.
This is perhaps one of the most important warning signs.
Because we are in a state of evident market over-excitement, which we should discount over time. Or rather: reality will have to align with expectations.
4. The idea of companies buying crypto...
It is already showing the first cracks. Some of the listed companies have lost market capitalization parity compared to the crypto they hold. This is not a good sign, at least for the companies affected by this 'mathematical misfortune.'
It will take blood and sweat to make one's project succeed. Many others, as Matthew Sigel told us in an exclusive interview, will likely become acquisition targets for more established companies.
5. Markets have become more selective, but only to a certain extent
On this topic, we will return in a guide that will be published next week and that will talk about how certain projects are overvalued only thanks to the intervention of VCs and investment firms close to certain exchanges.
If it is true that in this cycle we are seeing madness that is still reduced compared to the previous cycle, it is equally true that perhaps it is just the result of certain crypto project managers learning to appear more credible.
One puts on a tie, speaks the language of Wall Street, and a lot of VaporWare ends up reaching gigantic valuations. Like memes, but on a larger scale.
