Is Crypto Summer Back?

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The crypto industry has been going through a rather tumultuous time over the past 2 years, with one bearish catalyst leading to the next.

Using Bitcoin as an “index” for the crypto industry, we can see that volatility raged as Bitcoin crashed around 75% from its all-time high of around $70,000 to a low of $16,000 before gaining momentum to $30,000 is where we are today.

And we can see it in the Bitcoin chart. As of this writing, Bitcoin is at 2x its $16,000 low, which supports my thesis that we are already in the midst of some form of “crypto-recovery”.

While we certainly don’t need an introduction to the events that unfolded, I want to draw your attention to the recovery of the crypto industry.

If you wished you had entered the last round earlier, then take note now! The crypto industry has started to recover from the chaos!

Here I explore:

Is Crypto Summer Here?

2 positive catalysts for crypto

Many may argue that cryptography is in its infancy and the technology behind it can be used for the best of mankind. While there are indeed some real use cases (one of my personal favorites is where blockchain is used to issue educational certifications to prevent fraudulent certification), what I think is the catalyst to most important short term for cryptography is the idea of ​​accessibility.

Unknown to many, cryptocurrency trading is actually not as accessible to the general market as one might think. Although it is easy to set up a crypto brokerage account on a personal basis, many institutions and hedge funds do not have direct exposure to cryptocurrencies, whether due to accounting, risk, security and financial issues. regulations.

Temasek, for example, has no REPORTED cryptocurrency in their wallet, however, they are exposed to the industry through their “investment” in FTX. (Remember that saga? I still think they got away with it easily).

We have to keep in mind that to this day the cryptocurrency industry is still very unregulated, so many SWFs are still on the sidelines when it comes to exposing their portfolios. to such assets.

So, regarding the idea of ​​accessibility, we look very specifically at how Smart Money (institutions and hedge funds) can be directly involved in cryptocurrency trading.

To that end, there have been 2 events within the crypto scene that have surfaced lately which I believe are bullish for the industry as they are indeed a step forward in making cryptography accessible to Smart Money.

Catalyst 1 – Blackrock Spot Bitcoin ETF

The world’s largest asset manager, BlackRock Inc., filed for a spot Bitcoin ETF in June, sparking a new wave of speculation that the long-illusory investment product would finally gain SEC approval. . The BlackRocks app, in turn, led to a major rally in the crypto market and a wave of similar ETF requests and new submissions from issuers such as Fidelity Investments and WisdomTree Inc.

Why Crypto and Wall Street Yearn for Spot Bitcoin ETFs

This is a bullish catalyst as it would allow Bitcoin itself to be traded on an exchange like any other stock.

Also, it is important to know that Blackrock is the lead applicant for this Bitcoin ETF. This calls for some speculation because in 2017 Blackrock wasn’t exactly an advocate for these assets:

What I find most interesting about Blackrock’s application for this ETF is that based on past filings, the SEC has rejected about 30 other such applications. Blackrock is therefore not the first asset manager to request such an ETF. However, in terms of ETF application success rate, Blackrock had 575 approvals to 1 rejection.

As a result, investors are now speculating that Blackrock knows “something” that others don’t because they wouldn’t be foolish enough to “tarnish” their application’s success rate if they knew that application would be rejected. (Pause and think about it for a moment)

If Blackrock’s app is successful, it would be a major milestone and a HUGE catalyst for crypto, as all the other rejected apps would also most likely be approved as “why can’t I Blackrock?”.

This would indeed add a lot of liquidity to the market and could potentially be the start of a new bullish rally for Bitcoin.

Catalyst 2 – Digital Asset Exchange EDX Markets

A consortium of leading brokers, global market makers and venture capital firms has announced the launch of EDX Markets (EDXM), a first-of-its-kind exchange that will meet the latent demand for trading digital assets by enabling safe and compliant trading of digital assets through trusted intermediaries.

Digital Asset Exchange EDX Markets Launched

News of crypto exchange collapses make more viral headlines, but we don’t get much news of new exchanges setting up. Originally scheduled for the fourth quarter of 2022, the launch of EDX was delayed until recently when it launched earlier this month with only 4 tokens on the platform (Bitcoin, Bitcoin Cash, Ethereum and Litecoin ).

The launch of EDX Markets marks another milestone in making crypto accessible to Smart Money, as with increased security and more transparent technology, EDX aims to provide greater liquidity to reduce spread when trading, enabling “better prices for investors than those offered by the existing cryptocurrency. Exchanges”.

Backed by some of the biggest names in the financial world, including Charles Schwab, Citadel Securities, Fidelity Digital Assets and Sequoia Capital, EDX should be well adopted by institutions given the strength of their network.

Bitcoin Techniques

Since recovering from its lows of $16,000, here is some interesting information on Bitcoin’s price action:

Bitcoin is currently trading within the previous range of support round resistance between $29,000 and $32,000. (Shown in yellow) For this short-term bullish rally to continue, we need to see the price action break out of this range and ideally close above $32,000 for it to be seen as a pattern of continuation. Since the formation of the long-awaited GOLD CROSS (typically a sign that the rally has turned from bearish to bullish), Bitcoin’s price action has continued to watch the 200-day moving average as a dynamic support level bouncing twice. This year . (Green Arrow) Will we see “sunnier” days for crypto?

I approach cryptocurrency with caution, but maintain a sense of optimism.

Although I recognize their potential, I do so by ensuring that they do not occupy more than 10% of my overall assets. As such, any short-term bullish or bearish action has no impact on my portfolio.

Blackrock’s ETF app is indeed timely and although this app has been meeting with some resistance lately, it is likely to be adopted, in which case hopefully this will end up being a “open the floodgates” moment for the crypto industry.

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