Below is a quick note on the recent tide in BTC and crypto assets from Justin Chuh, a senior trader with regulated digital asset manager, Wave Financial. Hedge fund letters, conferences and other short-lived highs in the first quarter of 2021 Bitcoin, Ether and almost every other of the more than 8,000 cryptocurrencies in the $ 2 trillion class posted relatively short-lived highs (…)
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This story originally appeared on ValueWalk
Below is a quick note on the recent tide in BTC and crypto assets from Justin Chuh, a senior trader with regulated digital asset manager, Wave Financial.
Q1 2021 Hedge Fund Letters, Conferences, and More
Bitcoin, Ether, and almost every other of the over 8,000 cryptocurrencies in the $ 2 trillion class posted relatively short-lived highs last week. The main pair and virtually everything else fell over 10% over the weekend, with Bitcoin back below the familiar $ 60,000 mark and Ether lucky enough to have maintained the new $ 2,000 floor.
Almost everything was "mooning" and moving upwards in unison so quickly that we forgot to look at the big picture and wonder what is actually going on in the crypto room now.
Bitcoin and cryptocurrencies have established themselves as valid asset classes, but any wealth continues to be highly correlated to Bitcoin, and sentiment can still be quite fragile. A meme sits now and is one of the top cryptos by market capitalization. News of government action, whether unsubstantiated rumors of US Treasury Department handing out AML charges or Turkish-Indian governments banning cryptos; or power outages in China can crash the market as everyone rushes to the exits. But where does the money go when the crypto market is sold out? Back to the past and into overvalued public stocks or government bonds with negative real returns? Or will it stay in the future but in better memes that solve the scalability problem and the environmental narratives?
The Influence of the BTC Flood on Other Cryptos
It really has to be altcoin season. Many "investors" seem to find it difficult to amass bitcoin and ether, but rather to build portfolios around them. We see the emergence of the cohort "What about this token that my friend, who has been in crypto since 2017, told me about", which contributes to the volatility that tears up the stomach. Institutional money is still flowing into Bitcoin and Ethereum, and most retail investors will likely do better to just buy and hold a portfolio of these two assets than read their crypto friend's latest and greatest tip.
BTC can likely break through $ 60,000 again, but before that we may see some sideways movement. Some market participants have no doubt already bought the dip, others may be waiting to learn more about the most recent crash and avoid another one before buying their way back to those levels. Whether the BTC tide is rising organically or falling more sharply due to news of crypto-related penalties, we can expect others to follow suit.
About Justin Chuh, Senior Trader at Wave Financial
Prior to joining Wave Financial, Justin Chuh worked at the proprietary trading technology company HC Tech, where he spent 7 years as a forex trader. Justin is a CFA charterholder, a member of the CFA Society Los Angeles and holds a BS in Business Economics and Management in Arizona. Justin is responsible for trading Bitcoin and other digital assets that make up Wave's managed assets, and making sure that their trading strategies cover cash inflows and withdrawals.
About Wave Financial LLC
Wave Financial LLC (Wave) is a Los Angeles and London based investment management company providing digital asset solutions for institutional and private wealth. Led by a team of experienced financial services providers, Wave offers investable funds through its diverse investment strategies for digital assets and tokenized real assets. Wave also offers managed accounts for HNWIs and family offices seeking tailored exposure to digital assets, bespoke treasury management services, as well as early stage venture capital and strategic advice for the digital asset ecosystem.
Wave is regulated as a California Registered Investment Advisor (CRD #: 305726).