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DeFiGaming & MetaverseInfrastructureMarketsNFTs
Research Weekly July 29, 2024
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Key Takeaways
3 min read

“Keep calm and keep riding”

  • In this issue of the newsletter, we stick to the views described since two weeks ago. Our Risk model remains “Risk-on”, a series of short-term narratives (Fed rate cuts, US republican presidency, ETF launch) are still in place to drive Crypto prices higher, led by the Major tokens
  • Downside risks can be protected via the options market, especially as these short-term crypto tailwinds run their course later this year
  • SOL is still the darling of our models and of our Alpha Discord

Risk Signals and Narratives

Let’s review each of the positive narratives, before moving on to flows and token ranking.

1) Disinflation and the US Fed’s cutting cycle lead to lower rates which is supportive of Crypto and non-profitable equities

200bps+ of Fed rate cuts are now in the price of future and OIS markets by the end of 2026. This is a lot assuming no recession occurs in that time period. In our view, this particular macro tailwind has run its course. We did see a correction of close to 10% in Semi and Big Tech equities, matched by an equal rally of US Small Cap, thanks to the fall in rates.

This does not mean that rates will increase from here but rather that the likelihood of rates decreasing (assuming no...