At 8 pm on August 22, in a live broadcast on Matrixport’s official YouTube channel, Daniel Yu, Head of Asset Management at Matrixport, discussed in depth the opportunities and challenges of the current cryptocurrency market, and provided investors with comprehensive market analysis and strategic recommendations to help users make more rational investment decisions in the current complex market environment.
The highlights of the live broadcast are as follows
Daniel analyzed the signals of the market rebound this week (August 18-August 24), pointing out that the recent US employment report may have overestimated the extent of economic weakness, thereby raising market expectations for a shift in the Fed's policy. This expectation may drive a rebound in risky assets such as Bitcoin in the short term, but investors should be cautious to avoid falling into a bear market trap. In addition, the Mt. Gox massive Bitcoin transfer event may have once again triggered market concerns about selling pressure. Investors are advised to pay close attention to large transactions to assess their potential impact on market liquidity.
Market Overview
Recently, the price of Bitcoin has fallen rapidly from nearly $62,000 to $57,000, showing a box-shaped oscillation trend. The market atmosphere is sluggish, and investment research reports show a decline in investment returns, especially the poor performance of quantitative strategies and arbitrage strategies. The sale of Bitcoin and tokens by large institutions such as Mt.Gox and the US government has affected the market, leading to increased price volatility. The market seems to be affected by the quantitative selling strategy of institutions, and prices often fall after reaching new highs.
Perpetual contract funding rate hits bottom
The funding rate of perpetual contracts has reached the lowest level in recent years, and even turned negative. Short-term yields are low, but long-term yields remain at a high level, reflecting the market's uncertainty about the short term.
The bears have significant power, with selling occurring every time the price rises, and market sentiment has yet to recover.
Ethereum Performance and Short-Term Bearish Pressure
Ethereum has performed poorly recently, with low on-chain activity and prices. Institutions tend to short in the futures market rather than sell spot.
Cryptocurrency market expectations and Bitcoin supply and demand
Bitcoin is regarded as digital gold, and its valuation is greatly affected by supply and demand and macroeconomic factors. In contrast, the valuation of Ethereum and other assets depends more on on-chain activity and business activities.
The current market may have upward momentum after experiencing bottom support, but attention should be paid to the impact of institutional reduction and interest rate cut expectations. The Bitcoin market has not broken through the previous high, and the U.S. stock and gold markets have performed strongly.
Bitcoin's long-term returns benefit from limited supply and changes in monetary policy, while assets such as Ethereum face different valuation challenges. For investors who want to obtain stable returns, quantitative strategies and structured products provide good options. When choosing, you should pay attention to the maximum loss and return range of the product.
The impact of the Fed’s rate cut on the crypto market
Since the halving, the price of Bitcoin has not been as good as market expectations, and investors are pinning their hopes on a rate cut. Currently, the probability of a rate cut on September 24 has increased significantly, but the base for the cut is still controversial.
After the market obtains a bottom support through rate cuts, there may be an upward momentum and some good expectations, but it will not surge sharply or even directly start a bull market, as the related impacts have already been priced in.
In addition to Bitcoin, some tokens or projects did not really attract global users in this rate cut. On the contrary, a large amount of institutional funds or quantitative strategies will gain an absolute return. Because institutional investment has some advantages over retail investors in terms of personnel, trading team, trading system and information advantages, financial management is a good choice at present.
Current Market Asset Allocation
Taking advantage of high volatility markets
Investment strategies for high-volatility assets: Analyze the nature of the high volatility characteristics of the crypto market (similar to tidal power generation) and explore how to achieve returns through strategic investment in the high-volatility crypto market
Choose a professional institution: Currently, a large number of quantitative transactions in the market may be hosted by machines. Frequent transactions will greatly increase the probability of making mistakes. Therefore, through the quantitative tools or products of professional institutions, risks can be reasonably avoided and some volatility investments can be made.
Structured products: Investors are advised to use structured products and quantitative strategies during market downturns. The characteristics of Matrixport’s Shark Fin, Snowball, Dual Currency and other products determine that they can take advantage of the high volatility of the market.
Crypto market segmentation and investment allocation
Crypto market segmentation: The Crypto market is divided into mid-bull stage, peaking stage, mid-bear stage, bottoming out stage and early bull stage. Currently, most investors in the market expect it to be in the early and mid-bull stage, and it has not yet reached the top.
Market expectations and investment advice: In view of the current market conditions, it is recommended to choose some products for personalization based on your own risk management needs, such as structured products (such as Shark Fin, Snowball, Dual Currency and Trend Intelligence), to help investors obtain stable returns in market fluctuations.
Core-satellite strategy: Currently, the core-satellite strategy can be adopted, investing most of the funds in stable principal-guaranteed products, while allocating a small portion of funds to high-yield structured products. By matching different financial products, strategic investments can be used to achieve returns in high-volatility markets. For example, 70%-80% of assets can be selected for principal-guaranteed products, and the remaining 20%-30% can be selected for relatively high-risk and high-yield financial products to achieve risk management.
Collar Option Strategy and Risk Management
Option strategy and risk management: Compared with direct mortgage lending, the financing rate of USDT financing for collar options is as low as around 4%, which can help miner investors who are worried about margin calls and tail risks to reduce capital costs and avoid risks in a high volatility environment.
For more exciting content, please check out the YouTube content replay: https://www.youtube.com/watch?v=Qwzworphd_w
【About Matrixport Weekly Market Insights】
【Matrixport Weekly Market Insights】is a new interactive knowledge sharing column launched by Matrixport, which is broadcast live on the official YouTube channel of Matrixport every week. This column will regularly invite industry product leaders, top analysts and KOLs to discuss investment logic under different market conditions, share investment experiences, and help users realize asset appreciation.
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Disclaimer: The above content does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy to residents of the Hong Kong Special Administrative Region, the United States, Singapore, and other countries or regions where such offers or solicitations may be prohibited by law. Digital asset trading may be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
