Let's get to the big story breakdown.
Well, Bitcoin is higher, holding above 102,000 this morning as traders wait for clarity on the US government reopening and also for broader economic signals.
Earlier this week, Bitcoin ETF saw their biggest inf influence since October, showing investors are still buying debts.
Meanwhile, crypto markets do remain cautious, as well as choppy pressure by interest rates, as well as a stronger US currency, but there is The potential for a year and rebound if the Fed's December meeting strikes a positive tone while joining me to weigh in is Coin Desk Indexes's Andy Beer.
Good morning.
Great to have you here.
Thank you so much for joining me.
Good morning.
Well, it feels like the crypto markets are kind of hitting the snooze button, which is what I felt like doing this morning, the dark and even after the equity markets took off after Sunday night's hint that the government might reopen.
Bitcoin is still a little bit above 100,000, which is really not a convincing level.
That's right on its support.
Ether, which remember back in late August almost hit 5000, right, 49, 50 or so, is down at 3400.
So we're far away from what we would consider really strong crypto markets.
The momentum is just not there right now.
A lot of people are asking why, but the answer is, you know, the markets are just hitting this news button.
Yeah, and speaking of which, what type of alarm clock catalyst are you watching for?
That's the big question.
And right now if there's an alarm clock, it's kind of a surprise.
There aren't maybe we can get a surprise that wakes the market up and gets sentiment going again.
It's a very sentiment-driven market and a lot of what's driving equities feels very sentiment driven right now too.
The markets just don't know how to feel, but people are keeping their cash on the sidelines.
And kind of waiting and seeing right now, we'd love to see something clearly the actually legislation that reopens the government is not going to do the trick.
And of course when it comes to the rest of this year, we're paying attention to the December Fed meeting that's coming up.
But when it comes to crypto market liquidity, tell me why Sofer as well as Fed repo rates are so important.
Yeah, so this is a this is kind of a nerdy subject on the on the periphery of people.
Just like to watch Bitcoin and ether prices, but when you think about all the stablecoin activity, one thought is, well, you know, I can borrow and I can lend dollars.
What about borrowing and lending stablecoins?
So one thing that we like to look at is the SOFA rate.
Remember, in late October, the Fed came in and did unscheduled repo activity to help bring liquidity back into the system that drove the SOPA rate, the overnight lending rate between banks down.
Interestingly, at the same time, the major market that we tracked with the coin desk overnight rates or USDC for Circle stablecoin went up on the same day.
Now that's interesting because those rates for dollars are based on liquidity and Fed policy, but in the DI stablecoin rate markets, it's more based on supply and demand, and if supply comes away from lending, it usually means those dollars have somewhere better to go.
If people are lurching or lunging to borrow more, it also means that they want to build leverage so that they can pursue opportunities.
So a rise in those stable point interest rates usually we feel is kind of a positive sign coupled with lower SOPA.
It's meaning more liquidity should also be a positive sign.
So that obviously didn't materialize into the days ahead, but as we look forward and we think about more liquidity coming to the system, we think that that's probably a good, at least a coincident indicator of strength for the market.
And finally, Andy, before I let you go as we head into year end, we'll continue to keep a close eye on price targets for the major crypto names.
But of course, as you mentioned, we saw ETA approach that all, all-time record high level, but it didn't quite get there.
So as we head into the new year, what are you watching?
Well, a lot of the very smart and very clever sort of You know, Bitcoin and crypto, you know, predictors had softened their targets for the end of the year, which is kind of realistic in that we have 7 or 8 weeks left.
It would be great to see a lunge for an all-time high in Bitcoin, which is about 126,000 plus.
We definitely need a catalyst to get there.
I don't think anybody in the market knows what that's going to be.
I would kind of bet that that happens first before either.
Beats its all-time high around 44955 that it hit back in August, but correlations are up.
Let's hope they remain up in the next rally.
OK, Andy, always great to talk to you.
Thank you so much for joining me this morning and we'll see you next week.
Thank you.
