Digital Asset Space
March began with BTC at $3815 and closed at $4130. Bahrain became the first Arab nation to comprehensively regulate crypto and it's attracting business from India where crypto is disallowed. New York's BitLicense may be replicated in Nevada, California, Oklahoma, Rhode Island, and Hawaii. Overall we anticipate that this will be long term beneficial to digital assets. Although, how much will be better estimated once guidelines are proposed. It is likely that these rules will carry some form of tax which could limit the upside for prices and crypto companies. IBM has made further steps with their stable coin built on the Stellar network, they have received six letters of intent from banks to settle transactions using their technology. Jack Dorsey announced that he is hiring Bitcoin developers to report directly to him, we find this bullish for digital assets.
Last month we told you that we can now assist in digital asset lending if you are long. This month BlockFi announced that they are paying 6.2% to borrow. In another narrative, they announced they are lending out at interest rates roughly between 8-10%. This sets up for the replication of traditional big bank rehypothecation models and attractive margin ventures. We expect similar business lines to keep popping up and then grow rapidly. This will need to be monitored for exaggeration and repayment risk.
The US Bond yield curve inverted. While it can be one of the most reliable recession indicators it has not been perfect. It inverted in '05, '06 & '07 before the equity markets collapsed. The curve also just inverted late last year. Don't expect a near term prolonged sea of red as the Fed could maintain rates and even consider a small cut. Likely boosting equities. Remember digital assets are not negatively correlated to equities. Risk on in equities more likely could lead to risk on in crypto.
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Digital Asset Investment Management is a licensed Registered Investment Adviser specializing in Bitcoin for 401k's, IRA's and Traditional Brokerage accounts. Learn more at www.daim.io