Greythorn Monthly Market Update | March 2024

10 min readApr 2, 2024

OPENING REMARKS

Welcome to Greythorn Asset Management’s March 2024 Monthly Market Update. We’re delighted to share insights and analyses that shed light on our operations and the market trends we’re observing. Our mission is to invest in groundbreaking technologies and asset classes, aiming to generate significant value and contribute positively to the world.

At Greythorn, we are dedicated to offering monthly updates on the cryptocurrency market. These updates include thorough analyses of market dynamics, regulatory developments, and the macroeconomic elements that impact digital currencies.

For additional details about our work and to learn more about us, we invite you to visit our website.

MARKET ANALYSIS

March Market Dynamics: Surpassing Expectations

As March unfolded, the cryptocurrency market entered a period of adjustment, with Bitcoin (BTC) solidly surpassing the $60,000 threshold. This new level of acceptance marked a shift at the beginning of the month towards considering new all-time highs within imminent reach, a sentiment reinforced by continuous leverage increases, predominantly from US-based institutions.

This sentiment was also influenced by BTC’s valuation, denominated in euros, hitting new all-time highs, fueling speculation about imminent all-time highs in USD as well. This speculation was promptly validated on the 5th when BTC not only reached but briefly exceeded a new all-time high of $69,210. Despite an intense volatility spike, resulting in an over 14% intraday drop, the market’s enthusiasm remained undeterred, evidenced by accelerated ETF inflows and a record peak in BTC futures open interest.

What’s more, BTC futures open interest reached a new all-time high in USD terms despite the highest amount of liquidations after reaching all time highs.

The month also witnessed sharp reactions from the crypto market to US economic indicators, particularly the diminishing expectations of rate cuts anytime soon and PPI data, which indicated a higher-than-expected inflation rate. These fluctuations underscore Bitcoin’s sensitivity to macroeconomic factors, yet its quick recovery reinforces its role as a geopolitical and economic hedge.

Innovations and Shifts in Crypto Investment Products

A notable development in March was the introduction of two new crypto exchange-traded products (ETPs) on the SIX Swiss Exchange, focusing on Ethereum (ETH) and Solana (SOL). These products, emerging from a collaboration between Figment, Apex Group, and Issuance.Swiss AG, integrate staking yields and Maximal Extractable Value (MEV) income, proposing a novel investment avenue with enhanced return potential. This signifies a potential pivot in market innovation from the US to Europe, suggesting a broader, global evolution of crypto investment strategies.

Also, The London Stock Exchange’s move to accept proposals for crypto-backed Exchange Traded Notes (cETNs) reflects a significant step towards integrating crypto assets within traditional financial frameworks. However, regulatory apprehensions remain, as highlighted by the FCA’s warnings and the ongoing uncertainty surrounding the approval of an ETH spot ETF in the US.

Ethereum’s Dencun Upgrade: A Leap Towards Scalability

Ethereum’s network upgrade, Dencun, introduced on March 13th, marked a critical step towards improving scalability and reducing transaction fees on layer-2 networks. This development is poised to enhance the Ethereum ecosystem’s overall efficiency, potentially boosting demand for ETH and fostering new applications and network interactions.

Meme Coins: A Sign of Market Exuberance?

In March we also saw the rise of meme coins, tokens that thrive on community and sentiment rather than traditional fundamentals. Their growing popularity, alongside ambitious projects like the dogwifhat campaign for a Las Vegas Sphere ad, signals an increasing market enthusiasm and a tilt towards ‘froth.’ Yet, this movement underscores the value placed on community and shared experience in the cryptocurrency sphere.

Ultimate Straight: Closing the Month

At the end of March, a judge in New York ruled against Coinbase in a case with the SEC, causing a brief upset in the crypto market. Despite this, the market quickly recovered. Coinbase’s stock only fell slightly, still showing a strong gain for the year. Bitcoin prices ended the month between $68,000 and $71,000.

Conclusion

With new all-time highs, new investment options, and changes in regulations, the situation keeps changing. Even with these advancements, there’s a careful optimism. People are aware of the risks but also see significant moves towards making cryptocurrency a more accepted and integral part of the worldwide financial system.

MACRO INSIGHTS

As March began, the global economy was filled with subtle changes and big surprises, showing us it’s at a crucial turning point. The decisions of central banks, political challenges around the world, and how the markets reacted together showed a complex situation with the economy heading in different directions.

Rate Decisions and Economic Forecasts

Early in the month, conversations focused on the US Federal Reserve’s position on interest rates, driven by Apollo’s Torsten Slok’s view that the strength of the US economy might prevent expected reductions in rates. This idea became more popular, fueled by financial conditions and labour market data. Even though some predictions pointed to slower growth, discussions about the direction of interest rates highlighted the delicate balance the economy must maintain between expectations for growth and the pressures of inflation.

As the month progressed, global rate decisions underscored the disparate economic realities across regions. Japan’s rate adjustments contrasted with the European Central Bank’s (ECB) cautious outlook, reflecting a nuanced interplay of economic indicators and policy responses aimed at navigating inflationary trends and growth prospects.

Emerging Markets and Cryptocurrency: Nigeria’s Regulatory Challenges

Nigeria’s issues with Binance showed how hard it can be to regulate digital currencies during economic difficulties. The government’s changing approach to fines and the arrest of Binance leaders emphasised the ongoing struggles between cryptocurrency companies and government regulations. This situation reflects the challenges of fitting digital finance into established economic systems.

China’s Policy Directions and Global Implications

China’s National People’s Congress shed light on the country’s economic plans, focusing on investing in technology and opening up foreign trade. These efforts, combined with talks on supporting the property sector and setting goals for GDP growth, showed China’s aim to strengthen its economy with specific support measures and a focus on innovation. This could significantly influence the global economy.

US Employment Data and Inflation: Mixed Signals

US job data showed a puzzling situation with lots of new jobs but also increasing unemployment rates, highlighting how complex the job market is. At the same time, CPI data showed ongoing inflation, making it difficult for the Federal Reserve to steer the economy through uncertain times.

International Rate Landscape: Anticipating Shifts

The diverging rate decisions among major economies — from Japan’s increase to Switzerland’s cut — illustrated the global economic landscape’s fragmented nature. These actions, coupled with the Fed’s nuanced messaging, suggest a time of adjustment as leaders deal with inflation, growth,and the implications of their decisions on global markets.

EU’s Regulatory Framework: Clarifying Crypto Policies

The European Union’s steps to strengthen cryptocurrency rules led to discussions, although there was some confusion about how strict these rules were. Their careful approach, trying to prevent money laundering while supporting tech innovation, highlighted the difficulties of fitting digital finance into existing laws.

A March of Macroeconomic Reflections

March showed how complex the global economy is, with central banks’ decisions, regulatory challenges, and economic data showing a mix of conflicts and changes. As governments and markets deal with these issues, the balance between growth forecasts, inflation, and regulations is key to understanding what might happen next. This highlights the importance of being flexible and carefully analysing the situation as the world economy keeps changing.

MONTHLY HIGHLIGHTS

Blast Ethereum Layer 2 Mainnet Launch: $2.3 Billion Locked, 180K Users.
MicroStrategy Bitcoin Portfolio Peaks: $12.24 Billion as BTC Hits $60,000+.
Bitcoin Eyes Historic Monthly Gain: Largest Candle Ever, Surpasses $63,000.
Coinbase Overcomes $0 Balance Glitch: Fixes Amid Bitcoin’s Surge to $64,000.
Memecoin Market Cap Surges: Investor Interest and Venture Capital Attention.
Hong Kong Sees Surge in Crypto Exchange Applications: 22 Licences, Including Major Players.
Decentralised Lending TVL Rebounds: Surpasses $30 Billion Amid Market recovery.
Bitcoin’s Fourth Halving Approaches: Miners’ Rewards to Halve in April.
Nigeria Claims $10 Billion from Binance: Alleges Unauthorised Transactions.
Worldcoin Value Drops After Musk’s Legal Move: Reflects Sensitivity to OpenAI-Related News.
Record Bitcoin Futures Open Interest: Hits $26 Billion Amid Price Rally.
Spot Bitcoin ETFs Achieve $100 Billion Volume: Marks Accelerated Bitcoin Adoption.
Ether Price Hits $4,000: Fueled by ETF Speculation and Regulatory Hopes.
4% of Mined Bitcoin Held by U.S. ETFs: Institutional Control Reflects in Liquidity.
Grayscale and Coinbase Advocate for Ether ETFs: Push for Regulatory Approval
Bitcoin Sets New All-Time High Over $69,000: Breaks 846-Day Record, Reflects ETF Impact.
Solana’s io.net Hits $1 Billion Valuation: After Series A, Spotlight on Blockchain Innovations.
MicroStrategy’s Stock Breaks Past $1,860: Reaches All-Time High, Controls 1% of BTC Supply.
KuCoin Charged by DOJ: Alleged AML Law Violations, $9 Billion Laundering Accusations.
Ripple Faces $1.95 Billion SEC Fine: Proposed Judgement for Unregistered XRP Sales.
OFAC Sanctions Entities: Aiding Russian Sanctions Evasion via Crypto.
Coinbase International Records Surge: Daily Trading Volume Hits New High in March.

ON-CHAIN ANALYSIS

This month, the value of stablecoins hit over $150 billion, making them comparable to the 16th largest holder of US Treasuries and the 14th biggest money market mutual fund. Even though they haven’t grown as fast as Bitcoin, stablecoins have seen a steady rise in value since late 2023.

Since its launch in August 2023, Coinbase’s Layer 2 platform, Base, attracted 5.03 million new users, with notable growth occurring in March 2024.

The Ethereum Dencun upgrade has notably benefited Chainlink, cutting gas fees for its oracle reports on L2 roll ups like Arbitrum, Base L2, and Optimism by up to 99%, significantly reducing operational costs.

The Dencun upgrade on the Ethereum network, intended to lower transaction fees for Layer 2 solutions and improve scalability, was executed smoothly but initially failed to increase ETH and Layer 2 token prices.

Search interest in “bitcoin” or “BTC” is rising, though not sharply spiking.

The Bitcoin Liquid Inventory Ratio is at its lowest ever, indicating there’s less Bitcoin available to sell compared to demand. This ratio is calculated by dividing the total Bitcoin for sale by the recent increase in Bitcoin held by accumulating wallets over 30 days.

Bitcoin whale holdings are increasing faster than ever, at a rate of 11.8% per month. The previous record was 11.1% in January 2021, when the price was $36,000

CLOSING REMARKS

Thank you for reading Greyhtorn’s monthly summary. If you found it interesting, we invite you to engage with this post for wider reach. Our aim is to make insights into our industry more accessible to everyone.

For more market updates and project analyses, we invite you to follow our page. To learn more about us, feel free to visit our website.

Wishing you a great April!

For further updates on the market and in-depth analyses of projects, consider following our page. To discover more about what we do, visit our website.

Have a fantastic April!

DISCLAIMER

This presentation has been prepared by Greythorn Asset Management Pty Ltd (ABN 96 621 995 659) (Greythorn). The information in this presentation should be regarded as general information only rather than investment advice and financial advice. It is not an advertisement nor is it a solicitation or an offer to buy or sell any financial instruments or to participate in any particular trading strategy. In preparing this document Greythorn did not take into account the investment objectives, financial circumstance or particular needs of any recipient who receives or reads it. Before making any investment decisions, recipients of this presentation should consider their own personal circumstances and seek professional advice from their accountant, lawyer or other professional adviser. This presentation contains statements, opinions, projections, forecasts and other material (forward looking statements), based on various assumptions. Greythorn is not obliged to update the information. Those assumptions may or may not prove to be correct. None of Greythorn, its officers, employees, agents, advisers or any other person named in this presentation makes any representation as to the accuracy or likelihood of fulfilment of any forward looking statements or any of the assumptions upon which they are based. Greythorn and its officers, employees, agents and advisers give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in this presentation. None of Greythorn and its officers, employees, agents and advisers accept, to the extent permitted by law, responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained in this presentation. This presentation is the property of Greythorn. By receiving this presentation, the recipient agrees to keep its content confidential and agrees not to copy, supply, disseminate or disclose any information in relation to its content without written consent.