CRYPTO MOVERS AND PRICES

Crypto is quiet this morning, though BTC continues to move to new 52-week highs. Spot volumes are about where they were at the end of last week.

Crypto Story of the Day

Exchange stress, which has been one of the most decisive factors in price weakness, has not gotten in the way of an over USD +2,000 BTC rally. We believe that bullish fundamentals that have emerged over the last few months/weeks are effectively drowning out the negativity.

Historically, we have pointed to exchange stress as arguably the most significant contributor to crypto price weakness over the last 2/3-years. For example, in late 2018, we associated a 50% decline in BTC price very closely with Bitfinex fiat withdrawals frozen due to banking issues. That said, the last month has arguably seen more extreme exchange stress than even then.

BitMEX and other crypto-derivative platforms look certain to be prosecuted by regulators for operating unlicensed platforms and other charges. Also, OKEX, thought to be one of the World's most active exchanges, has now not allowed crypto withdrawals for over a week after claiming to have an issue reaching a private key holder. Despite that, BTC is up over +30% since mid-September.

It has been a bit of a shock to models that crypto prices have stood up so strongly to this traditionally bearish indicator. We think there are two possible options: First, the growing liquidity profile in crypto has decreased the sector's dependency on any particular exchange or network. Second, that the bullish fundamentals building amid unprecedented Central Bank stimulus and a growing group of large corporates and investors making initial forays into the space has outweighed any market-structure dynamic. In a new and fast-changing sector like crypto, previously reliable factors tend to revert abruptly.

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