Another one bites the dust

It has been a difficult and unprecedented market. First and foremost, let us reiterate that XBTO and Stablehouse have 0 exposure to FTX, Alameda nor Genesis.

We saw another week of turmoil as one by one, market participants announce exposure to the fallen. Interestingly, crypto markets have held together despite the broad panic. However, the big question remains: how long? Contagion is reverberating across some of the largest names in the industry.

Outside crypto, the broader markets are far calmer, especially as US markets close in on the holiday week with the Thanksgiving lull nearing. Data released over the week have confirmed what many have been waiting for, signs that the US economy is slowing and inflation peaking.

Unfortunately, the idiosyncratic news in crypto has held the crypto markets from participating in the relief rally we’ve seen in the broader markets.

The macro environment isn’t out of the woods yet though, as we’ve been focused on the fears of an aggressive Fed for a good part of the year.

The market now has to come to terms with the fact that the US economy is indeed slowing, and understanding the broader implications will be key in determining whether risk assets can continue their path higher or if another breather and pull back is needed.

It’s going to be a very cold winter. With the lack of any positive catalyst, with contagion picking up steam, liquidity/credit drying up, our outlook for the crypto markets remain negative for the short-medium term.

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