📢 September Signals

🗒️ Market update

Nearly 200 days on from the last all time high are we about to head back there and retest it?  We think so, the FOMC’s mini surprise of a 50bps rate cut has signalled a new global monetary easing cycle has officially begun.  The market is anticipating a further 75bps and trending to an expected 100bps of cuts by year end. The weak seasonality of Q3 looks set to be flipped with a very bullish set up for a seasonally strong Q4.  Standard Chartered updated their outlook for the election targeting a new all time high for Bitcoin either way, US$75,000 under a Harris win and US$125,000 under Trump.  

BlackRock published a new Bitcoin report which is well worth a read, they do an excellent job at distilling complex messages.  An example below, how does Bitcoin perform as a geopolitical risk hedge under 10 day and 60 day time frames to illustrate its importance as a diversifying and non sovereign asset. 

Seasonality matters, while it is a bit of a mystery why Q3 and September (‘Rektember’) is statistically the worst quarter and month for returns for both digital asset and equities, there are some structural reasons with corporate taxes due in the US, and often lower liquidity as northern hemisphere capital markets participants take summer holidays. October (‘Uptober’) and Q4 are statistically great times to be in the market. With a new higher high today following a higher low the technical set up is already looking bullish. 

Solana’s annual Breakpoint conference wrapped up last week and there is a lot to unpack! Frankendancer (a hybrd of the new Firedancer and existing Agave validators) is live and hitting 1,000,000 tps (transaction per second) and the Firedancer client is now live on main net. Corporates; Citibank, Society General, Visa, Paypal, Franklin Templeton, Shopify payments, Vaneck are all choosing Solana. Details on the new Solana ‘Seeker’ phone and a surprise new budget $99 ‘Jambo’ phone, handheld gaming device all released, super interesting hardware options bring 100,000s in to Web3 on Solana & support Solana disrupting IoS and Android (and their 3,000bps margins!).  Jupiter DEX to tie in to Apple pay and google pay.  No other chain is close to these speeds or this level of high quality development, partnership or hardware. Net flows over the last 3 months tell the story.

 Key dates to watch

• 27 September – Core PCE
• 1/4 October – Jobs data, JOLTs & Non Farm Payrolls
• 10/11 October – Inflation data CPI & PPI
• 5 November – The big one, US Election 

⚒️ Headlines

• China’s central bank unveils most aggressive stimulus since pandemic
• Stacks (STX) makes 30% gain as mainnet upgrade and stablecoin launch approach
• BNY Mellon Gets Green Light to Offer Bitcoin Custody Services
• Bullish on Solana: Top 5 Takeaways From Solana Breakpoint

💡Merkle Tree Capital at the AFR’s Crypto and Digital Asset Summit

MTC was invited to speak at the AFR Crypto Summit earlier this week. It was a real honour to represent the industry with my peers. The key messages from the summit were ASIC and the Aus government are dragging their feet on the industry guidance and rules, the Harris administration could be more supportive of crypto than the we previously believed and broad consensus and that Q4 is shaping as a very supportive environment for prices.

Read more here.

The Merkle Tree Capital “Why?”

We know accessing the digital asset sector is challenging, presenting a new set of risks that most investors are not familiar with, and there is a lot of sub-standard information flying around. That is why we created an actively managed unit trust aiming to hold the best digital assets that will form the basis of the ecosystem over the next 5-10 years.

Investors can now access this new asset class without concerns around self-custody or dealing with unknown counterparties, simplify their tax reporting, avoid single asset risk, maximise yield, and access institutional risk management and portfolio construction.   

🧠 SMART – actively managed, enhance risk adjusted returns, sophisticated portfolio construction, staking yield, simple exposure – no passwords or digital wallets

🔒 SECURE – institutional custody, staking in cold storage, insurance, counterparty due diligence 

🪙 CRYPTO – Blockchain eliminates intermediaries, lowers costs and improves efficiency by bringing transparency and security.