Yesterday’s session was dominated by optimism regarding a bipartisan bill in the US, aimed at massive infrastructure spending. The S&P broke all-time high, the Nasdaq also jumped to new record highs, the Dow… well no new record highs there but strong green candle. Away from equities, things feel flat, literally. The dollar, bonds, gold are all in range with not much report.

Within this risk-on environment BTC seems to at least be on the move as well, and a move up at that. But the fundamentals driving it are certainly different.

Paraguay just announced a bill to make Bitcoin legal tender. Note that it hasn’t passed yet but it means that, in less than a month, a second country is looking to adopt BTC. Personally, I find that massive, regardless of whether it comes to fruition or not. The thesis a lot of crypto enthusiasts have is actually unfolding before our eyes.

There’s also a different feel in crypto markets yesterday and today. While the Chinese crackdowns really haven’t waned, there are some reversals and moves that suggest the selling might pause, at least for now. 

We discussed it yesterday, but the stablecoin supply on exchanges is hitting all-time highs, which is in part a result of just all the selling that took place but also means there’s a lot of dry-powder for another move up. We can also see Glassnode data showing the liquid supply of BTC turning negative after more than a month of positive readings, this means people are starting to hold onto their bitcoins more than during the sell-off.

Two news that I also found extremely bullish was Andreessen Horowitz ‘tripling down’ on blockchain startups with a massive $2.2 billion crypto fund (the third of its kind in the company). I also just came across an article reporting Citigroup is launching a digital asset unit within its wealth management division. 

Again, the crypto thesis is seeping into many areas of our financial system, from countries, to start-ups, to large banks, to payment providers and to regular users.

Away from these, many investors are looking at derivatives and the options expiry coming up later today, which could free up a lot of locked in investors to take new bets, higher or lower. 

The focus is on BTC but it’ll be interesting to see if alts will wake up in a stronger fashion if BTC moves out of its range.

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