Christopher Kock, CEO of Virtune, sees a high probability that the crypto market has bottomed out in this cycle. He points to bitcoin rising 25 per cent in August, triggered by the US doubling its buybacks of long-term government bonds.
Christopher Kock is CEO of Virtune, a leading ETP/ETF provider in the Nordics. The crypto market has been in decline since October last year, but it turned in August, when bitcoin rose 25 per cent over the month. In this Kaupr TV interview, Kock explains what he believes triggered the shift, why he thinks the bottom is now behind us, and which September dates he is watching.
Kock dates the decline to 10 October last year, and says the shift came about two weeks ago. August ended with a 25 per cent gain for bitcoin, which he describes as a good month for crypto.
The trigger was macroeconomic, according to Kock. Scott Bessent at the US Treasury announced that it will double its buybacks of long-term US government bonds. That created an expectation of lower rates on long-term bonds, which in turn increases demand for risk assets such as crypto.
Kock expects a great deal of volatility ahead. At the same time, he sees a high probability that the market has bottomed out in this cycle.
One of his arguments is that price development has lagged well behind the fundamentals through the year. He points to US exchanges about to launch tokenised trading, Morgan Stanley launching its own crypto ETFs, and Citadel Securities making a large equity investment in a crypto company.
None of this has fed through to the price of bitcoin and other crypto assets, Kock says.
Macroeconomics now plays an important role, according to Kock. He points to the inflation data on 11 September and the Fed decision on 16 September, where in his assessment the market is pricing in a rate rise of 25 basis points. If the employment figures come in weaker than expected, and the inflation data somewhat better, he believes the macroeconomic factors point in the right direction for the crypto market.
The third date is 15 September, when the Senate votes on the Clarity Act. If it passes, Kock expects it to have an impact on the market as a whole.
Even if it does not pass, both the SEC and the CFTC have said they will continue to produce guidance and rules supporting growth in the US crypto market.
Kock also points to strong inflows into US crypto ETFs. Last week saw $3.2 billion in net inflows, which he believes was the best week in almost a year.
That sends clear positive signals to the market, in his view.
Sources: Kaupr
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