Key Trends in 2024’s Crypto Market Rally

On April 3rd 2024, Talos, Hex Trust, Kaiko, and Infinity Exchange hosted a panel on "Exploring Key Trends in this Crypto Market Rally" at Hex Trust's Hong Kong office. The speakers, Neelabh Dixit (Commercial Product Manager, Talos), Ed Zhao (Head of Markets, Hex Trust), Sean Lawrence (Head of APAC, Kaiko), and Chris Brewer (COO, Infinity Exchange) shared their views on the following areas:

There’s a lack of short-term cues in the market today

As we approach the completion of the Bitcoin Halving, the market has begun pricing in a low probability of an ETH ETF approval in May. However, barring any major macro or geopolitical events, the market currently lacks clear short-term cues. They discussed how the high funding rate for leveraged long positions could become costly if the market remains stagnant for too long, with summers traditionally slower in market activity until late July or August.

It’s still too early to assess institutional ETF participation

For interested firms, changes to the investment prospectus are a time-consuming process. They involve proposal creation, compliance checks, and board approvals before implementation. Despite most ETF flows currently coming from individual traders and a few hedge funds, analyzing these flows in Q4 or year-end could provide insights into institutional interest from Traditional Finance (TradFi) firms. Meanwhile, there are concerns surrounding the potential delay or approval of an ETH ETF. While regulatory issues regarding price manipulation persist, the classification of ETH's staking rewards as securities adds another layer of complexity. The panel felt that the approval of an ETH ETF could trigger a broader tokenization trend, presenting both immediate challenges and long-term expansion opportunities.

The current market environment favors the inflation hedge thesis

With rising concerns over escalating US debt levels, gold recently reached all-time highs, solidifying its position as a reliable hedge against inflation. Bitcoin, on the other hand, is still gaining wider adoption and offers unique benefits within a portfolio context due to its convexity.

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