Thread by @Delphi_Digital

0/ The Perfect Storm for Bitcoin is Brewing.
Our team just released our Quarterly Macro Outlook, which digs deep into the key drivers behind Bitcoin’s long-term value proposition as a non-sovereign, digitally native store of value. Quick summary thread: delphidigital.io/research

1/ We begin with a brief update on the current state of the crypto market, highlighting the acceleration in upward price movement and the widening gap between $BTC and alternative crypto assets at large.

2/ We touch on some of the notable outperformers so far this year and provide key stats and context behind some of the most relevant names.

3/ An overwhelming majority of the selling from the Q2 price rally came from short-term BTC holders. Our UTXO analysis indicated that the 6-12M & 3-6M age bands saw 2.5% & 2.3% of the supply sold out of them. The portion of overall supply untouched for those bands has come down.

4/ The relationship between $BTC and risk assets has reversed from late 2018 as bitcoin’s narrative shifts more towards “digital gold”, driven in part by rising geopolitical tensions (trade wars) & the growing risk of currency devaluation, even among today’s advanced economies.

5/ Speaking of which, global central banks are in a race to cut interest rates amid a backdrop of slowing economic activity and tepid inflation. The Federal Reserve cut rates 25 bps just this week for the first time in over a decade as inflationary pressures remain suppressed.

6/ This is where our in-house macro strategist @Kevin_Kelly_II takes the wheel and hammers on a number of key factors investors should be watching. For starters, the risk of a recession in the U.S. is rising – fast.

7/ Touching on the justification for rate cuts and how the Fed is likely to be handcuffed to the direction of policy set by global peers (ECB, BOJ, PBOC, etc.).

8/ And how the shift in sentiment for global central banks is fueling a rally in risk assets (i.e. stocks, HY, etc.). It’s important to note $BTC is one of the best performing assets globally YTD, but we excluded it from this chart b/c its returns dwarf every other asset class.

9/ We believe $BTC will benefit from secular + cyclical trends in the coming years. Altho we’ve noted our LT view on its value prop as digital gold, the asymmetric return potential of BTC given its relatively small mkt value may be an attractive opp. for growth-oriented investors

10/ To understand some of the long-term drivers for BTC, we examined several key drivers of gold, notably its tendency to rise when real yields fall. Lower expected rates of return on bonds also reduces the opp. cost of holding non-income producing assets like gold and bitcoin.

11/ Another widely debated topic is what will happen to the price of $BTC during the next recession? While bitcoin lacks historical precedent, we took a look at how gold performed during and around recent U.S. recessions dating back to the 1980s (spoiler: watch the dollar).

12/ Before closing out our macro backdrop section, we also discuss the outlook for traditional asset classes and how expected returns over the next 10 years looks far more bleak than the last decade.

13/ The rest of the report dives into various aspects of the space such as the change in venture funding, the potential impact of Libra, as well as taking a look at major updates smart contract platforms made in the past quarter.

14/ We also partnered with our friends at @TheTIEIO and @Globalcoinrsrch to provide our subscribers with additional insights on sentiment analysis and the Asia market, respectively.

15/ Before closing out this thread, we want to take a moment to thank all the exceptional contributor pieces we received this quarter. We appreciate your insights @OJRenick @scottarmy_ @danzuller @everett_muzzy @cherdougie @crypto_bobby!

16/ Lastly, we also want to thank @kyletorpey for highlighting our report in his recent write up for @ForbesCrypto

forbes.com/sites/ktorpey/…

17/ As always, we appreciate your time! Please don't hesitate to reach out if you have any feedback or questions!

You can view the entire report as well as get access to our Member's Portal by signing up for either of our subscriptions here: delphidigital.io/research