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Interestingly, BTC-1.12%  has fully recovered from the post-debate dip, while both Fannie Mae (FNMA) and GEO Group (GEO-3.36% ) – both considered Trump trades – have yet to rebound. This suggests that the overnight move in crypto was more likely driven by a broader risk-off environment, rather than being a reaction to the debate outcome. Something to keep in mind as we approach November.

We are starting to see a major uplift in the Coinbase premium for BTC-1.12%  over the past couple of hours. This a sign of US spot demand starting to pick up again.

With falling rates and the potential for the NVDA4.15%  rally to extend into next week’s earnings, our AI/HPC miner equities basket presents an attractive risk/reward in the near-term. Below, we highlight the performance of CORZ2.65%  (a leader in HPC compute among Bitcoin miners) versus MARA-2.03%  (which lacks HPC services). This ratio has roughly tracked NVDA's price since early Q2. While rates and BTC-1.12%  will continue to impact all miner stocks, HPC miners can benefit from any surges in the AI narrative in traditional markets as well.

Today's crypto price action, following the drastic BLS revisions and dovish FOMC minutes, suggests that crypto's upside beta to equities has returned—a positive signal. Additionally, potential political tailwinds may be forming, with rumors that RFK could endorse Trump on Friday. If this materializes, it could give Trump a boost in prediction markets, potentially reviving the 'Trump Premium' we saw in mid-July for BTC-1.12% .

BTC-1.12%  has underperformed other risk assets over the past week. If we examine BTC's performance across different trading sessions since 8/14, it has underperformed during US market hours but has generally drifted higher during APAC and EU market hours. Notably, this coincides with the government's movement of BTC seized from the Silk Road out of cold storage to Coinbase Prime. It is possible that the potential sale of this $600 million in BTC is weighing on the market.

Stablecoin flows have been massive as illustrated over the past couple of weeks. This is normally a strong bullish indicator for crypto prices (Source: DefiLlama).

Funding rates are negative here. A good sign that the recent rally has been spot driven. A decent bid into US equity market close could squeeze us higher.

Forced selling provides a good opportunity to assess which assets bounce back the strongest. In our strategy note Monday, we noted that among the majors, SOL5.48%  has certainly been the strongest off the bottom. SOLETH just broke out to a new all-time high. While we still believe ETH-1.20%  will have its moment in the sun (eventually), for the time being, SOL remains our preferred BTC-1.12%  beta.

HNT3.20%  an old Core Strategy constituent that we reintroduced on Monday, was another asset that bounced strongly post-deleveraging. Helium has a strong fundamental narrative (strong mobile network adoption and a platform for DePin apps) in addition to holding the potential to perform as SOL5.48%  beta. HNT has continued to outperform since Monday. We still like the risk/reward here, despite the nearly 20% rally today.

We will be sending out a Crypto Strategy note this evening with some changes to our Core Strategy. In short, we saw a lot of encouraging data to suggest we bottomed today, but think its right to keep some stables on hand in case of additional downside over the next couple of weeks. Making it through the Asia session this evening unscathed will be a very good sign for the crypto market.