SwissOne Capital Bi-weekly Crypto Boost [ARB]

Early July 2023 Crypto Boost

Why are we in a new Bull Market? Here are 6 significant reasons indicating why we are at the beginning of a new Bull market for Bitcoin and the rest of the Digital Asset market.

1) BTC price has double bottomed followed by higher highs and higher lows – Indicating a «buy-the-dip» strategy

2) The Nasdaq has almost fully recovered from its -37% drop, yet Digital Assets have hardly moved (late cycle movers), and have a lot of catching up to do relative to the Nasdaq.

3) The DXY (Dollar Basket) making lower highs and now the break lower after yesterday’s CPI data that would drive demand for growth assets.

4) US 10-yr Treasury Yields making lower highs – pointing to monetary policy easing 6-12 months away? A slight blip in the reaction to employment data last week but quickly retracting after the CPI data yesterday.

5) Many steps closer to a Bitcoin ETF launching in the US putting it on the global asset class map. Leading asset managers have completely reversed previous statements now calling Bitcoin «Digital Gold» – an element that was missing in the previous Bull market.

6) Less than 12 months away from the next Bitcoin halving (a mining rewards term) – translating into lower supply inflation while demand continues to grow driven by wider adoption. Each Bitcoin halving has precipitated each of the previous Bull markets.

Bitcoin Technical Outlook: Since the breakout of its downward trading range towards the end of June 2023, Bitcoin has been caught in a range between $29.5-31.5k. This has been driven by significant bid/ask liquidity at the ends of these ranges and will take a significant event in order to break this ton of liquidity. Needless to say, a break above $31.9k would likely be followed by a quick move to the high 30’s while many significant support levels will need to be broken at $28.8k, $27.5k and $26.2k levels.

Why SwissOne Capital?
SwissOne offers seamless access in to the Crypto Asset ecosystem via traditional market channels. Offering the Top 50 Crypto Assets momentum-weighted as well as Smart Metaverse strategies, SwissOne brings you direct and sensible exposure to this uncorrelated and high growth asset class. Operating with institutional-grade European financial service providers, there is a safe and secure passage from traditional markets into Crypto Assets.

Top 50 Crypto Performance
(past 30 days-to-date)

COIN FOCUS
Arbitrum (ARB – $1.12; ATH – $8.67)

WHY
Ethereum, as a Layer 1 blockchain, faced network congestion and experienced increased transaction costs due to the growing popularity of decentralized applications and smart contracts. The main driving force behind this congestion is the limited capacity of the Ethereum blockchain to handle a large number of transactions within a given time frame, which is inherent to its consensus mechanism and block size design.

In response to these scalability challenges, Layer 2 solutions, such as Arbitrum, have emerged to address these limitations. Layer 2 technology aims to enhance the scalability and efficiency of the Ethereum network by offloading transactions to separate chains or rollup solutions, thereby alleviating network congestion and reducing transaction costs.

WHAT
A Layer 2 solution is a technology built on top of the Ethereum blockchain that aims to make transactions faster and more efficient by processing them off-chain while still benefiting from the security of the Ethereum network.

The Arbitrum DAO is governed by holders of $ARB tokens and has a built-in treasury system (implemented as a smart contract); the DAO’s treasury is used to fund ongoing development and maintenance of the organization and its technologies. Token holders govern by proposing and voting on how to use the treasury’s funds.

HOW
Arbitrum tackles Ethereum’s issues by offloading transactions to a separate chain. It then utilizes a technology called “optimistic rollups”, where multiple transactions are bundled up together and submits them back to the Ethereum mainnet.

This approach assumes the validity of transactions, allowing for their processing without immediate validation on the Ethereum mainnet. Network participants have the ability to use a dispute mechanism to contest any faulty transactions, ensuring the integrity of the system. Withdrawals from the rollup may take up to 7 days due to the complexity of the process involved. (SwissOne Capital/mc/ps)