Sunday Rundown - May 2, 2021

After a six-month parabola, bitcoin closed its first negative month since September 2020. Meanwhile, altcoins went bonkers.

What happens first—a new bitcoin all-time high or drop below $50k? Pick an option:

• New All-Time High

• Drop Below $50,000

As far as altseason goes, bitcoin’s dominance has dropped to levels not seen since July 2018, first seen in December 2017.

Interesting. We’re definitely shoulders-deep into altseason. Can it go on forever?

I posted a few videos to my YouTube channel, answering some questions about market peaks, selling, and altcoins. If you’re curious about what I think, visit my YouTube Channel.

Read below for some content you may enjoy.

Check out free data from The Block, including an NFT dashboard for the larger Ethereum-based NFT platforms.

The mobile version is a little wonky but there’s a lot of great data, for free.

'Damn Huge': Germany Opens Up to Institutional Crypto Funds

• Bottom line: on July 1, Germany will allow Spezialfonds to hold up to 20% crypto in their portfolios.

• My take: this headline understates the significance. German pensions, banks, insurance companies, and charities access financial markets using these funds. Some estimates put the size of these funds at close to $2 trillion—lots of money struggling to find growth assets and positive yield in traditional markets. That’s a whole new source of potential inflows into the crypto markets.

• Why we care: people get excited about institutions buying maybe $50-100 billion worth of bitcoin. As long as we remain in an overall macro uptrend later this year, it’s realistic to expect Spezialfonds will allocate a comparable amount to bitcoin and maybe even other crypto assets. Think beyond the implications for the market and the competitive pressures for anybody who does not have an allocation to crypto. Germany’s biggest pools of capital will have access to crypto for the first time.

Speaking of which, Germany’s law was one topic of the On the Margin podcast. The episode also features commentary on Nexon’s bitcoin purchase and madness in the US treasury bond market.

State of Crypto: Congress Takes One Step Closer to Regulatory Clarity

• Bottom line: one part of the US government approved a bill, HR 1602, that tells US regulators to convene a working group to recommend crypto regulations in a report due to Congress one year and 90 days after the bill passes, with the option for US regulators to extend the reporting deadline up to one additional year. (Try reading that sentence three times fast!)

• My take: while Coindesk calls it a “major” crypto bill, it basically does nothing and it passed the House of Representatives under unanimous consent, a process reserved for legislation that’s so trivial the House doesn’t even want to vote on it. Next comes deliberation in the Senate, likely some months from now (if at all).

• Why we care: this is a simple, uncontroversial, bipartisan bill that has almost no budgetary impact and changes nothing. And it will take months to pass and up to two more years before the US government gets any actionable information as a result. US crypto rules make no sense but until Wall Street makes or loses a bunch of money on crypto, good luck getting Congress to act.