Bitcoin & Market Structure
Bitcoin remains the dominant cryptocurrency and the benchmark for the market. Its market structure — exchange concentration, derivatives positioning, on-chain flows and the behaviour of large holders —differs materially from traditional markets and creates distinctive patterns of volatility and trend.
Liquidity
Crypto liquidity is shallower and more fragmented than traditional markets, which amplifies moves in both directions. Global dollar liquidity conditions — driven by central-bank policy — have become an increasingly important macro driver of the asset class.
Macro Relationships
Bitcoin's correlation with traditional assets is not stable. In some regimes it has behaved like a high-beta tech asset, sensitive to real yields and risk sentiment; in others it has traded on idiosyncratic crypto-specific drivers. Identifying the prevailing regime is essential.
Correlation Regimes
Correlations in crypto shift. Periods of high correlation with equities give way to periods of decoupling. Assuming a fixed relationship with any traditional asset is a common analytical error. The correlation regime itself is something to monitor.
Risk
Crypto carries exceptional volatility, regulatory uncertainty, custody and counterparty risk, and the possibility of total loss. Position sizing and invalidation are if anything more important here than in any other market. Risk management, not conviction, governs outcomes.
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