Delphi Digital


Jason is Head of Markets at Delphi and helps to provide insight into various macroeconomic and digital asset trends and narratives. Prior to Delphi, Jason worked on a fixed income trading desk and at JP Morgan’s Private Bank, working closely with private

For me its very difficult to thing about specific levels once a chart breaks ATHs, especially with assets such as BTC. When we broke 20K, there was no real way of gauging ahead of time which levels would matter as you don't have any historical precedent to work off of. Moreso looking at the metrics that have been in the drivers seat of this move.

That said, ETH and SOL still haven't quite reached those types of breakouts just yet.

When looking at SOL higher timeframes/weekly charts, there really isn't much in the way of resistance at this point. The immediate levels I would be paying attention too is around $200 and then probably ATHs.

For ETH, its a relatively similar picture. The $4000 level has historical relevance to last cycle and represents a clean 2x from the $2000 level range break back in November. And then you'd expect the market to start looking back towards previous cycle highs.

no one can stop me from riding BONK to multi billion market cap if the SOL thesis plays out and it goes back to the highs :)

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"A healthy asset trading distribution is one in which the more “quality” assets are the ones that garner the most trading activity."

looking back at it now, we actually see alts continue to make ground with respect to asset trading distribution.

currently, alts make up 33% of crypto OI dominance (danger zone for me is when we get back towards 34-35%+) as they've lined up with local tops historically

hard to tell what the distribution within alts is (need to pull data by asset here), but I'd think a lot of this has been driven by SOL and similar names in recent days.

will come back with an update here/on the activity feed in the coming days for sure

yeah exactly, haha. not saying there is no risk as there certainly is

but assuming you run a legit credit and lending business and run the proper diligence checks and have safeguards in place, CB should be able to avoid many of the issues that we've seen plague centralized lenders previously

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"The End Game has begun."

sometimes you just write out a big macro focused piece to organize all of your thoughts.

truth be told, this was part 1 of a wider report series with the crypto teaser coming in at the end

hopefully we can finish part two in the coming weeks!

I dont think opening a loan book is necessarily an issue

I think opening a loan book and not doing proper diligence on who you are lending too was a huge issue. The whole 'trust me bro' attitude.

I also think the people borrowing money from these centralized lenders were also doing nefarious activities, misrepresenting assets under management, double borrowing from the same pool for assets without disclosures, etc.

Credit and Lending solutions are some of the most sought after financial services in all of traditional finance. Credit and lending desks are absolutely necessary for institutions to do institutional size investing.

With the centralized lending landscape completely decimated in the industry, there is certainly an opportunity for a player to step in and provide these services. Hopefully coinbase has learned from the mistakes of industry peers, and does a better job on both their onboarding process of all clients and counter parties, and their due diligence process on specific loans. Additionally, insisting on external audits is probably a good mitigant.

big fan of the fuzzy anecdotes as I do a similar exercise.

how are these looking now, say compared to maybe 6-12 months ago?

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"consensus sell-side estimates don’t even expect"

we took the sell side estimates from several of the leading equity research reports (on bloomberg), and looked at the average of them all, and this was the output when modelled based on their inputs

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"This will be our third and most bullish scenario"

great comment lad

i agree with this "If we really had spot BTC ETF demand in each of these scenarios, the bid would probably push BTC price up (and as a result BTC mcap) significantly"

You can probably assign a multiplier... something like 5x... wrote about this in inelastic market hypothesis report that shows $1 of market demand typically leads to $5 change in market cap. link to the academic paper here (https://www.nber.org/system/files/working_papers/w28967/w28967.pdf)

the hard part is determining the flows, and how much goes through CB, and what type of flows these are (primary mkt activities or underlying asset trading activities).

you have primary market activities (which was analyzed in the above report) which is related to redemption/creation of ETF shares.

you also have secondary market trading of ETF, which theoretically is just the ETF equity being traded and not necessarily the underlying.

and then you have new flows on the underlying asset that come in as a result of regulatory clarity/ETF approval.

its quite a complex scenario when trying to determine how CB will ultimately benefit. and determining the impact on BTC market cap due to ETF approval is separate analysis.

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"To be fair, Wall Street is not entirely wrong to value COIN this way"

sorry if this was worded confusingly.

we are saying that wall street isn't entirely wrong to value CB in the way they currently are BC the majority of their revenues come from these sources.

however, if we are to try to imagine what CB will look like in the next few years (and mkts are fwd looking), only taking these sources into account is missing large potential drivers (CB international, etc etc)

depends entirely on someone's risk tolerance and preferred style of trading. that said, there are a few rules of thumb:

if you are playing the long side, you must give yourself room for 10-20% pullbacks. this should inform your sizing.

knowing that these always end with a nice dump, you can also wait for the short side. this is more tricky and requires more discipline and skill. this should also inform your sizing. shorting things like this require a near infinite leash on the capital/collateral you are using to fund the position.

my preferred venue is bybit, and i often trade through some 3rd party OEM like Insilico Terminal or Sandwich Trading.

I think the short-medium term outlook is challenging, wrote about this in a few of my more recent activity feed posts. Absent new flows into the space + most bullish catalysts expected in 2024 make it tough in my view.

Also, big liquidation events like the one we recently saw typically take some time to fully play out. Lots of examples of this from prior events. Think of big liquidations like throwing a rock into a pond; it takes a while for the ripples to die down and a more balanced/equilibrium market to resume.

What do we think about the bonding curve, fees, spread, etc?

Do we think this is something that can gain a wider audience outside of CT given these mechanisms?

oh yeah agreed, there are plenty of macro things we could show here to your point (DXY, yields, etc.)

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"If history serves as a reliable guide, that would imply at least another 130% rise in BTC’s price from current levels over the next 14-16 months."

i look at volume/oi dominance instead of pure market cap dominance when trying to gauge market health.

for example, i like to use altcoin OI/volume dominance to see how risky/degen the market is behaving in relation to previous periods. the higher these levels, the more over extended/degen the market is likely being. when the market as a whole is positioned in this way, i like to be cautious.

i wrote about this dynamic in a few activity feed posts

"Anyway, I am down on approximately 99% of all my NFT purchases, so what do I know?"

One of us, one of us!

In all honesty tho, lovers of the orange coin, like myself, are indeed watching this space. One thing I'm still grappling with is if NFTs will be like altcoins next cycle, and new ones outperform and old ones just kind of exist.  Given last cycle was the first with real NFT things happening, time will tell.

jason has not authored any research reports yet.