November 2022 Recap: Time for Cool Heads & the Latest in Macro-Crypto Space

November 2022 will go down as one of those pivotal moments in crypto history. Early in the month Glassnode and Delphi Digital, both started commenting on how Bitcoin Volatility was at record lows.

They even went as far as to say “All the previous times we’ve been here, there is often a large volatility spike soon afterward. But I don’t think they envisioned FTX collapsing.

That being said, the highlight of this month’s crypto market recap involves:

• U.S inflation rate stabilising, job markets slowing down, especially in tech.
• Bank of England and European Central Bank taking precautions for impending recession.
• Situation point on Ukraine conflict and its repercussions on commodities around the world.
• Current trends and portfolio activities in the crypto space.
• And other macro economic activities in the past month.

More details to be discussed below.

Missed last month’s recap? Read the previous month’s market recap.

Current state of macro economy and crypto

Most annoyingly, the Macro indicators were starting to line up pretty well. In the last month we have seen signs that US Inflation is cooling down.

There are definite signs that the U.S. Job market is slowing down and some of the tech giants are certainly feeling the pain.

In the UK, the Bank of England raised their interest rates by 75 bps and delivered a pretty bleak message about an upcoming recession. They then went on to raise tax rates, talk about a policy reversal. 

A very similar story is emerging in Europe with the European Central Bank lifting its rates by 0.75% in response to multiple data points of inflation across the zone combined with an impending recession on the horizon.

Just this week the ECB president Lagarde said she would be surprised if inflation had peaked. More for longer is the key message emerging. 

While the situation in Ukraine has worsened for the population, where there are predictions of 6 million people now without electricity due to the conflict, the impact on neighbouring countries and Europe as a whole could also be quite large. The conflict there impacts major commodities like oil and wheat so its repercussions are being felt around the world.

In China, the slowdown of factory activity is also impacting other commodities like oil. And now tensions are rising  as the population tire of lockdowns and the zero covid policy. 

We have also seen some more volatility thrown into the world economy as North Korea launched missiles and Taiwan midterm elections went a decidedly different course from that expected.

On the positive side, the much discussed Ethereum Merge has led to its supply being deflationary. 

Interestingly BTC Hodl waves are at levels last seen in 2011.

“Notably, the percentage of coins held for at least a year has risen from nearly 54% on Oct. 28, 2021, to a record high of 66% on Oct. 28, 2022, … Despite the worst year in stocks and bonds in centuries, Bitcoiners have never held on to more Bitcoin”.

El Salvador has gone full diamond hands with the government announcing they are dollar cost averaging (DCA) into BTC every day.

Because of its growth early in the month and then subsequent fall due the FTX situation, Crypto volatility has really picked up. 

Right now it is really hard to know who is in a good state or not. So for now at least, it looks like the market has spoken, and a back to basics approach of “not your keys not your coins”, DeFi centric approach might be at play.

Trends and portfolio activities

Turning to our order trends. Overall, we have seen way more buy orders than sells, however at an actual value level, it is much more evenly balanced.

We have had a number of conversations with people who are de-risking themselves, getting their coins off exchanges and converting their crypto to Fiat lately. Given how crazy it is out there, it kind of makes sense.

The trend we mentioned last month, that of more of you using Dollar-cost Averaging for longer term investments, has continued. Despite the current market volatility we have continued to see an increase in orders and users of this service.

This is great to see as it’s a smart response and as we noted previously, as a tool to manage the volatility risk, DCA is a great candidate and it also removes the pressure of “buying the dip”. 

This month’s price bolter was TWT (trust wallet).  In a tough month it was up 75% at the time of writing. Another impressive mover was LTC (Litecoin) up 33% this month.  

The biggest decreases were felt by coins associated with the FTX fallout or Sam Bankman Fried. Solana was down 60%. NEAR and CRO were down 45% on rumours they may be in trouble, while NEXO got punished for being like Blockfi and Voyager, down 38%.

Clearly the market has spoken on the Ethereum Merge, with EthereumPOW, the token issued by miners who didn’t like the switch to PoS, was down 55%.

When we look at what is most popular with the Easy Crypto community, BTC holds the top spot as per usual. However, this month we saw ETH move to 3rd behind USDC. Interesting indeed.

DOGE had a good month of volume on the hopium that Elon taking over Twitter would be good news. Other Layer 1 options like LTC, XRP, SOL and BNB have also been top assets .

As mentioned above, with the increase in sell order value,  it was not a surprise that stablecoins like USDC and USDT were some of the most popular assets to sell.  We also saw quite a bit of BTC selling this month too.

To see how the coins above, and others, performed last week Check our crypto live rates.

Check the latest crypto rates: View the latest rates.

What’s been happening in the crypto space?

There has been a great deal going on in the market at the moment so here are big themes we’ve noticed:

1. The biggest news this month is undoubtedly FTX. The complexity and scale of the FTX collapse is still being worked out. The new CEO is less than impressed with his predecessor SBF (well duh!) and the bankruptcy filing is laying bare the scale of the problem FTX faces. It doesn’t look pretty.

2. In response, we have seen a global trend of moving assets out of custodial exchanges.Your keys, your coins. There is also plenty of speculation that this is going to be good for DeFi. 

3. El Salvador has announced they are dollar cost averaging (DCA) into BTC every day. They have also put forward their Volcano bonds issuance to their legislature  which could lead to more BTC purchases for the nation. 

4. Meanwhile, according to Glassnode data below, the number of ETH addresses holding more than 10k ETH has increased through November.

5. Meanwhile, Bitcoin miner revenue is at a 2-year low because of increased hash rate and lower prices.  This could lead to more miners getting into financial trouble.

6. Somewhat ironically, Binance has announced a rescue fund that is “aiming to stave off cascading effects” of the FTX failure. In other Binance news, Nouriel Roubini took aim at CZ, Binance and the wider crypto sector at a Dubai event.  

7. In a widely expected announcement, troubled lender Blockfi has filed for chapter 11 bankruptcy. 

8. Fidelity is adding ETH to its custody solution on the back of customer demand. This month they published a report into institutional investor purchase preferences which details the investor demand they previously signalled. 

That’s it for this month’s update! We hope you found something useful for your awareness of what’s happening out in the crypto universe.

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