Weekly Market Update: We’re back baby

In more ways than one. Late December and early January were characterised by market malaise. Concerns about US inflation and fewer rate cuts meant the balance of opinion swung bearish over the break. Well that all changed!

It is clearly the Trump show at the minute. From both a crypto and macro economic point of view, it all seems to hinge on what happens next. 

In crypto news, Bitcoin had a heck of a week ranging from US$89k to a new all time high of $109k. XRP is doing pretty well now that Gary Gensler is gone and SOL ripped because of the launch of the TRUMP coin. We now live in a world where the US President and his wife have launched memecoins. Ordinarily I’d suggest laying off the shrooms… what a time to be alive.

Sticking with the surreal, JP Morgan sees a positive case for Bitcoin, Pump.fun doesn’t appear to make anyone rich, Coinbase has launched a BTC loan product, Sony launched its layer 2, an AI agent was given control of a wallet for the first time and the SEC got a serve from the courts. 

In wider economic news, the US Fed signalled a slower pace to rate cuts forcing the markets into a tantrum and a pullback, however CPI data out later followed by a signalled delay in any tariffs rejuvenated market sentiment leading to a decent bounce in risk assets. 

In Europe, the UK’s inflation was lower than expected which was a relief to markets. Germany however is solidly in a recession and Russian inflation continues to rise. 

Turning to APAC, China’s exports and GDP both surprised to the upside. India’s inflation eased slightly. Meanwhile the Bank of Japan is trying to signal that a rate rise might happen. They seem trapped!

In Australia, employment prospects remain buoyant. Immigration is running hot as well, but consumer confidence is down. 

In New Zealand card spending is still flat, however filled jobs rose, business confidence is up and food prices are down. CPI data for Q4 was squarely within the RBNZ target range for the second quarter in a row and raised hopes for another 50 bps rate cut. 

Market sentiment has chartered the same course as Bitcoin’s price over the last month, however remains in extreme greed territory.

Highlights this week: 

• At the time of writing, it has been a very solid week of gains with most top 30 assets posting gains.
• As this is the first update this year, I’ll give you the consolidated view; our buy – sell ratio is trending toward the mean by order count, with a strong bias towards the buy side.
• By order value we can see that the recent all-time-highs led to some profit taking, but is still skewed toward the buy side with our higher spending customers leading the way on the buy front. 
• XRP and SOL are proving very popular and are trading outside of their normal volume as the price appreciation attracts traders. XRP buy orders are well up as are SOL sell orders. 
• At the time of writing BTC was up 10% for the week. XRP was up 18%, while SOL led the way in the top 5, up 39%. ETH was up 3% while BNB was the outlier, down 1%. 
• No surprises, TRUMP was our best performer this week, up 582% for the week. 🤯
• FLOKI was the worst performer this week, down 8%. 

View all top gainers: Visit the top gainers page to find out more. 

Highlights from the crypto space

Wonder what will happen next? Charlie Bilello 2024 year in charts is something! 

XRP is doing well relative to the market on an expectation that with Gary Gensler departure, their ongoing SEC court case will get tossed out. 

JP Morgan has said that persistent global uncertainty means that gold and Bitcoin will continue to be favoured as the so-called ‘debasement trade’ is here to stay. 

One year since their launch, the spot BTC ETFs have had a profound impact on the market and are incredibly successful. 

Ahh, what section to put this in. President Trump launched a memecoin on Solana which ripped up, then his wife (or maybe not officially his wife) launched a memecoin ($MELANIA).

However, someone started to sell large quantities of $TRUMP which nuked prices. Memecoins are not for the fainthearted. Be careful out there folks. 

Because of all the TRUMP volume, SOL also ripped, unfortunately the Solana network faltered due to demand. Transaction failure rates got as high as 40%. 

Coinbase launched a Bitcoin loan product. Apparently it functions a bit like a reverse mortgage. 

The IRS in the US has released its DeFi regulations which means front ends will need to do KYC and report to the IRS from 2027.

For all the Pump.fun hype, it looks like only a few are making any real profits, like 0.4% of traders making over US$10k. 

The SEC got another serve from the courts, and has been remanded to provide Coinbase with a more complete explanation of its position. 

Binance is the 10,000 pound gorilla of CEX exchanges, the only country where it’s not? USA

Other notable highlights:

• Tether is moving its HQ to El Salvador. 
• Sony launched its layer 2 network – Sonieum. 
• An AI agent has been given control over its own wallet for the first time. 
• The South Korean regulator is lifting a ban on institutions trading crypto. 

🌎 Macro news TLDR: …Oil on the rise.

The US has increased its sanctions against Russian Oil forcing China and India to buy from other sources. Global diesel prices are up and Oil is likely to follow. 

The US is also applying mercantile strategies to AI chips, ensuring it and its partners maintain their lead. 

U.S. economic news

The Fed’s December meeting minutes spooked the risk asset sectors as it shows an organisation clearly signalling slower rate cuts.

Some of this is forward looking and hinting that President Elect Trump’s policies will lead to higher costs. Another factor is an unrelentingly strong jobs market that keeps surprising to the upside. 

US PPI rose less than expected in December coming in at 3.3%. Energy in particular was up. 

US CPI data for December pleasantly surprised markets worried about increases. Headline CPI came in right as expected and core was slightly lower at 3.2%.

Finally, President Trump has backed off plans to levy Tariffs on day 1, and the market liked that a lot. 

Over in Europe….

The UK got some welcome news on the inflation front with headline CPI coming in below forecast at 2.5% and core CPI declining to 3.2%.

Burrowing costs immediately fell. However, the news isn’t so good in Germany who recorded their second year of economic contraction. 

EU Block Industrial production for October rose, but was down 1.7% year on year. 

Russian inflation continues to rise, now at 9.5%. 

And in Asia Pacific…

It’s coming into the Lunar new year so Asian news might be a little light. Chinese exports surged 6.7% in December over November and were up 11% year on year. China’s GDP came in quite a bit higher than expected at 5.4%

India’s CPI eased to 5.2% in December, however food prices are still an issue. The BoJ president signalled a chance of a rate rise next week putting markets on edge. 

Australian Consumer confidence slipped for the 2nd month in a row. Employment data painted a solid picture in Australia as well. Immigration is still running at high levels too. 

In NZ, Stats NZ reported that the number of filled jobs rose by 6000 (0.3%) in November. The quarterly survey of business opinion showed an uptick in business confidence, however actual trading conditions remain weak. Card spending is down as well. Food price inflation is running at 1.5%, and that is high because of (get this) butter. 

Q4 CPI was a bit of a mixed story, headline CPI came in at 2.2% annualised which was slightly above RBNZ’s 2.1% forecast, however non-tradable (domestic) inflation came in 4.5%, well under the 4.7% expected. Rents and rates are the major inflation drivers at the minute. Core inflation came in at 3%, down from the previous quarter. 

That’s a wrap for this week!

Stay tuned for the next update.

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