Weekly Market Update: All Eyes on the Halving

With the lead up to the Bitcoin halving and a CPI update from the US Federal Reserve we find ourselves in a fairly slow news cycle this week. 

In crypto everyone is looking at this halving cycle and trying to unpick what happens next with Bitcoin.  We’ve never had an all time high before a halving, we’ve also never had ETFs, or had a halving occur when interest rates were high.

As per last week’s news, we are seeing increased selling activity from both short and long term holders at this point in time.  While all halvings are different they do rhyme, so we are all guessing ‘where to from here?’  Key dependencies like interest rates, liquidity and access are all playing their part this time around. 

Big news events this week centred around the US government potentially selling $2bn of BTC from the Silk Road case, plus the apparent sale of 30 million locked up SOL by the FTX estate. We also saw another non-US stablecoin announced and Coinbase got a good result in the courts. 

In wider economic news, there has been a spike in oil prices due to increased middle east tensions, flooding in Russia and OPEC+ actions. On Thursday we will get the latest CPI news from the US. Their jobs market looks like a confusing mess of data. 

Elsewhere, Europe’s CPI is nearly into their target band while China posted some healthy service PMI data.

In Australia … things are not as good.  I mean they are posting surplus and retail growth… just not as good as before. Meanwhile in New Zealand our economy is clearly struggling, but you wouldn’t know it as the RBNZ perseveres with its restrictive monetary policy which continues to strangle any growth .  

It has been a fairly volatile week for prices as we head into halving, however we have remained range bound on price so it is no surprise that the crypto market sentiment remains in extreme greed.

Highlights this week: 

• Established wisdom is that we always get more volatility heading into a halving.  This week was no exception with Bitcoin ranging between US$65-72k this week. 
• Across the majors, the overall trend has been down, having said that, those assets that had a good week, had a really good week. 
• Our buy – sell ratio has tipped toward a sell side bias, in line with global market trends. The most sold coins are reflected by the top 5 in the market cap tables. 
• At the time of writing BTC and ETH were up 4% and 7% respectively. 
• Bitcoin Cash had a great week up 58%, NEAR had a good week up 25% as did SOL up 20%. 
• Nervous Network (CKB), up 87%. 
• Litecoin (LTC) was our biggest loser this week, down 8%.

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

Highlights from the crypto space

Lovely chart from Kaiko highlighting where BTC sits relative to its all time high at 2 weeks out from the halving.

Speaking of the halving, a reminder this is looking likely to happen on the 19th of April. Noelle Acheson of crypto is macro does a great job of summarising what the halving is, and then concludes that the halving is NOT priced in.

A US government wallet holding 30,000 Bitcoin seized from the Silk Road investigation have been moved to Coinbase.  These are valued at around $2bn. 

The spot Bitcoin ETFs did $111bn in volume in March which is about 7-8% of the total market volume.  Not bad for a 3 month old product. 

Glassnode research out this week reinforces the position that Bitcoin’s long term holders are using the recent all time highs to realise profits. 

Ripple has announced it is launching its own US dollar backed stablecoin.  The coin isn’t named yet, but rumours are it will launch on both XRP ledger and Ethereum. Ripple’s CEO also mentions that they think the SEC claims are unreasonable and they will settle for “millions”.

Other notable highlights from around the crypto space:

• There are concerns that Europe’s MiCA legislation will force DeFi underground or into a position of locally enforcing KYC. 
• Coinbase won a case against the SEC confirming that secondary sales on its platform did not violate securities laws in the US.  
• Base, the Coinbase layer 2 network has recorded over $4bn in total value locked up making it number 3 on the layer 2 lists.
• Paypal is running out a new service that will let US customers use their PYUSD to send and swap to USD without being charged fees on Paypal’s Xoom platform.
• Staying with Stablecoin news, Sony Bank in Japan is experimenting with a Yen backed stablecoin.  
• UltraSound money reports that ETH remains in strongly deflationary territory, just as planned from the merge. 

• $APT has a big token unlock this week, approximately $350m worth. 
• The FTX estate sold 30 million of its locked up SOL tokens at a hefty discount with the average price paid being $64. In doing so they raised 1.9bn. They reportedly have around 11 million SOL left. Staying with Solana, the surge in volumes is causing a lot of failed transactions.

And that wraps up our highlights from around the crypto space. Stay tuned below for other macroeconomic updates from around the world.

What is going on in the world of Finance … 

Containerised shipping costs continue to fall from the highs early in the year and are now below $3k per 40ft container.  Bulk cargo is following  a similar pattern after several months of rises. 

Oil prices have jumped in the last day. The two drivers were OPEC+ decision to extend supply cuts and fears that the Middle East conflict may be about to escalate following Israel’s attack on the Iranian embassy in Syria. 

🌎 Macro news TLDR: …US jobs market is a hot mess.

U.S. economic news

The US jobs market continues to defy the Fed, ADP reporting that the economy added 184,000 jobs in March, considerably above the 140,000 expected. 

Unemployment claims remain subdued. Non-Farm Payrolls blew past the 200k expected to come in at 303k. Unemployment actually declined to 3.8%. Digging into the data uncovers that its not all good news, with most of the jobs being part time.

All of this will test the Feds conviction to keep rates up until things cool. There is a CPI announcement later this week hence the news blackout.  Markets though are now betting that a June rate cut is only a 50% chance, this is down from 75% last month.

Meanwhile in Europe….

European harmonised CPI dropped more than expected, coming in at 2.4%, energy costs being the major saviour. 

German industrial production has staged somewhat of a turnaround, up 2.1% for the year to February. 

And in Asia Pacific…

China’s CAXIN Services PMI came in at 52.7 for March, the services sector continues to show expansion. The Indian and Philippines Central banks held rates at 6.5%. 

Australian retail sales are up 1.6% on the year to February.  This is below inflation so should be thought of as a drop in volume. They also posted a A$7.2bn trade surplus, well below the $10bn expected. Consumer Sentiment remains glum as well.

While the RBNZ does its own thing, it is pretty clear that the New Zealand economy is struggling in real terms and the term ‘technical recession’ is masking some big problems. NZ OCR announced Wednesday

That’s a wrap for this week’s market update. Be sure to stay tuned for the next one!

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