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Weekly Market Update: Binance Pays a Record Penalty

In this weekly crypto market update, we take a look at the recent developments with CZ and Binance, along with other macro economic developments and highlights from the crypto space and around the world.

Posted November 29, 2023

Banner for Easy Crypto Weekly HVC Update showcasing the Binance logo in front of a judge
Banner for Easy Crypto Weekly HVC Update showcasing the Binance logo in front of a judge

The biggest news event in crypto this week was Binance which has entered into a plea deal with the US Department of Justice for US$4.3bn. The government clearly wanted to send a message.

Given Binance accounts for ~50% of the global exchange market volume, it is remarkable that the markets barely blinked. In fact, there are plenty of rumours circulating that cleaning house with Binance is a precursor to getting any spot ETF approved. The TLDR of these is that Blackrock is running the world. 

In global news, oil continues to slide as we get more indicators of economic slowdown. Geopolitically there have been some concessions in the Israel-Hamas war, easing tensions a little. While the Ukraine situation looks like a continuing war of attrition. 

In major economies, the US is a mixed bag with PMI down but unemployment and GDP improving. European inflation is improving rapidly, however Germany and the UK’s growth and GDP numbers aren’t great. 

The problem of China’s anaemic birthrate was laid bare; without radical changes in technology adoption and births, their future has some massive challenges. Japan’s CPI is edging up, and many Asian economies are looking healthier. Locally, it is looking like the approach of ‘going softly and late’ at inflation in Australia means they are on the wrong side of the curve, however today’s CPI print is helping.

In New Zealand, there are more signs of a slowing economy with retail spending below estimates, however the RBNZ monetary committee sees risk from government spending and immigration growing. In response they held the OCR steady at 5.5%.

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The Crypto market sentiment has crept up slightly this week with us remaining firmly in greed territory.

Screenshot of crypto fear and greed index for November 29 2023.

Highlights this week: 

  • Domestically, our buy-sell ratio continues to skew strongly towards the buy side while OTC volumes continue to trend upwards with the top picks being BTC and USDT.
  • This week saw a return of bullish momentum in the top 30 assets with ~70% posting gains, most in the 3-7% range.
  • At the time of writing BTC was up 2.9% breaking the critical $38k USD mark (NZD $63k), while ETH gained 4% to sit above $2k US (NZD $3.4k) 
  • Uniswap (UNI) was our top performing asset this week, up 25%. 
  • Our biggest loser this week was Pancakeswap (CAKE) down 7%.

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Highlights from the crypto space

Ark Invest have come out with their proposed spot Bitcoin ETF pricing – 0.8%. 

As mentioned last week, Binance settled with the US Department of Justice for $4.3bn. CZ also had a $50m settlement and has stepped down as CEO.

News at time of writing was CZ has to stay in the US until the case is settled. Prices remained stable which I’m interpreting as the market seeing a major risk being removed. Richard Teng is the new CEO. Binance messaging is “let’s put this behind us and move forward”. 

Screenshot of Freddie Raynolds tweet

Kaiko reports that Binance’s market share slipped initially on the news, but has since recovered to 46%. This is down from 70% at the start of the year. Kaiko is also saying that the volume in AI lined coins is ripping at the moment. 

Line chart of Binance market share of volume by Kaiko

A16 (Andreessen Horowitz) put out their state of the crypto market report this week – they are a big supporter of Web3 and see blockchains/crypto addressing some of the challenges that AI will bring. 

Panterra Capital’s blockchain newsletter is out and it’s a doozy. It touches on the Macro market, ETF’s, old white men who don’t get tech but who dump on it and all that other good stuff. 

“This [time] is different. A BlackRock ETF fundamentally changes access to bitcoin. It will have a huge (positive) impact.”

Other notable highlights from the crypto space:

  • Bittrex Global announced that it is shutting down, get all your stuff off the platform by 4th December people.
  • Apple is being sued for blocking Peer to Peer crypto payments which limits feature competition.  Paypal’s Venmo and Blocks Cash App were allegedly in on this.
  • Bitcoin Ordinals volume hit new highs this week.
Ordinals volume chart by Dune
  • There are whispers (again) that Mt Gox creditors might finally see a repayment from the 2014 hack. If you have held on for the last 9 years, this represents quite a dilemma. BTC was ~$600 when it was hacked…. You get my point. 
Illustration of mt gox
  • Speaking of hacks, it looks like there were a couple of DeFi exploits this week. Kyber, and HTX look like they have both experienced a ‘security incident’. 
  • Woops, a user has made a very expensive mistake on a Bitcoin transfer, however they did it, they spent 87 Bitcoin in fees. 
  • USDC issuer Circle is bringing USDC to Japan in partnership with SBI holdings. 
  • The UK investment fund has approval to start tokenising so it can enjoy the efficiency gains of blockchains. 

And that sums up the major updates from around the crypto space. Moving on, we’ll take a closer look at other macroeconomic developments from around the globe.

What is going on in the world of Finance … 

China has an outbreak of a mystery illness. They have told the WHO the virology is nothing to worry about, but for obvious reasons it’s getting headlines.

🌎 Macro news TLDR: Holiday break 

U.S. economic news

This week was thanksgiving, so a pretty slow news week in the US.

The Chicago Fed National Activity Index (CFNAI), a monthly index designed to gauge overall economic activity, is at its lowest in 7 months

However, a GDP indicator is showing strong gains, forecast to be up 2% by the Atlanta fed. Unemployment fell this week with jobless claims down 29k. 

US PMI’s had manufacturing in slight contraction at 49.4, while services PMI was up to 50.8. New house sales, which had been showing signs of a correction, fell significantly in October.

Meanwhile in Europe….

The ECB financial stability board has said the banks are solid, but there are “early signs of stress” as loan default rates creep up. 

European flash PMI for October improved slightly to 47.1, however demand is still weak. ECB President Legarde said they are in a position to pause further rate hikes as CPI hit 2.9% for October. 

Germany’s GDP contracted 0.4% for the year to October, this is slightly more than forecast. 

The UK government downgraded its growth forecast and increased its inflation expectations, they also handed out some tax cuts to help stimulate growth… which might be inflationary? Tough times lay ahead and investor interest in the UK is cooling. 

Line chart showing UK economy growth outlook by Reuters.

And in Asia Pacific…

China’s demographic problems keep growing. They reported under 10m births for the first time since 1949…

Singapore’s Q3 GDP rose to 1.4%. Singapore and Japan both downgraded the outlook for future growth. Japan’s CPI is ticking up slightly to 2.9%.

Staying in Japan, their inflation dynamics are forcing a major rethink from local investors and putting pressure on the central bank. It’s a clear outlier. 

Chart showing inflation rates in US Euro zone japan UK and Australia

Taiwanese industrial production continues to struggle, but the declines are moderating. Meanwhile, Indonesia’s central bank held rates steady at 6%. 

Over in Australia the RBA minutes from the November meeting were hawkish. The new RBA governor said that they fear most of the inflation is dometic with members noting that businesses are passing on higher costs to consumers fueling inflation? …What do they think is happening? Judo bank PMI measures have Australian manufacturing in contraction for November at 47.7 and services down to 46.3.

In NZ, retail sales for the September quarter fell 3.4% year on year. Adding to the spend pressure, global dairy prices were disappointing again, falling 2% in NZD terms as our currency moved. 

That’s a wrap for this week. Thanks for reading!

Stay tuned for the next update.

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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.

Last updated November 29, 2023

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