Weekly Market Update: Bitcoin Reigns as the Best Returning Asset Year to Date

Bitcoin and Ether have been trending sideways for 2 weeks now, both defending new support levels driven by the ETF price bump. BTC holding at ~US$30k and Ether at US$1850. At this price range, Bitcoin is up 84% year to date and we are still 10 months out from the halving. 

This week we have Coinbase and Blackrock taking on the SEC in different arenas. Nothing like deep pockets to fight the good fight. Outside of the US, Hong Kong and London continue to court crypto companies struggling with the US regime. 

Globally, indications of inflation reducing are being indicated by the data. However, central banker cautiousness means we may see more rate rises in the US. European and Chinese economic growth continues to show signs of a slowdown, with China openly flirting with deflation. This is being offset by India and Japan at present, who are both enjoying better times.

Locally, the RBA surprised again, this time with a pause, while New Zealand’s balance of payments is getting worse as our major trading partners, particularly China, buy less of our commodities. 

The sentiment in the crypto market remains firmly in greed territory, despite having come back a little from last week.

Reflecting the market sentiment, most of the top 30 crypto assets have given up some of the recent gains.

Trend highlights this week

• At the time of writing BTC is down 1%, while ETH is down 4%, Doge down 7%  and LTC down 10%. 
• Bucking the trend, coins recently deemed by the SEC to be securities had a good week with BNB up 2%, MATIC up 7% and SOL up 13%. 
• That jump means that SOL is the biggest gainer this week up at 13%.
• Algorand (ALGO) was our biggest loser of the week, down 14%.

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

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Highlights from the crypto space

NYDIG’s Q2 report is out, TLDR; Bitcoin is the year’s best performing asset, interestingly Bitcoin was only the 3rd best asset in Q2, eclipsed by some US equities. They are also saying that Bitcoin’s correlation with equities continues to fall.

It also appears that right now, the crypto market is kind of the Bitcoin show. Bitcoin dominance is up to levels not seen in 2 years.

In the options market, BTC long call option interest is has jumped 25% and Altcoin open interest is down.

The Bitcoin innovation wave brought by Ordinals continues on, someone has now used recursive inscriptions to inscribe music onto the chain. Even Vitalik is a fan of all this development. 

BlackRock CEO, Larry Fink has said Bitcoin is digitising gold and is potentially a good hedge against inflation. Speaking of BlackRock, the SEC has said their ETF application is ‘inadequate’.

The Coinbase SEC wrangle continues on. TLDR; Coinbase filed for dismissal saying the SEC didn’t have jurisdiction. SEC said they do. Game on.

Other notable highlights from around the crypto space:

• The SEC is also investigating BarnBridge, which has led to a call to stop all work on their products.
• A Judge has ordered Kraken to turn over user data to the IRS. 
• Hong Kong and London are now vying for the US crypto ‘refugees’ 
• PSA, for all the US centric news, they only account for 10% of CEX trade volume and that is down from last year.

• Denmark has ordered Saxo bank to stop its crypto activities for now. 
• The Gemini – DCG showdown continues, with Cameron Winklevoss tweeting out a $1.5bn final offer in the debt restructuring talks. With no response, Gemini then sued DCG for its users’ funds. 
• Circle is considering issuing a Japanese stablecoin now that Japan has clear rules for Stablecoins. Two local banks, Toki and Noble, have also said they are going to launch a collateralized Stablecoin. 
• Nansen reports that NFT royalty payments are at a 2 year low, with some industry players blaming Blur for this decline. 
• Heads up, Optimism (OP), Aptos (APT) and Apecoin (APE) all have big token unlocks in July. And a reminder that this month, bankrupt lender Celsius will start liquidating its assets including all its altcoins. 
• Crypto bridge, Multichain (formally Anychain) has suffered a hack. Tether has frozen $65m in stolen USDt, however you should avoid the place and revoke any permissions in your wallets. 
• The Binance news never stops, news out this week that 3 senior executives have left the company and that the Australian offices were searched by ASIC.

With that said, we’ll continue to dive deeper onto other macro economic news and developments from around the globe.

Starting off with global news 

In a significant bet on the long term demand for petrochemicals, companies are ramping up their exploration and mining activity.

🌎 Macro news TLDR: China’s problems persist.

U.S. economic news

The US job market looks like it has finally turned, despite the ADP jobs report showing a net gain, non-farm payrolls are trending down nicely.

The US manufacturing ISM report for June showed a continuation of the contraction we have seen with it coming in at 46.

Federal Reserve officials opted to pause any rate hikes in June. However, they are almost unanimous in their view that more rate hikes are likely in the future. 

Meanwhile, in Europe

Europe Block PMI slipped slightly into contraction for June, hitting 49.9. Services PMI was marginally better at 51. 

Business investment in the UK has fallen dramatically since the Brexit vote, with many businesses opting to move operations to mainland Europe. The long term implications of this will be quite drastic to the UK economy.

The Ukraine conflict passed its 500th day with no resolution in sight. Nato is convening this week with Ukraine looking for more support from the block. 

And in Asiapac…

In China, the Caxin PMI data for June showed a continued softening in the manufacturing sector. Coming in at 50.5, the signs aren’t great.

Supporting this, China’s producer prices and CPI were both lower than expected. Commentators are now saying they are very close to actual deflation.

TLDR – the door is now well and truly open for more central bank stimulus.

Finally, China’s response to the US chip crackdown has been to limit exports of rare earth minerals essential in the manufacturing of semiconductors. 

India’s manufacturing PMI posted a healthy 57.8 in June, down slightly from May. New orders were up, so markets weren’t worried about that. 

Inflation appears to be cooling with both South Korea and Indonesia posting good declines in CPI. Taiwan’s exports continue to disappoint, down 23.4% on a year ago. 

Australia’s RBA surprised markets again, this time with a rate pause as they opted to hold the cash rate at 4.1%.

As reported above, both China and Europe economies appear to be slowing, this is impacting New Zealand export prices due to slower demand. 

As a result New Zealand’s current account deficit continues to cause concern. In simple terms, as a nation we are buying more than we are selling and we are filling the gap by borrowing which isn’t sustainable long term. 

Corelogic reports that house prices continue to fall in June, down another 1.2%. Stats NZ report ath. Immigration to NZ continues to soar which is good for employers and potentially wage growth.

Finally, after 20 months of rate rises, today the RBNZ held the official cash rate rate steady at 5.5%. Given the wider economic conditions in New Zealand, this pause was widely expected.

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

Stay tuned for the next update.

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