Weekly Market Update: Divergent

It seems retail investors’ mood and take on the world is very divergent from institutions. Turns out institutions avoided both the Altcoin and memecoin frenzy so are probably feeling much better about life. Either way it could explain the lack of robust action in the market.

Another week, another raft of US announcements. The Crypto Tzar announced they were looking into stuff which disappointed a market expecting some real action. The SEC has launched its crypto task force, more US states are proposing Bitcoin as a reserve asset and someone is saying the tariff wars won’t stop the bull. 🤞

In other crypto news, a blockchain sleuth thinks that Satoshi may have been KYC’d, Van Eck put out a 2025 SOL price target, ETF flows were positive and there is record short position on ETH at the minute. ETH is back to being inflationary due to blobs and the Czech republic scrapped capital gains on BTC held longer than 3 years. Pojďme!

Macro economic news continues to be dominated by tariffs, not really a surprise given the wins the Trump administration got from Canada and Mexico. Other noteworthy data points were the continued decline in shipping rates and how Africa is stepping up to help countries with falling populations. 

In the US, they have a CPI announcement Thursday so relatively quiet on the news front. Their Jobs market was a little softer than expected and in a’ watch this space’ move, the Fed policy report said bank liquidity is getting low which could force the Fed to move from QT to QE. This would also devalue the dollar which will make Trump happy. What’s not making him happy is a Fed saying it’s in no hurry to cut rates. 

Looking at Europe, Germany’s economy is going to play a big part in their upcoming election while the BoE cut rates as expected as the cost of living crisis starts to bite. 

Turning to APAC; India’s central bank ignored its persistent inflation and cut rates in an attempt to goose GDP growth. In China, annual inflation was very low, but not as low as their marriage rate. Their population declines and demographics are mind boggling. 

Finally, Australia posted a smaller than expected trade surplus. Must be tough. There are growing calls on the RBA to cut rates, however those looking through the data are suggesting the top line numbers are a mirage. Interesting times!

In New Zealand, the forecast dairy payout is looking to be a good one this season, which will come as a relief to the sector and the regions. 

Market sentiment has fallen significantly in the last week and now sits at neutral, leaning slightly to fear.

Highlights this week: 

• Roughly 80% of the top 30 assets are down week on week, with most losses in the single digit range. 
• There were a few noticeable outliers who bucked the trend to post good gains. LTC in particular. 
• In a continuation of last week, most of the volume this week was on the buy side.
• BTC and ETH were particularly popular with our buyers, while XRP and SOL were being sold at elevated levels. 
• At the time of writing BTC was down 4% for the week. ETH, SOL, and XRP were all down 7%. BNB was one of the outliers, up 9%. 
• Nano (XNO) is our best performer this week, up 44%. While LTC was the best performing major coin up 17% 
• Athena (ENA) was our worst performer, down 30% 

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

Highlights from the crypto space

Bitwise are saying that while retail investors are cold on crypto, institutional investors are incredibly bullish. The blame is being placed on the pasting Alt and memecoin have had. People aren’t feeling rich. 

Unsurprisingly, the memecoin market has gotten darker, the odds are definitely with the issuers not the punters according to some. 

Someone is digging into Satoshi’s wallets and found that Kraken bought a BTC exchange that he once used. This opens the possibility that ‘they’ can be identified. 

CoinTelegraph is asking the obvious question, will the Trump tariffs kill the bull run? TLDR, no! Still worth a read just for the graphs.

David Sacks, the newly anointed US “Crypto Tzar”, spoke. A lot. It was a bit of a talk fest but the directionality looks good. 

The SEC has officially launched its crypto task force to provide regulatory clarity. Commissioner Hester Peirce wrote a blog on it, “it took us a long time to get into this mess, and it is going to take us some time to get out of it.”

The US may be waking up to the fact that US denominated stablecoins are actually a good thing for maintaining global USD dominance. [prepare for mini rant] We are always a little baffled by how crypto has so readily accepted the USD as its de facto currency. 

16 US states have now put forward legislation to make BTC a reserve asset. 

Van Eck price target for Solana this run is $520. -> 160%. 

There is a massive short position being established on ETH right now. Milk Road thinks it’s a short squeeze to enable institutions to get ETH on the cheap. 

This week in ETF news. BlackRock is launching a BTC Exchange Traded Product (ETP) into Europe, I think ETP and ETF are the same?

Trump Media has registered trademarks for some ETFs and finally, the SOL ETF application has a timeline for approval for Q4 this year. BTC inflows were $200m this week. 

Ethereum supply has returned to pre merge levels as the impact of the Layer 2 and blobs has meant the Layer 1 is now inflationary. Feels like a bit of an own goal to this reader. 

Lido, the largest restaker on Ethereum, is rolling out V3 of its smart contracts which will apparently be good for institutional adoption. 

Other Crypto news

• Crossmint has released (AI) Agent wallets which will allow them to interact onchain compliantly…and autonomously. 
• The Czech republic scrapped capital gains tax on BTC holdings over 3 years old. 
• Swedish BNPL provider, Klarna, is finally embracing crypto for its 85m users.
• The NZ Minister of Commerce, Andrew Bayly, has come out strongly in favour of crypto, saying New Zealand should take a commercial approach and embrace it
• A computer engineer who lost £620m worth of Bitcoin wants to buy the tip where he believes it was buried 
• In the big news, MicroStrategy is now called… Strategy 😒 . 
• Blackrock now owns 5% of Strategy (Microstrategy). 

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🌎 Macro news TLDR: …Tarrifs again…

This week in Tariff talk, President Trump announced that the US will be enacting reciprocal tariffs against all nations to ‘even’ things out. He then imposed 25% tariffs on Steel and Aluminium. 

Africa is now planning to export people to fill the population declines in mature countries. I wonder how this will collide with the rise in nationalism? 

Containerised shipping rates continue to drift downwards. 

U.S. economic news

The ISM services survey expanded slower than expected and initial jobless claims were higher than expected. 

The Federal Reserve released its Monetary Policy Report. One key item they mention is reducing bank liquidity. The upshot of that is higher rates and eventually this will force the Fed to act, and that means quantitative easing (money printer goes brrrrrr!!)…

The reverse repo is nearly drained. This should lead to a weaker US dollar which President Trump wants. On the other hand Fed Chairman Powell reiterated that they aren’t in a hurry. 

US companies can now bribe overseas officials just like all other nations. Seriously not kidding. 

Over in Europe….

The BoE cut rates 25 bps to 4.5% which was inline with expectations. Low income families are struggling with the cost of living it seems. 

Germans are increasingly concerned about the economy, with the election about a week away this could be a big deal. 

And in Asia Pacific…

India’s central bank cut rates for the first time in 5 years, despite inflation running hotter than most nations. China’s inflation for January was 0.5% annualised, that is…marginal at best. On the demographic front, marriages in China fell 20% last year. 

Australia posted a smaller than expected Trade Surplus for December. The RBA is under pressure to cut rates, but there are dissenting voices. Consumer sentiment is flat while business sentiment is improving. 

In the most NZ of news, Westpac are predicting a farmgate payout over $10 per kg this year. The weak dollar is actually helping.

That’s a wrap for this week!

Stay tuned for the next update

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