Weekly Market Update: ETF Wave Rolls On

This week, the crypto market continues its positive price momentum with clear signs that Altcoins are back in flavour. Previous cycles have followed a pattern of BTC leading price, ETH then catching up and finally the Alts rip. Things currently look fairly similar with ETH catching up over the last week. 

No surprise then that the crypto narrative has flipped into bull mode with all sorts of price predictions and guidance on how to make the most out of this run. This is a rinse repeat for some influencers so please do your own research and have your own plan. 

BTC is holding its position as this year’s best performing ‘mainstream’ asset. We have also seen a continuation of the ETF hype, this time spilling into ETH which must have played a part in this week’s price moves.

Sadly, we have seen reports of 3 exchanges suffering hacks this week alone. This is why we believe in you holding your own crypto in a wallet. 

Globally, the slower economic growth prospects are weighing on oil prices which is helping inflation just about everywhere.

While the tragic events unfolding in Israel and Ukraine continue, at this time they appear to not be escalating or impacting markets greatly.

In the US [CPI CHAT] and the government shutdown brinkmanship continues. Europe is clearly struggling with signs both the consumer and business sectors are slowing down.

In Asia, China moved into deflation as exports continue to fall, while India continues to post growth, albeit slower.

In Australia, the RBA has admitted that its efforts to tame inflation haven’t gotten the results they want and in New Zealand unemployment is up while manufacturing and services output is down. 

Crypto market sentiment has had another stable week with only a slight increase being reported week on week seeing us remaining in greed territory. 

Highlights this week: 

• On the Easy Crypto platform, the big price moves in November mean we have had the highest ratio of buying to selling in 2 years. Game on!
• Another solid week of price action for the majors, however we do see some evidence of profit taking with some falling in price. 
• At the time of writing BTC was up 1.5%, while ETH outperformed, up another 5%.
• THORChain (RUNE) led the way this week, up 45%. Avalanche (AVAX) also ripped, up 31%. 
• Our biggest loser this week was TrustWallet (TWT) which gave up a lot of last week’s  gains due to Binance launching its new wallet, it was down 35%.

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

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Highlights from the crypto space

Charlie Bilello put out his monthly snapshot of asset performance. #Bitcoin baby!

This week in ETF news:

• Bloomberg analysts have reiterated their belief that there is a 90% chance the Bitcoin Spot ETF will be approved by January 10. 
• Following their court win, the SEC has reportedly started discussions with Greyscale about how their ETF will work. 
• Some recent research indicates that the Bitcoin ETF is NOT priced in..oh boy. 
• BlackRock thinks the ETH ETF situation is nearly identical to the BTC one, and is preparing a Spot Ethereum ETF filing. 
• XRP token surged, then tanked on fake BlackRock XRP ETF news. BlackRock confirmed they didn’t submit it. Stay alert folks!
• UBS in Hong Kong is offering its wealthy clients access to 3 futures ETFs. 

Bitcoin appears to be following the same pattern as previous halving cycles.

Institutions have noticed with Bytetree, a firm that tracks ETFs and funds, calling an all time high on Bitcoins held in management at 863,434. 

Staked ETH is now 2x the amount held on centralised exchanges. Should ETH run, this could create volatility due to the low supply volumes.

Binance has brought back high interest rates on USDT earn, you get 13% APR on the first $500 and then drop to 6%. Feels like a return to 2021 days – DYOR. Binance has also been teasing how the next billion people will join their movement, in response they launched a Web3 Wallet. 

The SEC is struggling to recruit crypto experts because a job requirement is you have to sell your crypto.

Other notable highlights from around the crypto space:

• USDC issuer Circle, is rumoured to be considering an IPO in 2024. 
• Coinbase has added Know your Customer (KYC) to Base.
• Local player, Immserv just recorded the world’s first decentralised / on-chain contactless/ retail payment. 
• The OECD reports that 48 Countries have signed up for data sharing agreement on crypto asset reporting (CARF). New Zealand is not on the list of signatories. 
• The Near Foundation has been busy, they have launched a web 3 identity product and a ‘data availability’ product which helps blockchains scale by making data storage more efficient – I think. 
• Korean Telco SK Telecom, is partnering with Aptos to launch a web 3 Wallet to drive crypto and NFT adoption. 
• Australian exchange Coinspot appears to have been hacked. A few days later Poloniex reported a $100m hack. Finally, a wallet apparently linked to Binance lost $27m in Stablecoins. We cannot emphasise this enough – Store your crypto in your own wallet people, not your keys, not your coins. 
• There is a proposed bill in the US aiming to ban US government officials from using Chinese blockchain technology. It explicitly states their intent to ban USDT parent, iFinex.
• A federal Judge in New York has approved the Celsius network payment plan. It’s now with the SEC. 
• The CEO of Roblox said that they will eventually get to NFT’s, given there are a billion Roblox accounts that could be a big deal. 

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 … 

The weak growth data from the US and China sent oil prices to a 3 month low of under US$80 a barrel. 

Globally, container shipping prices are beginning to drift up which is a signal of growing global trade. 

🌎 Macro news TLDR: Oil eases on weaker global growth

U.S. economic news

The threat of a Government shutdown still lingers with Friday being this week’s deadline. At this stage they’re not close to a deal.

Moody’s has downgraded its outlook on the US Government to ‘negative’ because of concerns about the country’s fiscal strength. Retail sales fell 0.8% in October.

Speaking at the IMF summit, Fed chairman Powell was quite hawkish, stating that the committee is “not confident it has done enough” to curb inflation. 

However October’s CPI reading was better than forecast with a flat month on month inflation reading and lower than forecast core inflation at 4% annualised or 0.2% per month. The forecast was for 3.3% and 4.1% respectively. In response, the market is pricing in 100 bps of rate cuts in 2024 and equities rose 2%.  Crypto didn’t,  it’s decorrelated and you can’t have it both ways.

Meanwhile in Europe….

Euro area retail sales for September were down again, overall these are 2.7% lower than a year ago. 

The German industrial complex continues to struggle, production was down 1.4% in September and 3.4% on a year ago. 

Britain’s economy stagnated in the July to September quarter, recording zero growth.

And in Asia Pacific…

Some very mixed signals from China. The IMF has upgraded China’s 2023 GDP forecasts to 5.4% citing a “strong” post covid recovery. 2024 is forecast to be weaker at 4.6%.

Chinese imports rose 3%, however exports were down 6.4% year on year. On top of all this they have slipped into deflation in October with CPI being down 0.2% on last year. 

India’s industrial production was up 5.8% on last year. While this is a solid result, it is down from August astronomical 14%. India’s CPI eased down to 4.87%, its lowest in 4 months. 

In a dire warning of what is coming, Australia’s October rainfall was down 65% on the average. Farming is on the ropes and fire season will be bad. The RBA’s minutes from its policy meeting say they have made less progress on inflation than forecast and (you guessed it) higher for longer.

In NZ, after 2 months of gains, Global Dairy prices fell ~ 1%. In employment news, things continue to soften with Job ads in October down 5% from September, and down 29% from last year. 

Our Manufacturing PMI fell to 42.5 in October, the 5th straight fall while our Services PMI also fell to 48.9. Clearly we are in contraction. Some good news though with Statistics NZ reporting our second month of declines in food pricing, they are down 1% on the month, but still running at 6.3% annualised. 

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

Stay tuned for the next update.

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