Weekly Market Update: ETFs Approved

Happy New Year everyone… fingers crossed for a happy and successful 2024 to you all.

This week’s news update is slightly shorter as we get back into the rhythm of the news cycle.

Unless you have been out of network coverage, you would know that the spot BTC ETFs were approved by the SEC with most going live almost immediately. As these were much hyped and anticipated in the crypto space, day 1 volumes broke volume records ($4.6bn), although there are some saying that this was people escaping from the GBTC lock in. All in all we should be happy with the results. Net inflows means more cash into the ecosystem and more BTC demand. Win, win. 

In other (major) crypto news, Circle announced it is filing for an IPO. They seem committed to being a compliant stablecoin, and given the growing institutional adoption and Coinbase’ success in the ETF custodian space, this might play. Time will tell.

In global economic news, the middle east is still clearly a risk area for oil and exports. If you look at where we are now, compared to the isolated Gaza conflict of October, it’s clear that the conflict is spreading. 

In the US, CPI was higher than forecast for December. Europe’s economy is still weak with the UK on the verge of a recession and Germany continuing to struggle.

In Asia, China’s export sector picked up but they posted their 3rd month of negative CPI. Deflation worries continue. The other Asian powerhouse India posted slower industrial growth than previous months. 

Locally, Australia posted a healthy current account surplus. Their November CPI was down on October’s result to 4.3%. In New Zealand it looks like the consumer tightened their belts with Retailers reporting sluggish Christmas sales. 

The Crypto market sentiment has remained consistent over the holiday period and we continue to hold steady in greed territory.

Highlights this week: 

• It seems crypto is back in favour with volumes up and the buy:sell ratio heavily skewed toward the buy side.  
• In the last week, the major Alt coins have generally trended towards price gains.  It seems the age-old rotation from BTC to Alts is underway. 
• Reflecting on the last month shows that despite the surges BTC is up 3%, whilst ETH is up 15%.  
• At the time of writing BTC was down 8% while ETH was up 13%.  
• Ethereum Classic (ETC) was our biggest gainer this week up 33%
• Our biggest loser this week was Stacks (STX) down 13%. 
• On the month, Arbitrum (ARB) was our top gainer up 90% while THORChain (RUNE) lost the most, down 18%.

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

Highlights from the crypto space

Really the biggest news item was the approval and rapid launch of the Bitcoin ETFs. Tradfi seemed surprised by how fast it all happened with many funds not yet having approval whilst Vanguard was actively blocking their clients from access to them. 

Having said that, the BTC spot ETF’s broke the day 1 volume records. Blockworks has an ETF tracker so you can see who the winners are.

Circle, the issuer of USDC and EURC, has filed to go public via an IPO. 

The Ripple – SEC case rumbles on and looks like it’s at an impasse. 

Another year another Bridge hack, this time Korean Orbit was hacked. Apparently the hacker got 7 or 10 multisigners…that just screams shonky security. 

The CEO of Blackrock talks about tokenisation… like wow. He doubled down and said an Ether ETF made sense too. 

What is going on in the world of Finance … 

Oil prices continue to trend up due to the impact of the Houthi rebels and the growing regional uncertainty.

The World Economic Forum is predicting a challenging year ahead, but it looks like APAC might do better than most. 

🌎 Macro news TLDR: The Fed blinked, the ECB held the line.

U.S. economic news

US CPI for December was a bit of a wake up call for the markets who had already popped the corks and were planning on rate cuts by March. 

December’s numbers were 0.3 % up for the month against a forecast of 0.2%. At 3.4% annualised it’s still too high for the Fed. Core CPI was also up and is running at 3.9%.

Meanwhile in Europe….

The UK’s economy grew in November by more than expected, however they are still at risk of going into a recession if December’s numbers aren’t equally as strong. 

Europe still looks soft and industrial powerhouse Germany continues to struggle with industrial production falling in November, and GDP contracting 0.3% for 2023. 

And in Asia Pacific…

In China, exports were up, posting 2.3% growth in the year to December. CPI remains sluggish with December being the 3rd straight month of negative CPI. 

That hasn’t happened since 1999. Market’s were expecting the PBOC to respond with rate cuts, however they held their rate at 2.5% in an attempt to prop up the Renminbi. 

Elsewhere, India’s industrial production has slowed, Japan posted a trade surplus. Australia also posted a trade surplus at A$11.4bn. Staying in Australia, CPI was down to 4.3% in November, a healthy decline from October’s 4.9%.

That’s a wrap for this week. Hope you had a great holiday and are ready for 2024. 

Stay tuned for the next update.

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