Weekly Market Update: Finding Out

It looks like we, the collective we, are in the ‘find out’ stage of what happens next. We’re definitely finding out what happens to asset prices when you dilute liquidity chasing memes.

Those into memes are finding out that only a very few win in that casino. And now the US and the world is going to find out what happens to inflation and economies when you upend global trade with tariffs. 

In crypto news, memecoins have dominated. Unfortunately, not for good reasons; Argentinian President Millie supported a token that got rugged, research is showing how much Alts and Memes have come off since the December highs, all that attention and cash chasing quick wins is affecting the majors and… well, you may be better off playing roulette than flipping alts / memecoins. 

In more buoyant crypto news. Crypto.com is now allowed to play in Europe, Coinbase and Robinhood both had stellar results all due to crypto, Abu Dhabi sovereign wealth fund bought some BTC ETFs and the person now in charge of the US currency is a former Bitcoin miner. 

The Macro economic space is reeling as the Trump administration is kind of upending the established world order both economically and in terms of security. Essentially the old rules don’t apply. For Europe, in particular, this is drastic and they are finding out who the big dog is. 

In the US, inflation is up as many feared. And the future outlook for inflation looks hotter than many would like. ‘Wait and see’ is moving into the ‘find out’ phase, real quick. 

Europe has had a gasp moment. The US just told it to pay up on security and move beyond talk and truly sanction Russia. It is likely they will respond to any tariffs imposed by the US. Remember Germany has an election this weekend too. 

Turning to APAC; China’s property sector continues to decay. Meanwhile India’s CPI declined and they look likely to get ahead of most countries on tariffs. Over in Japan, their economy appears to be humming along nicely. 

Moving to Australia (pun intended) there was almost universal expectation of a 25 bps rate cut and that was what the RBA delivered. 

In New Zealand, services and manufacturing both moved into expansion and immigration is now running at record lows.

What a difference a year makes. The big news was the RBNZ decision to cut rates 50bps. This was widely expected. Interestingly the future guidance painted a more conservative path. Global trade wars apparently give central bankers less confidence in their models. 

It has been a relatively flat week on week, with the Market showing slightly dipping towards fear this week.

Highlights this week: 

• Similar to last week, ⅔ of the top 30 assets lost some ground and any asset gains were mostly in the low single digits. 
• This week there was a small skew toward the buy side by order value, however a majority of orders were buy side by count. Indicating a trend to larger value sell orders.
• BTC, ETH, XRP and SOL were particularly popular with our buyers, while USDC was being sold at elevated levels. 
• At the time of writing BTC was down 2%, while SOL was down 17%. ETH, and BNB eked out a 1% gain while XRP performed relatively strongly to be up 5%. 
• Proton (XPR) is our best performer this week, up 36%. While MKR was the best performing major coin up 13%. 
• Solana (SOL) was our worst performer, down 17% .

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

Highlights from the crypto space

Bitfinex Alpha research states what we all know, BTC has been consolidating now for 81 days and has declined in volatility.

The good news (according to them) is that at 90 days we normally see a “decisive breakout”, the bad news is that some indicators have turned bearish. 

Robinhood’s bet on crypto is paying, big time. It was ⅓ of their total revenue. 

This week in memecoin news is a complete downer. We make no judgment just reporting the work of others.

TLDR: memecoins appear to be bad for the top 30 assets, everyone who buys them and even Argentinian Presidents. 

Argentinian President Milie pushed a memecoin online, then withdrew the post after the project was rugged and some really dodgy stuff appears to have happened. 

Altcoin and Memecoin indices are down 50% from their December peaks. People are attributing this to the downturn in retail trader mood. 

There were 600,000 (not a typo), token launches in January, most in memecoins. This is up 12x from last year and being flagged as a sector headwind as investor attention (and money) is fragmented and not driving the cycle as was expected. 

Analysis shows you have a better return on investment playing roulette than flipping low cap Altcoins (called ‘shitcoins’ below). This gets worse when you factor costs.

Other notable highlights from the crypto space:

• The person chosen to control the US currency, used to work for a bitcoin miner. 
• Franklin Templeton has expanded its tokenised Money Market Fund to Solana.
• Crypto.com is now fully MiCA compliant and able to run in all of the EU.
• Coinbase had a belter in Q4 according to their results, revenue doubled and net profit was up 27x. In response COIN was down 6%. Markets are weird. 
• Abu Dhabi Sovereign Wealth Fund steps into Bitcoin with a $436M ETF investment. Filings say they aren’t alone. 
• The core Devs on Ethereum have agreed to speed up delivery. 

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🌎 Macro news TLDR: …Turmoil…

How big a deal could the reciprocal tariffs be?

Well quite large and it will affect the globe. Global leaders are already saying this won’t be a good news story for everyday Americans. We are about to find out (as in ‘ eff around and find out’ ), as President Trump signed the reciprocal tariffs into law. 

Europe, and the global order, is in turmoil after the US appears to be brokering a deal to end the Ukraine war without consulting them. 

Rabobank’s pieces on geopolitics and the ramifications are …startling to read.

U.S. economic news

 “ Something something, tariffs something something inflation “.

US CPI for January came in hotter than expected with headline inflation increasing 0.1% to 3% and core Inflation popping to 3.3%.

The wait and see approach by the Fed, coupled with the feared inflationary impact of the Tariffs, have markets on edge about future rate cuts. US producer prices were also up. That’s not good for inflation. 

Home affordability in the US has become a real problem, unsurprisingly home sales are way down. 

Over in Europe….

Wage growth in the UK is outpacing inflation at 6.2%. 

European industrial output came in at -2%, which was better than the -3.% expected. Yep, that bad. 

The EU has called the US tariffs unjust and will respond. Aka a trade war. 

Meanwhile, the US has sent the EU a bunch of questions about Ukraine, and importantly about how they will actually place sanctions on Russia, not the current lip service model. The US is also demanding Europe up its own security spend and resources. Europe appears to be entering the ‘find out’ phase. 

There are peace talks happening around Ukraine, however as boundaries are likely to freeze at the point of the agreement, it’s all on for territory. 

And in Asia Pacific…

In China, kicking the can on fixing their property sector hasn’t worked, Bloomberg reports it’s moving into full blown liquidation phase now. More finding out by the looks of things.

India’s industrial production fell quite sharply in December, CPI also fell to 4.3%, both supporting the case for the central bank to move to stimulus mode.

India also got the first mover advantage and looks to clinch a trade agreement to avoid tariffs. Looks like they wont be buying cheap Russian oil for long. 

Singapore’s economy grew 4.4%, above expectations, however January’s exports were well down. Japan’s Q4 GDP was up 0.7% on Q3, showing robust health. 

Australia’s RBA delivered the widely expected 25 bps rate cut taking their OCR to 4.10%. They delivered the usual messaging that inflation isn’t beaten but it is moderating. 

New Zealand has been in the find out phase for a while. This week’s news, food prices were up sharply in January driven mainly by dairy products. The Reserve Bank announced, as expected, a 50bps cut to the OCR moving from 4.25% to 3.75%. Retail banks moved quickly to adjust home loans and some other rates.

BusinessNZ PMI showed manufacturing hit expansion for the first time in 23 months, up significantly to 51.4. Services (PSI) also ticked into expansion. Immigration continues to decline from the heady Covid days. Migrant departures are now at record levels with most moving to Australia. 

That’s a wrap for this week!

Stay tuned for the next update

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