Weekly Market Update: It’s all about institutional activity

This week was tracking along nicely, with Bitcoin closing its up for its 8th straight week, however a short, sharp correction led by overleveraged positions appears to have caused the fall in prices over the last couple of days. 

In crypto news, most of the stories are dominated by institutional moves. Capital inflows are increasing, players are securing licences in key jurisdictions and banks are launching products into the space.

The notable wet blankets are Jamie Dixon from JP Morgan and some US senators who continue to allege crypto is used extensively to fund terrorism. 

In global news, oil prices continue to fall causing OPEC+ to further reduce supply. Somewhat related, the COP28 climate talks aren’t going particularly well. 

In the US, their labour market looks like it is finally softening, supporting this is a [ blah blah on their CPI data front. In short they look like they have pulled off the soft landing. On the other side of the Atlantic, Europe’s inflation is rapidly retreating and economic powerhouse Germany continues to put out weak manufacturing data. 

In Asia, China and Japan both put out weak GDP numbers with China now having 2 straight months of deflation. India continues to shine, however their central bank is ramping up its fight against inflation.

In Australia, they put out lacklustre growth by their standards, while in NZ we continue to import more than we export. 

The crypto market sentiment has shaken last week’s withdrawal and is the furthest in to greed territory we’ve seen in a while. 

Highlights this week: 

• Domestically, our buy-sell ratio again is constantly and comfortable favouring buys in number of orders but also volume. OTC again continues this pattern with volumes moving upwards with the top picks being BTC and USDT.
• This week saw a return of bullish momentum in the top 30 assets with ~70% posting gains, most in the 3-7% range.
• At the time of writing BTC and ETH were both down 5%. While AVAX had a great week up 55%, ADA had a good run too, up 37%.
• IOTA (IOTA) was our top performing asset this week, up 163%. 
• Our biggest loser this week was Waltonchain (WTC) down 20%. 

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

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Highlights from the crypto space

If you wanted more evidence that we are back, Bloomberg put out an Op Ed stating that even sceptical investors should have a small allocation of Bitcoin. 

Right on queue, Charlie Bilello posted his weekly snapshot of asset performance this year. You do you. 

In ETF news, it looks like the key dates for a decision on the BTC spot ETF fall between January 8-10. Gear up campers. The SEC also delayed the Greyscales ETH Futures ETF decision. 

Bitcoin is now the 9th most valuable asset in the world, overtaking Meta (Facebook). 

The rapid pull back in prices is being attributed to leveraged positions. Analysts have pointed to the Bitcoin funding rate that spiked on Sunday indicating the market was out of sync, this caused a selling cascade. The result, over $500m in liquidations. 

Kaiko reports that the recent surge in BTC pricing has led to an increase in the average trade size. 

A US judge has given the SEC a slap over the knuckles for making false and misleading claims in its case against crypto provider Debt Box.

Crypto.com has secured a licence from the UK FCA regulator to operate and expand its product offerings.

Institutional inflows to crypto assets have now had 10 straight weeks of positive growth, most of that growth is in BTC. 

Other notable highights from the crypto space:

• Brazil bank Itau Unibanco launched crypto trading, citing clear demand from its users. While Circle has partnered with Nubank to increase digital dollar access for Brazillians. 
• Coinbase wallet users can now send crypto via links in social media apps like Whatsapp. Cool feature but an obvious attack vector for scammers. Be careful out there people. 
• Societe Generale has launched a Euro pegged stablecoin, making it the first regulated bank to get a stablecoin onto an exchange. 
• Robinhood has expanded crypto trading to the EU. 
• El Salvador’s BTC bet is now back in the black, like many out there who bought in 2021, El Salvador has had a wild (by tradfi standards – normal by crypto) ride. 
• JP Morgan’s CEO Jamie Dixon is less than a crypto bull, saying if he was the government, he’d shut crypto down…which just goes to show how little he understands. 
• Senator Elizabeth Warren has introduced a bill that addresses her concerns about the alleged use of Crypto in terrorism financing. 
• Someone has delved into the tracking code of Ledger Live, and, well it’s quite extensive. 

And that sums up the major updates from around the crypto space. Moving on..

What is going on in the world of Finance … 

OPEC+ is ramping up its rhetoric (and possibly pressure) on its member states to reduce Oil production as prices slide on slower global growth. That’s why it’s called a Cartel I guess. 

🌎 Macro news TLDR: …Holiday break 

U.S. economic news

The much watched JOLTS results for October came in well below estimates and is being taken as a sign that the labour market is starting to cool off. This picture is supported by the ADP payroll report which also came in softer. 

US Wage growth is also tapering off, with November’s number showing a 4% annual increase. Confusingly, Non-Farm payrolls came in higher than expected at 199k. As a result, consumer sentiment is up. 

On Thursday NZ time, the Fed will announce any change to its funds rate, markets are betting that it is a near certainty (98%) to remain unchanged. 

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Meanwhile in Europe….

The ‘remarkable’ fall in inflation means the ECB can take further rate hikes off the table according to one member of their committee.

German industrial orders unexpectedly fell by 3.7% in October, this points to a continuation of their economic downturn going into winter.

German consumer or household debt is creeping up for the first time since 2019 due to cost of living pressures.

And in Asia Pacific…

Ratings agency Moody’s has downgraded its outlook on China to negative due to concerns over local government debt and the nation’s struggling property sector. 

China did get some positive news, with their exports growing in November. However, they are now officially in deflation, with their CPI falling 0.5% in November, adding to the 0.2% drop in October. 

India’s central bank held rates steady at 6.5%, but struck a very hawkish tone. Japan’s GDP contracted more than originally estimated in Q3, combining in a -2.9% annualised driven by failing consumer and business spending. As a result, Japan’s central bank sees no need to change its interest rate settings

Australia’s Q3 GDP grew 0.2%, which was less than expected and well down on Q2’s 0.4%.

In NZ news, the latest Global Dairy Trade auction showed a 2% increase in prices, giving some respite to the previous week’s falls. 

Foodstuffs are reporting that food inflation is 4.8% annualised, the first sub 5% reading in over 18 months. However, our terms of trade for the September quarter declined again.

New Zealand posted another record annual migration number of 129 000 in October, surpassing Septerbers record of 119 000. 

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

Stay tuned for the next update.

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