Weekly Market Update: Market Holds Despite Sell Pressure

In crypto news, we seem to have moved beyond the ETF hype impact which we take as a healthy sign. Notable events this week include the Jupiter airdrop on Solana which went well, although Solana did succumb to an outage late this week. 

There is also a recurring pattern of companies that were bankrupted by the FTX fraud announcing the sale or proposed sale of their clients’ assets. While this is good for those affected, it does mean a lot of sell pressure on the market. Interestingly prices seem resilient to the news. 

In other notable crypto talking points; Ethereum Dencun upgrade is progressing, Tether put out its latest attestation and Ripple hit the news a couple of times, firstly on news that Chris Larson was hacked and then when the SEC won a minor point in its court case. 

In global news, Middle East tensions remain elevated as the US and UK take on militant groups. However, shipping costs look like they have peaked. 

The big talking point this week in finance was the FOMC minutes. They have effectively hosed any chance of a March rate cut and are still talking tough. The US job market seems to be the hold out with wages up and unemployment low. 

In Europe, CPI is trending down into the magical 2% band in some of their larger economies. The Bank of England held rates steady and the EU forced through a Ukrainian aid package. 

In Asia, China had a bad week in its share market. The market desperately wants the PBOC to start stimulus but they appear to be holding out for the US Fed to blink first to protect the Yuan. 

In Australia their PMI’s are improving, the housing market looks a bit sad and the RBA not only held rates, but said the possibility of rises still exists. 

In New Zealand interest rates are biting with mortgage distress levels up. Building consents were way down on an annual basis, and dairy farmers got more relief with an improvement in prices at the latest global dairy auction. Finally there was a small up-tick in unemployment, with us now at 4%. 

The crypto market sentiment has improved slightly this week as we remain in greed territory. 

Highlights this week: 

• This week we saw a mixed bag of performance from the top 30 assets
• At the time of writing BTC and ETH were both flat for the week while BNB was down 3% and SOL down 8%
• Chainlink (LINK) was our best performing asset this week, up 19% 
• Monero (XMR) tanked on news that Binance was delisting it, down 35%. 

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

Highlights from the crypto space

Standard Chartered Bank is predicting the spot ETH ETF will be approved by the SEC in May. 

European Exchange Traded Products (ETP) pricing has reacted strongly to the launch of the US based ETFs.

Web 3 payments provider, Transak, has partnered with Visa to enable more real time payments

Rekt Capital keeps pointing out how this halving is aligning with previous cycles. 

Ripple founder Chris Larsen was apparently hacked for $122m XRP. There is some noise around this being Ripple itself but, who knows. 

Binance was rumoured to have had a security incident with some of its KYC data leaked on Github but they quickly dispelled that. Then came news that they are delisting Monero. 

Solana had a major network outage, with the network requiring a restart 

Solana DEX Jupiter did one of the largest airdrops we’ve ever seen, given the scale of it it all went pretty well.

Hat tip to former Easycrypto-er Charlie Kavanagh who runs the local airdrop community if you want to get into that space. Previous airdrops like Aptos, OP and Blur have all followed a similar pattern… just saying.

There is some hope for those affected by the FTX debacle as they are looking to repay all of their customers in full. And 3 people have been charged with the $400m hack of FTX, apparently a simple SIM swap…wow, just wow. 

Staying with FTX, Multicoin Capital is looking to sell its $100m claim on FTX. In lockstep, Celsius is planning to emerge from Bankruptcy and pay out $3bn to creditors, apparently they will get a significant haircut though.

Finally, Genesis is seeking approval to sell $1.6bn in assets from its bankrupt trust. All in all that is a lot of sell pressure on the market. 

The next upgrade of Ethereum, Dencun is successfully rolling through the testnets. 

Tether’s latest attestation is out, high interest rates aren’t hurting them that is for sure. 

In the Ripple SEC court case, the SEC got a small win in forcing Ripple to turn over its financials which will be used to size up penalties. 

What is going on in the world of Finance … 

Some small relief in the global shipping costs with container pricing coming back 4% despite no real resolution in the red sea situation.

🌎 Macro news TLDR: …PMI’s are showing gains across the globe

U.S. economic news

As expected the FOMC held rates in its latest monetary policy statement. The keenly watched factor was the tone, which was slightly more hawkish than expected, with the committee avoiding any mention of future rate cuts until they have “ greater confidence inflation is tamed”. Any mention of future rate rises was removed from the statement though. 

Interestingly the FOMC deleted the line about the US banking system “ being sound and resilient”. On the job front, the conundrum continues with a Non-Farm payrolls at nearly 2x expectations. 

One noticeable fall this week has been in the regional banks as one struggled due to its commercial real estate exposure. 

Bloomberg is reporting that all banks have massive exposure there and the clock is ticking. TLDR; not good. 

Meanwhile in Europe….

France and Germany both put out promising CPI numbers with inflation trending down. The Eurozone also posted decent numbers with Flash CPI coming out at 2.8%, that is within the band and calls for rate cuts will grow louder. 

The Bank of England held its OCR at 5.25%, but opened the possibility of rate cuts this year. Interestingly, some members voted for hikes while others were voting for cuts. 

The EU forced through a $50bn Ukrainian aid package, the hold out Hungary, was given little choice in the end. 

And in Asia Pacific…

The IMF has forecast that China’s growth will continue to slow, calling for a 4.6% GDP rise this year. Staying with China, their sharemarket performance has been extremely poor. January’s CPI reading in South Korea was under estimates coming in at 2.8%. 

Australian home loans continue to fall, down 5.6% on last year. Manufacturing PMI crept into expansion in December, coming in at 50.1. 

Meanwhile the RBA held rates steady as expected. What was unexpected was mention of an openness to even more rate rises. 

In New Zealand the high interest rates are biting, with mortgage arrears up 21% on last year. Building permits, a measure of future housing supply, were up 3.7% in December, but were down 25% for the year! 

The latest Global Dairy Trade auction had prices up 4% overnight. Prices are up 30% since August which must be helping farmers.

Finally, StatsNZ figures show that unemployment has drifted up in the December quarter to 4%, and average hourly earnings were up 6.9% for the 2023 year, driven by public sector wage increases which were up 7.4%. 

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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