Weekly Market Update: Microstrategy is a total chad

After last week’s Binance news normal service resumed in the crypto space. BTC topped out at US$44.3k, apparently off the back of the markets seeing the Binance settlement positively.

Institutional inflows into the sector keep coming, adding to that stablecoin liquidity is ramping up. It’s almost like they know something. Not financial advice.

Microstrategy added another 16000 BTC to its holdings and posted a comparison to other financial products and institutions touting the success of its diamond hands strategy. 

In global news, the OPEC oil countries continue to constrain supply citing slower economic growth, bourne out by two thirds of economies having Manufacturing PMI’s in contraction. 

US GDP numbers are extremely healthy and core inflation measures like PCE are trending in the right direction. While the Fed is being cautious, the risk assets are all appearing to be front running rate cuts. European inflation has turned the corner and is now in the mid 2’s, which should make the ECB happy… 

Across Asia, India again looks the best of the bunch. China’s central bank is talking up support for manufacturing, while PMI’s across the region paint a largely contractionary story. India though is booming. 

Locally, it is looking like the approach of ‘going softly and late’ at inflation in Australia means they are on the wrong side of the curve. In New Zealand, there are more signs of a slowing economy with retail spending below estimates. 

The Crypto market sentiment has retracted slightly this week, however we remain firmly in greed territory.

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 was up 2.9% breaking the critical $38k USD mark (NZD $63k), while ETH gained 4% to sit above $2k US (NZD $3.4k) 
• IOTA (IOTA) was our top performing asset this week, up 81%. 
• Our biggest loser this week was Waltonchain (WTC) down 23%.

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

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Highlights from the crypto space

The SEC has surprised markets in a good way, initiating the comment period on the Franklin Templeton’s spot bitcoin ETF proposal earlier than expected. Commentators see this as positive in that it will allow the SEC to line up approvals at the same time in January. 

Michael Saylor at MicroStrategy (MSTR) just won’t let up, buying another ~$600m in Bitcoin (16000 BTC). Hard to argue with his thesis at the moment 👇

Coinshares’ weekly update shows that institutional money is continuing to roll in. They say we last saw this amount of inflow in late 2021… you do you. 

Indices provider CF Benchmarks has launched a staking reward series so institutions can track that. When (if) central bank rates drop, this could bode well for inflows. 

Milk Road reports that stablecoin supplies are up $2.2bn in the last 90 days, this is usually a sign of increased liquidity.

Ethereum’s carbon footprint has absolutely tanked since it switched to Proof of Stake. According to this report, i’s now the equivalent of 450 households.

And the ETH supply since the merge? Well that is great news too…

Other highlights from the crypto space:

• Coinbase may be forced to share its user trading data with the CFTC. They are saying they will challenge the scope though. 
• Binance is planning to delist the stablecoin BUSD in December. Staying with Binance, Ronaldo is being sued in Florida for promoting the exchange and the SEC in the Philippines has moved to block access to the exchange because it doesn’t have the right licences. 
• Another mixer is in the gun, Sinbad has been seized by the FBI and Dutch Authorities due to alleged dealings with North Korean hackers. 
• DCG and its subsidiary Genesis Global are close to a revised settlement agreement over Genesis’ bankruptcy. Staying with DCG, they also run the Greyscale trust which is a leading contender for a Spot BTC ETF, it’s been noted that Greyscale has updated its trust agreement to support that move. 
• From the absolutely crazy file, the Kyber hacker has demanded complete control of all of their assets.

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 … 

Opec+ announced Thursday that it intends to cut production by another million barrels per day (total 2m) going into 2024. The cuts are voluntary. Oil prices rose 1% immediately on the news. 

Globally, manufacturing activity is struggling with most economies in contraction. There are green shoots of demand, however the key word is ‘soft’. 

🌎 Macro news TLDR: …Holiday break 

U.S. economic news

A known hawk on the Fed monetary committee came out this week and said they are increasingly confident that the policy is working. 

TLDR; no more hikes are expected. US consumer confidence rose for the first time in 4 months as the soft landing looks increasingly likely. US credit card delinquency is creeping up though. 

US 3rd quarter GDP was significantly better than the forecast 4.9%, coming in at 5.2% annualised. Based on that, the economy is roaring along. 

Yet perversely manufacturing ISM posted its 13 straight month of contraction, coming in at 47.7. A key metric used by the Fed, PCE inflation, fell to 3.5% for September, its lowest ratesince April 2021. 

Meanwhile in Europe….

German and Spanish inflation fell more than expected with German inflation coming in at 2.3%.

Later in the week Eurozone inflation numbers also came in ahead of forecast, having cooled from 2.9% to 2.4% for the year to October. Core inflation was down to 3.6%. This led to the inevitable speculation that the ECB will start rate cuts sooner. 

In a sign of the times, a Swiss bank’s shares got hammered when investors realised it has large exposure to a commercial real estate client who is in trouble. This could be the tip of a large iceberg.

And in Asia Pacific…

In China, a friendlier version of PMI, Caxin came out, painting a slightly rosier picture of their manufacturing sector with a 50.7 result for November.

The Chinese central bank will be ‘accommodating’ for projects that build manufacturing or infrastructure. Meanwhile, Chinese borrowers are defaulting at record levels, 8.5 million of them are now blacklisted. 

It is PMI week across Asia with most economies putting out numbers. The consistent trend is PMI is still in contraction at around 47, but it has improved since October. This is true for Japan, Philippines, Indonesia, South Korea and Malaysia. India is a clear outlier, posting a PMI of 56, up from 55 in October. 

Corelogic reported that some of the heat has come out of the Melbourne and Sydney housing market, with small falls in November. RBA rate decision Tuesday 2.30 pm local, rates are expected to hold. In New Zealand, the number of people making hardship withdrawals from their KiwiSaver has doubled.

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

Stay tuned for the next update.

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