Weekly Market Update: Number Goes Down…

Then back up. Apparently instigating a war on drugs on a weekend when equities aren’t trading isn’t good for crypto.  Who knew? ‘Prepare for volatility’ seems to be the best strategy at the minute. 

What drove Monday’s crash? Well the TLDR seems to be bad macro news (the tariffs) leading to a sell off, this caught out all those people with leveraged positions and led to a cascade of sell offs.  If you hold alts or memecoins, don’t look.  I warned you!  Somewhat reassuringly, this is a fairly normal event. Feel better? No, me neither. 

In other news, the calls for the US to adopt Bitcoin as a strategic reserve asset are growing, Ethereum usage is growing despite its pricing doldrums, Uniswap V4 is out and there have been so many ETF applications that researchers are actually putting out pieces on the market depth and liquidity of them all.  

Macro economic news is dominated by what is now being called statecraft.  The Trump administration is rolling out its tariff plans to bring partners to heel and deliver on the vision of rebuilding their manufacturing might. 

In the US, GDP was up for Q4, PCE inflation also edged up and manufacturing looks like it’s expanding. The big news was the Fed signalling a pause to rate cuts.  Trump was unhappy about that.

Europe’s course is looking quite different.  The ECB delivered a rate cut and their growth prospects look much more tempered. Inflation actually ticked up led by services. 

Turning to APAC. Japan looks like it actually has inflation with CPI way higher than expected. More rate rises are on the cards. Another PMI for China showed them sitting right on the cusp of expansion.

In Australia retail sales dipped and house prices were weaker in January.  

In New Zealand, consumer and business confidence is down, as are building consents. The housing cost of living index painted an inflation picture that is still heading down.  Unemployment is continuing to rise and is forecast to get worse in the first half of the year. 

Market sentiment is unchanged week on week and we remain in greed territory.

Highlights this week: 

• The mid week price dive means most of the top 30 assets are down in the 10-20% range. 
• Most of the volume this week was on the buy side as it appears you all took advantage of the price dip.
• The most popular coins show an interesting pattern. BTC was particularly popular with our buyers, as was XRP.  SOL was sold in large quantities. 
• At the time of writing BTC was flat for the week.  ETH, XRP and BNB were all down 10%, SOL was down 6%. 
• QTUM is our best performer this week up 27%. 
• TRUMP fell another 40% to be the worst performing asset 2 weeks in a row.   

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

Highlights from the crypto space

Crypto markets dipped drastically on Monday in response to the Trump tariffs. We suffered our biggest single day of liquidations ever, which basically means all the leverage is gone from the system. Bybit is saying the liquidation value is understated. 

However, the market seemed to recover after Trump agreed to pause tariffs with Canada and Mexico.

It is worth noting that these types of drawbacks are normal, very normal in fact. Well for BTC. 

Elon Musk is investigating using blockchain technology to track government spending.

Senator Lummis is proposing the US add Bitcoin as a strategic reserve. They aren’t alone, the Czech national bank also stated they are considering it. 

The number of Ethereum active wallet addresses is up 37% in Q4.

Phantom Wallet has launched a multichain swap feature. 

Uniswap V4 has launched and is apparently very, very good for DeFi. 

There has been a flurry of spot ETF applications now, however we need to temper this with some realism; illiquid coins are just too easy to manipulate so are unlikely to be cleared. Kaiko is researching this. 👇 

Other Crypto news

• Coinbase has secured its FCA license to operate in the UK market. 
• Kraken has reinstated its staking product. It paid $17m in fines to the SEC last time it launched it. 
• Tether continues to post record profits. 
• Starknet is looking to simultaneously settle on Ethereum and Bitcoin. 
• SBF’s parents are partitioning Trump to free him. Good luck. 

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🌎 Macro news TLDR: …Tarrifs …

The Trump administration has come out with 25% tariffs on Mexico and Canada, plus a 10% tariff on China. All countries immediately responded. Trade wars look likely and the markets are spooked.

Some comfort was restored when it was announced that Mexico had a deal and it was all about drugs. Canada cut a deal too.  China? Well they just imposed tariffs on a limited set of US goods. 

U.S. economic news

The US trade deficit widened in December, this was expected as countries tried to beat the signalled tariffs. 

US GDP growth for Q4 was 2.3%, below expectations and down quite a bit on Q3’s 3.2%.  Annual GDP was 2.8%.

Things are going just fine over there! PCE inflation came in slightly elevated at 0.3% for December which was expected. PCE is 2.6% annualised. Manufacturing PMI edged into expansion in December. Job openings fell to 7.6m in December, over 500k down on November. 

The Federal Reserve asserted its independence from the government by choosing to pause its rate cuts due to the strong economy and stable employment environment. This wasn’t what President Trump wanted and he let the world know.   

Canada is now in full-blown economic accommodation, mainly to combat a new unfriendly neighbour, rates are being cut and QT is over. Citizens are already boycotting US products in a move likely to have more impact than a tariff war. It’s on. 

Over in Europe….

The ECB delivered a 25 bps rate cut with the main rate now at 2.9%. European inflation rose in January to 2.5%, meanwhile PMIs across the block show large economies in contraction and small ones growing. 

In the UK, the right wing Reform UK party is now leading in the polls. 

And in Asia Pacific…

Japanese CPI surprised to the upside, coming in at 3.4% vs 3.0% expected.  Rate hikes are back on the table. Retail sales were also way up at 3.7%. Caxin PMI for China showed them finely balanced at 50. China may take the US on in the trade war by letting the Yuan sink. 

Australian producer prices rose 3.7%, which is solid, but their lowest in several years. Retail sales were flat in December and house prices were weak for January. 

In NZ, building consents are down in December, House prices were down 11% in January, ANZ Roy Morgan poll shows consumer confidence has fallen slightly in January driven by a deterioration in the financial situation of the population. Business confidence was also down.

The Household Cost of Living Index has inflation running at 3.% pa. Unemployment for the December quarter rose to 5.1% from 4.8%. Underutilisation is also up. Economists are expecting unemployment to continue to rise 

That’s a wrap for this week!

Stay tuned for the next update.

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