Weekly Market Update: Some Stability After Last Week

Crypto assets took a breath after the big falls of last week.  Tradfi, unencumbered by Mt Gox and Government selling, has continued its streak and appears to be doing pretty well. 

In crypto news, the SEC got heavy handed all over again with both Consensys and Silvergate in the gun this time.  But it’s not all one way traffic with a cashed up Coinbase taking it to them. 

In other notable news, Van Eck is first to file for a Solana ETF, Sony is entering the crypto space and Binance is now licensed in Dubai.  We are also hearing that Mt Gox will start distributing around $9bn in BTC in the coming week. 

In macro news, shipping costs continue their rise due to the issues in the Red Sea while politically we seem to be witnessing a shift to the right in the political spectrum in Europe. 

There is growing evidence of a slow down in the US, PCE inflation is down and manufacturing remains in contraction.  Consumer sentiment is holding flat at present.  

In Europe, German CPI is down again, Europe CPI is trending down, however Core and Services inflation are both a concern, and France’s National Rally party securing an early majority. 

In Asia, industrial production in Japan and India is on the increase, while China remains in contraction.

Australia isn’t looking so hot with PMI in contraction and they are one of the few G20 economies with increasing inflation.  Their pain may just be beginning. 

In New Zealand, the red indicators continue to flash. Business liquidations continue to increase and consumers in credit arrears are way up.  At the other end of the spectrum, building consents and activity are way down.  

Market sentiment, as measured by the Fear and Greed index, has been nothing short of wild in the last 3 weeks.  We have gained 21 points since last week and have recovered to neutral territory. 

Highlights this week: 

• An early week recovery followed by a slow decline means we have had a largely muted week in terms of price action with the majors largely flat for the week except for a couple of notable exceptions. 
• The largely uneventful week means our buy-sell ratio has returned to normal with it being evenly split. Our high value customers are treating last week’s pullback as a buying opportunity and gobbling up cheap assets, particularly BTC. 
• At the time of writing BTC, ETH and BNB have moved less than USDT on the week and are absolutely flat. SOL, AVAX and DOT all had solid weeks up 10%. 
• Yearn Fiance (YFI) was our best performing asset, up 15% on the week.
• PEPE was our worst performer this week, down 15%. 

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

Highlights from the crypto space

Last week’s BTC price drop led to a bunch of outflows on the ETFs, or maybe the ETFs led the price drop (they are definitely correlated).

Anyway, we got some positive inflows later in the week which aligned to the price stability.  Staying with ETFs, Van Eck has filed for a Solana EFT. 

Metamask (owned by Consensys) has launched pooled staking which is…interesting given the SEC just filed against Consensys for running unregistered securities due to its staking product. The SEC also went after Silvergate Bank related to its dealings with FTX. 

Binance has secured a VASP licence to operate in Dubai. A US judge has ruled that the SEC case against Binance can continue. 

Coinbase has disclosed it is suing the SEC and the FDIC. Gutsy move. Stripe and Coinbase have teamed up to add USDC to Base

Circle is the first global stablecoin issuer to be compliant with MiCA in Europe. 

The Danish regulator, the FSA, looks like it is attempting to regulate ‘interfaces’ or wallets which is being called a major overstep. 

Solana’s stablecoin volume has tanked to ~$7bn per day.  It looks like a move by the Solana Foundation to stop MEV sandwiching attacks was the culprit.  

John Glover, Chief Investment Officer at Ledn, did some BTC price forecasting. TLDR; if we break $56k, we are going lower. But he’s comfortable that after the US summer, we will get back into the groove and heading for $90k this year. 

Mt Gox is reportedly about to start distributing its BTC holdings, all $9bn of it.  We are hoping for some diamond hands on the other side. 

The German Government continues to move BTC to exchanges. 

Japanese megabank Nomoura has released a survey which shows 50% of Japan’s investment managers plan to invest in crypto. Sony must have got the message, they have purchased crypto exchange Amber. 

🌎 Macro news TLDR: …Higher for longer cools markets

Containerised shipping rates continue to increase. They are up 256% on a year ago.  China outbound rates to Europe, affected by the actions of the Houthis, are the major culprit. 

Maersk is saying this disruption will roll into Q3. 

U.S. economic news

The closely watched inflation indicator  the Personal Consumption Expenditures (PCE) rose 2.6% year on year.  A good result. Core and Headline PCE were both 2.6%.

US consumer sentiment is basically flat. US Manufacturing PMI recorded its 3rd straight month of contraction coming in at 48.5 for June, down from 48.7 in May. 

JOLTS for May showed slightly more job openings than expected at 8.1m, Non-Farms payroll data on the weekend will be critical to confirming the trend the Fed wants to see. 

Over in Europe….

In France, the far right has won in the first round of elections. Germany’s CPI fell to 2.2% for June, Core CPI was 2.9%. 

Eurozone headline inflation for June fell to 2.5%, while Core inflation narrowly missed its estimate remaining flat at 2.9%. Services inflation didn’t move. 

The ECB will digest this but has already signalling they are in no hurry for more rate cuts. 

And in Asia Pacific…

Japan’s industrial production for May increased 2.8% month on month. While South Korea fell 0.7%.  In India, their PMI Index climbed to 58.3 in June from 57.5 in May. Chinese Official PMI data for May showed a consistent pattern of contraction. Services PMI also fell. 

Australia’s manufacturing PMI contracted further to 47.2 for June, well down on May’s 49.7. Australia’s inflation is heading the wrong way, up 0.4% in May to be 4% vs 3.6% a month prior.  RBA minutes from June asserted they were on track to beat inflation.

Given their OCR is 4.35%, it looks like the RBA will have to have a serious look at more rate rises, especially as the stage 3 tax cuts are coming into effect now. 

In New Zealand, company liquidations are up 22% year on year and nearly 500 000 consumers are in credit arrears according to Centrix.

Building consents are down 23% on the year to May 24.  The Global Dairy Trade auction was a disappointing one, with WMP prices down 6.9%. 

That’s a wrap for this week. 

Stay tuned for the next update.

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