Weekly Market Update: Major Coins Resilient Despite Volatile Markets

The majors have proven resilient amid the recent regulatory turbulence, however altcoins, particularly those deemed as securities by the SEC, have continued to slide lower. 

In wider economic news, the headline growth of the S&P 500 is impressive, however in reality it’s all been driven by 7 mega tech companies who have hitched their wagon to AI. 

The US market appears to still be digesting the FOMC news with analysts evenly split on if more rate rises are coming.Meanwhile Japan is riding a growth wave, as is India.Most other countries are going backwards economically. 

In New Zealand we are officially in a recession, and there are signs we are continuing to slow with retail activity and manufacturing both down. 

Tellingly, the sentiment in the crypto market has held steady despite all of the regulatory headwinds holding just in fear territory.

A late midweek rally means we have quite a lot of green looking at the weekly. Regardless, below are some trend highlights for the week:

• At the time of writing BTC was having a belter up 8%, as was SOL.
• ETH, BNB and LTC were all up 3%.
• XRP was the worst performer in the top 30, down by 6%, while MATIC continued its downwards trend to be -3%.
• This week’s biggest gainer was Bitcoin layer 2 provider Stacks (STX) who appears to be riding the Bitcoin innovation wave, up 41%.
• Bittorrent (BTT) is our biggest loser of the week, down by 13%.

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

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Highlights from the crypto space

We are getting very close to a major ETH milestone, with more ETH being staked than is sitting on Centralised Exchanges.

The decentralised army is pretty happy. Supply continues to reduce as well, thanks to the Merge. 😎. Finally, the percentage of ETH staked vs total supply is at17%, up from 15%, however its way below other Proof of Stake chains which sit at approximately 50%. 

According to Santiment, Bitcoin whales have been seeing the recent price declines as an opportunity to accumulate. 

An interesting twist in the Republican swat at SEC chairman Gensler, with them alleging the SEC shutdown of crypto is designed to make way for a CBDC which they vehemently oppose. A Treasury official then said that they haven’t decided if they will do a CBDC. 

In the Ripple vs SEC court case, the so-called Hinman files were released. While there is no direct mention of XRP, they clearly state ETH isn’t a security under the Howie test. 🚀

Binance US responded to the SEC suit, reiterating that they had been cooperating with the SEC for some time. There’s been time to read the court transcript too, and it appears the government has no evidence of funds being moved offshore. 

And in some good news, a judge rejected the SEC claims to freeze Binance US’ assets. However, it looks like they have AML issues in France now too. 

In the Coinbase SEC arm wrestle, the SEC has come back with an underwhelming response, saying they may have rules in 120 days… or maybe not. 

Forbe’s ran a piece on Gary Gensler and why he was on the attack against crypto. TLDR; “Gensler’s attack on digital assets poses an existential threat to the industry. But for him, it may well be just a stepping stone on the path to higher office.”

The regulatory crackdown has had a predictable impact on institutional volumes in crypto with Coinshares posting its 6th straight week of outflows. In a trillion dollar industry, the volumes aren’t that significant though.

However, unperturbed by all of this, Blackrock, the largest asset manager, filed for a spot Bitcoin ETF in the US…. 💎👐. 

Institutional investors are changing their approach to crypto investing too, seeking out venues where custody and the exchange are separated. 

The 19 tokens flagged as unregistered securities are taking a pounding in the markets.

Polygon announced their 2.0 agenda with a clear “we are expanding away from the US” message.

Behind the scenes, bank access by crypto companies has been reordering itself due to the US actions. This is seen as long term positive. 

Uniswap announced their vision of Uniswap v4. 

In a precedent setting decision, a US court has held that Ooki DAO is a person and can be held liable. Ooki DAO, which ran a retail margin trading business, has shut down. 

Kaiko analysis shows that Bitcoin (and ETH) have proven to be relatively stable over the last 90 days compared to altcoins. Being down ~3% despite all of the regulatory shunts is quite an achievement. 

In stark contrast to what is happening in the US, the Bank of China’s investment arm issued tokenised notes on the Ethereum blockchain. 

There is something shady going on with a company called Prometheum. The backers clearly have historical ties to the SEC and they seem to be supporting messages aligned to the anti crypto politicians.

Defunct lender Blockfi will open for withdrawals some time in summer. 

Acade.xyz is letting people use real world assets (RWA) to get DeFi loans. 

The famous 3pool on Curve experienced some challenges when the small USDT depeg led to a major arbitrage play which messed up the balance. 

Wyre, the crypto payments company is shutting down after a long battle to stay afloat. 

A great thread on why China is pivoting hard into Crypto

Layer 2’s are old hat, Arbitrium launched a layer 3 solution to scale web3 gaming. 

Starting off with global news 

Someone tracks high networth individuals (HNWI) immigration patterns. The countries losing the most HNWI are China, India and the UK, with the major beneficiaries being Australia, UAE and Singapore. It seems the wealthy Chinese don’t like the look of things to come. 

🌎 Macro news TLDR: … .China continues to struggle, the Fed expected to pause. 

Argentina’s problems seem to be worsening and they are looking at a risk of defaulting on their IMF loans. 

U.S. economic news

As widely expected the Federal Open Market Committee (FOMC) held the Fed funds rate at this month’s meeting.

In an attempt to reign in market enthusiasm, they put forward a very hawkish future guidance statement, going so far as to signal 2 more rate rises to come.

Producer Prices rose 1.1% from last year and there is an absolute boom in construction spend on manufacturing in the US.

Meanwhile, in Europe

European production for April bounced back slightly, up 1%. The ECB is on a different path from the Fed; it raised rates 25 bps to 4% and said they are not thinking about pausing rate hikes, perhaps learning from Canada and Australia.

The UK’s inflation problems aren’t going away. Their labour market continues to run hot with wage inflation coming in at 7.2% and still increasing, employment also rose. In good news, the UK’s GDP for April showed 0.2% growth.

In Ukraine news, Russia is saying it is not possible to extend the Grain Deal under ‘current circumstances’, however it extended hope to poorer nations that it had their backs. Geopolitics in action. 

And in Asiapac…

Japan’s resurgence continues, with the Nikkei closing above 33,000 for the first time in 33 years led by tech shares.

The BoJ held its central bank rates, continuing with its ultra-loose monetary policy. Singapore’s exports fell 15% in May, most probably signalling the regional/global slowdown. 

Evidence of China’s slowdown continues; industrial production and retail sales both below forecast, while youth employment hit record highs in May.

The PBoC is cutting medium term rates to try and stimulate growth and the WSJ is reporting that officials are reverting to form and planning billions in infrastructure spend to kick start the economy. 

Australia had a surprise drop in their unemployment data, with the unemployment rate dropping to 3.6%. Markets are waking up to the persistent inflation and now 2 rate hikes are being priced in before October. Unsurprisingly retail (household) spending is way down as households tighten their belts. 

New Zealand’s food price inflation increased by 12.1% for the year to March. Foodstuffs are saying that international drivers of cost are falling, however domestic inputs like wages and the weather events are increasing prices.

House prices were down 11.2% year on year, and May house sales volume was the lowest since 2011, but that market appears to be bottoming.

GDP figures for Q1 came out and showed a second quarter of decline giving the RBNZ what they said they wanted, a policy induced (technical) recession.

And finally our Manufacturing PMI improved ever so slightly to 48.9, not great but not getting worse. 

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

Stay tuned for the next update.

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