Market Wrap #9: Too Prematurely Early
BTC ended the week ~6% lower, pretty much in line with ETH that dropped ~6.7% around a similar time frame. The dropp in price was concentrated over the weekend (~7.8% drop) as Powell argued for restrictive policy at Jackson Hole symposium on Friday, “… the historical record cautions strongly against prematurely loosening policy”. In case you missed it, below is a summary of his points:
- Reiterated that it will become appropriate to slow the pace of tightening “at some point”, previously laid out in July press conference
- Balanced that message by stressing that FOMC remains committed to bringing inflation down
- That the FOMC will likely need to maintain “a restrictive policy stance for some time”,
- and progress on inflation “falls far short of what the Committee will need to see before we are confident that inflation is moving down”
- Powell said another 75bps hike “could be appropriate” in September.
Powell did surprise the market slightly on the hawkish side given that many of the recent CPI and business confidence data may have pointed to a peak inflation scenario.
Chart of the Week
That said, BTC price did move in line with our expectation (outlined in last week’s wrap) that BTC might move lower towards the $18k handle after breaking the closely watched lower support of the upward channel at ~$22k.
The information presented is not investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. As always, please do your own research.
Market Recap
1. Cboe Is Teaming With Virtu, Jane Street to Build Crypto Business
Cboe’s potential equity partners include B2C2, Hidden Road, Interactive Brokers Group Inc. and Jump Crypto, according to a statement Thursday. Terms of the equity partnership will be finalized in coming weeks.
2. FTX is currently focusing on US Crypto derivatives
Crypto derivatives are made possible for FTX after their acquisition of Ledger Holding. “I think it’s incredibly important for the future of the ecosystem, and for our company, that we can bring the same level of liquidity and market access to the United States that people have had internationally.” — SBF
3. Thai lender SCBX scraps $500 m acquisition of crypto exchange Bitkub
Thailand’s oldest lender, SCBX Pcl, said it was pulling out of a $500 million deal to buy crypto exchange Bitkub, saying the start-up needed time to fix regulatory issues.
4. Bitcoin Depot Strikes $885m SPAC Deal to Go Public
The backdoor listing plans to occur on Nasdaq by Q1 2023. Bitcoin Depot — crypto ATM operator, allows users to convert cash to Bitcoin, Ethereum and Litecoin at over 7,000 kiosks in 47 U.S. states and nine Canadian provinces.
5. Beijing lays out plan for metaverse development in tech development zones
The implementation plan for Beijing to build a global digital economy benchmark city in the city’s sub-center. It emphasizes a potential role for metaverse development in the city’s innovation center as a source for tourism and cultural interchange. That includes a metaverse theme park and smart hotels.
No budgets for actual grants or subsidies for developments were provided as part of the release.
6. Goldman Sachs aims for a Wall Street built on blockchain as Crypto slums
Major banks have largely avoided investing directly in cryptocurrencies, but many are quietly working to integrate blockchain, the technology behind crypto, into trading and other businesses.
GS is already trading bonds and other debt securities for clients on blockchain-based networks such as Ethereum, and is also building its own blockchain-based trading platform.
Economic Summary/Market Stats
7d Market Update
Crypto
🔻 BTC: -8.02% to $19,695
🔻 ETH: -10.05% to $1,429
🔻 SOL: -16.04 % to $30
🔻 Overall Crypto Market Cap: -7.39% to $985 M
🥴 Bitcoin Fear & Greed Index: Fear (24/100)
Equities
🔻 S&P 500: -3.37%
🔻 DJ Industrial Average: -3.03%
🔻 Nasdaq 100: -3.94%
🔻 Hang Seng Index: -1.32%
🔻Stoxx Europe 50: -1.35%
Rates
💸 USDC Supply APY: 0.70%
💸 ETH Supply APY: 0.10%
💸 BTC Supply APY: 0.07%
💲3-Month US Dollar Libor: 3.06957%
💲US Treasuries 2-Year: 3.452%
💲US Treasuries 10-Year: 3.101%
Key Economic Releases
23 Aug (Tues)
9.45am ET: S&P U.S. manufacturing PMI flash (median forecast 51.7, previously 52.2)
9.45am ET: S&P U.S. services PMI flash (median forecast 50, previously 47.3)
25 Aug (Thurs)
8.30am ET: Initial jobless claims (median forecast 254k, previously 250k)
26 Aug (Fri)
8.30am ET: Core PCE price index YoY (median forecast 4.8%, previously 4.8%)
