Last week depicted the sustained global macroeconomic pressure on markets across the board. While all major indices ended negative, BTC was seen to hold up the best. Good recovery and stability across the board. Earlier this week, there was a small pump, but could not be sustained later. While most indices were down, energy has started to decline faster than expected from previous outlooks. It is a result of the intertwining of governments and authorities across the board taking extreme measures on supply caps, rate fixes, and macropolitics. Amidst the winter chill, the crypto ecosystem is continuously threatened. BTC has maintained its dominance well compared to Altcoins except for ETH.
The Genesis of clarity on Gemini’s issues
Gemini, the cryptocurrency exchange operated by the Winklevoss twins Tyler and Cameron is one of the top and most highly compliant crypto businesses. Gemini’s “earn” scheme allowed small investors to lend out their coins in exchange for a set stream of profits. Additionally, Genesis, a cryptocurrency brokerage, is reportedly owing customers of Gemini $900 million.
While a creditor’s committee is created to pursue payment from Genesis, default on this will have catastrophic effects adding to the crypto winter and downturn from previous fiascos. Gemini’s reputation was only next to Coinbase. Nexo, another digital assets player is finally leaving US jurisdiction to set up a much better and structured business citing a lack of regulatory clarity in the US. This reinforces the aftereffects and high connectivity present in the crypto ecosystem.
According to last week’s article, a stablecoin or CBDC tussle among the countries is imminent, and BTC has emerged as a neutral, high-value reserve component. These theses have been in the shadows for a long time but the recent increase in the accumulation of BTC by governments across the globe has made it extremely clear that everyone is now aware of how actual wars and financial attacks in form of sanctions can cause deep troubles for any country. While not all imposed sanctions are enacted, the countries with the highest growth in BTC reserves are the ones who have seen a huge number of sanctions historically.
In the past, December has been a little bearish for cryptos. In addition, it also seems like this will be a month of events that can either pump or dump the market equally. For starters, DCG(Digital Currency Group) is set to brief SEC about its ongoing issues with genesis and other allied issues. The findings from it will dictate a big chunk of market sentiment in the coming months.
As part of this month’s data release, 9th December will also include the US PPI(Producer Price Index). While the change in the index has slowed down in recent months, any severe change in it can cause high volatility in the market. With rising oil prices, A big jump should be expected in PPI even if the current reading doesn’t show a jump. The forecasted change is 0.2% which has been constant for 3 months.
CPI, the number that impacts the market a lot is scheduled to release on the 13th of Dec and since it’s turning a good turn during the last reading, markets have been moderately bullish about the upcoming and future readings. While the minutes of the meeting did highlight significant tough times for the near future, a shift from a hawkish to a neutral tone was discernible. The last reading saw a big drop from 8.2 % to 7.7%. Although it is a tough spot, the streak is likely to continue.
The 14th of December will bring the final rate hike for the year and we are anticipating a high chance of a 50 bps hike which will be a big relief for the markets as this would be the first step down from continued 75bps hikes. While the magnitude of the hike will reduce, the pace will continue for some time.
Amidst all the numbers, the FTX case and the allied issues will finally see proceedings in the house committee. While he has denied participating, citing the time required to analyze the fiasco, it can still change within time as the senate committee has notified the will to execute a subpoena if they don’t see cooperation. Any movement or findings are going to be extremely volatile for the markets. Sit tight
Bitcoin returns were -0.87% for this week. The Alpha Blue Chip Focused Strategy returns were -4.93% during the same period (24 NOV – 1 DEC ). The Top Cap Digital Assets Strategy and Arbitrage and Balanced Opportunities Strategy returns were -2.66% and -0.89%, respectively.