Weekly Crypto Market Wrap, 8th January 2024

Download the PDF

Zerocap provides digital asset liquidity and digital asset custodial services to forward-thinking investors and institutions globally. For frictionless access to digital assets with industry-leading security, contact our team at [email protected] or visit our website www.zerocap.com

We are changing the style of our Weekly Crypto Market Wrap, bringing you a new experience to our weekly insights newsletter. Therefore, the next edition of the Wrap will be out on 22nd January. See you soon!

Week in Review

• Final Bitcoin ETF application filings posted by major US exchanges.
• Crypto users likely to reach $1 billion in 2024; Bitfinex analysis.
• Following its 15th birthday on January 9th, Bitcoin has more than 90,000 wallets worth $1 million or more, up 300% since the start of 2023.
• BlackRock expects Bitcoin ETF approval on Wednesday.
• US court orders Binance settlement to CFTC at $2.7 billion.
• Crypto investment products saw $2.2 billion total inflows in 2023 – Zerocap recently launched the Bitcoin Discount Note, enabling investors to take a long position in Bitcoin at a lower price than the market value. *For Wholesale investors only.
• China’s central bank urges world to properly regulate crypto assets.
• Ripple, Coinbase and a16z invest $78 million in pro-crypto political action committee (PAC) ahead of US elections.
• Co-founder Vitalik Buterin reveals Ethereum “game plan” for 2024.
• Sotheby’s sold $35 billion worth of digital art in 2023, VP states.
• Roughly $1.8 billion was lost to Web3 fraudsters in 2023, a 52% decline to 2022.
• FOMC Meeting Minutes: Fed officials in December saw rate cuts likely, but path highly uncertain. 
• US adds 216,000 jobs in December as stronger than expected rise caps year.
• UK economy shrinks by 0.1% in third quarter of 2023.
• Bank of Japan sticks to ultra-easy policy amid “extremely high” uncertainties, as yen continues to tumble.

Winners & Losers

Data source: TradingView

Market Highlights

• This week is poised to be a massive week for the industry, as the much-awaited spot Bitcoin ETF is predicted at an 83% chance for approval by the weekend. 
• The market, while hopeful, remains cautious. BTC’s price fluctuated significantly last week, closing with a 3% gain but not without high volatility. The options market reflects this uncertainty, with high implied volatility for BTC, notably higher than Ethereum (ETH), and a noticeable skew towards call options.
• The competition among ETF issuers is heating up, with strategies ranging from aggressive marketing to low fees, and even direct appeals to the crypto community – with VanEck pledging 5% of BTC ETF profits to BTC core developers. This rivalry is expected to boost Bitcoin’s visibility and attractiveness as each issuer battles to be the favoured investment vehicle. 
• Despite Bitcoin’s slight gain, the broader cryptocurrency market is down, with Ethereum dropping by 3.5% and other altcoins SOL, ARB, and MATIC also experiencing larger declines. 

Data Source: Trading View

• Approving a Bitcoin ETF could create a regulatory precedent for other crypto-based ETFs. The approval process for a Bitcoin ETF involves establishing a framework that could be adapted for other cryptocurrencies like Solana, simplifying the approval process for similar ETFs.
• Is ETH positioned for a pump upon approval? Likely – given a high correlational profile to BTC. ETH balance on exchanges has diminished substantially since 2022 – assisted by the merge and increased number of stakers (diminished liquidity / potentially more volatile – also indicates continued demand for ETH).

Data Source: Glassnode

• ETH is currently trading around 2,200 – a key support formed at the start of Dec 23. A delay or denial in the ETF could see the price correct lower and toward 1,800. On the other hand, it is pretty clear skies until 3,000. 

In summary – big week ahead. Watch the volatility, watch your leverage!

What to Watch 

• Australia’s yearly CPI, on Tuesday.
• Bank of England governor Bailey’s speech, on Wednesday.
• US yearly and monthly CPI results, on Thursday.
• UK’s monthly GDP and US’ monthly PPI, on Friday.

* Index used:

Bitcoin	Ethereum	Gold	Equities	High Yield Corporate Bonds	Commodities	Treasury Yields
BTC	ETH	PAXG	S&P 500, ASX 200, VT	HYG	SPGSCI	U.S. 10Y

DISCLAIMER

Zerocap Pty Ltd carries out regulated and unregulated activities.

Spot crypto-asset services and products offered by Zerocap are not regulated by ASIC. Zerocap Pty Ltd is registered with AUSTRAC as a DCE (digital currency exchange) service provider (DCE100635539-001).

Regulated services and products include structured products (derivatives) and funds (managed investment schemes) are available to Wholesale Clients only as per Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). To serve these products, Zerocap Pty Ltd is a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799

This material is intended solely for the information of the particular person to whom it was provided by Zerocap and should not be relied upon by any other person. The information contained in this material is general in nature and does not constitute advice, take into account financial objectives or situation of an investor; nor a recommendation to deal. . Any recipients of this material acknowledge and agree that they must conduct and have conducted their own due diligence investigation and have not relied upon any representations of Zerocap, its officers, employees, representatives or associates. Zerocap has not independently verified the information contained in this material. Zerocap assumes no responsibility for updating any information, views or opinions contained in this material or for correcting any error or omission which may become apparent after the material has been issued. Zerocap does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Zerocap and its officers, employees, representatives or associates do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This is a private communication and was not intended for public circulation or publication or for the use of any third party. This material must not be distributed or released in the United States. It may only be provided to persons who are outside the United States and are not acting for the account or benefit of, “US Persons” in connection with transactions that would be “offshore transactions” (as such terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This material does not, and is not intended to, constitute an offer or invitation in the United States, or in any other place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. If you are not the intended recipient of this material, please notify Zerocap immediately and destroy all copies of this material, whether held in electronic or printed form or otherwise.

Disclosure of Interest: Zerocap, its officers, employees, representatives and associates within the meaning of Chapter 7 of the Corporations Act may receive commissions and management fees from transactions involving securities referred to in this material (which its representatives may directly share) and may from time to time hold interests in the assets referred to in this material.  Investors should consider this material as only a single factor in making their investment decision.

Past performance is not indicative of future performance.