8 Jan, 24
Weekly Crypto Market Wrap, 8th January 2024
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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
- 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:
|High Yield Corporate Bonds
|S&P 500, ASX 200, VT
Zerocap Pty Ltd carries out regulated and unregulated activities.
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