FPG’s Weekly Perspective on Crypto Markets: December 12th, 2022
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Market Summary
The week opened with a Reuters report alleging money laundering charges are under consideration by the DOJ for Binance and Binance’s founder CZ. Binance has since refuted the claims, as reported by MarketWatch. The coming week will be a big one for global economic numbers with major rate decisions from Europe and US slated to be out on top of key CPI and PMI numbers too. Crypto volumes over the weekend have dropped more than usual (BTC volume dropped 37%, ETH volume dropped 50% leading into the weekend) in what could be seen as a risk off move prior to these numbers.
The crypto markets continue to trade in a tight range for the majors as altcoins continue to lag behind, though in the continued fallout from the events this year GBTC discount hit a new record high of 48.6% as nothing new has yet to surface to allay fears in DCG.
Notable Events and News
Tuesday 13 December
US — 30 Y Bond auction
US — CPI
Wednesday 14 December
US — FOMC Statement and Press Conference
US — Crude Oil Inventories
Thursday 15 December
GBP — Official Bank Rate
US — Unemployment Claims
US — Retail sales
EUR — Monetary policy statement
Friday 16 December
US — PMI
EUR — German, French PMI
GBP — PMI
Notable Events and News
Banks face first global cryptocurrency rules in wake of FTX collapse
Banks will be required to follow international regulations regarding the ownership of cryptocurrencies to better safeguard the industry against the volatile assets.
The Basel Committee on Banking Supervision, the Switzerland-based global forum for crafting industry rules, is poised to instruct lenders to set aside capital that matches the value of certain cryptocurrencies in their holdings. The new directives are to be finalized by the end of the month. The SEC also reportedly wants firms to disclose their crypto holdings
Sam Bankman-Fried arrested in the Bahamas after US prosecutors filed criminal charges.
A statement by the government of the Bahamas said Mr. Bankman-Fried was arrested after prosecutors in the United States filed criminal charges. “S.B.F.’s arrest followed receipt of formal notification from the United States that it has filed criminal charges against S.B.F. and is likely to request his extradition,” the statement said.
Senate Banking Committee calls on Bankman-Fried to testify on Dec. 14
The U.S. Senate Banking Committee wants Sam Bankman-Fried to testify on the collapse of his crypto exchange, FTX and linked trading firm, Alameda Research. The letter requests Bankman-Fried’s presence on Dec. 14, the day after a scheduled House hearing where members of Congress also want the embattled former crypto CEO to testify. Though many do not believe he will testify physically in the United States in fears of being remanded.
Illuvium’s Open-World RPG Beta Release Date
As one of the most highly anticipated games to be released on Ethereum, Illuvium has finally announced a Beta release date of December 12th at 7 PM UTC.
Illuvium would be one of the first games to feature upgradeable NFTs called Illuvials that can be upgraded within the game and used across various platforms and games.
Market Insights
Market Technicals and OnChain Analysis
Over the past down swings it can be observed that the realised cap of various UTXO Age Bands hit a new high before rapidly turning down as newer holders start to hodl their newly acquired BTC. The under 1 year holders have already started to do so, once the other longer term holders start to exhibit the same movement we could see a stronger rebound.
We are currently at levels higher than those seen during the bottom accumulation zones of the past couple of down swings, good to observe for a few more weeks for a possible trend to solidify.
Interesting to note that after highlighting signs of miner’s capitulation via a large drop in hashrate a few weeks back, the miners are once again back! Hash Rates are currently back hovering around all time high levels once again as Miners turned their rigs back on. Miner reserves have also stabilized without any more large drops, another important metric to keep track of for the weeks to come.
A quick look at the Coinbase premium shows possible increased institutional buying and also a huge reshuffle in the wake of the FTX debacle. Institutions and HNWIs who found a way to get comfortable with offshore unregulated exchanges such as FTX International are now placing increased focus on security and reliability by transacting only on trusted and regulated venues such as Coinbase.
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Floating Point Group is backed by Tribe Capital, Coinbase Ventures, Anthony Scaramucci, FAST by GettyLab, Borderless Capital, CapitalX, Formulate Ventures, BoxOne Ventures, Seabury Global Markets, AngelList’s Naval Ravikant, and a host of angel and institutional investors.
For more information, visit floating.group.
Disclaimer:
This communication should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any asset in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.
