FPG’s Weekly Perspective on Crypto Markets: January 10th, 2023
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Market Summary
Overall markets picked up steam during the first week of the new year, a possible January effect in addition to increased speculation of a milder series of rate hikes in this new year and China’s re-opening. 2023’s first CPI reading is slated to be on the 12th of Jan, markets will be watching out for that. Employment numbers released last week once again beat expectations, however hourly wage rates underperformed expectations, a sign that most of the new jobs could simply be lower paying roles.
Gold has also hit a new multi — year high as investors increasingly flock towards gold as a safer inflation hedge. China has reported an increase in gold holdings after not buying gold for more than 3 years.
On the crypto front markets strengthened as mentioned last week, after NFTs led the way in this current movement followed by a series of short squeezes among the various heavily shorted altcoins such as $LDO and $SOL. We will touch more on that in a later segment. However amidst this temporary market reprieve, the whole situation at DCG seems to only get worse after their very open twitter spat with the Winklevosses. DCG has also shuttered their wealth management arm.
Notable Events and News
Tuesday 10 January
Fed Chair powell speaks
Wednesday 11 January
US- 10Y Bond auction
US- Crude inventories
CNY- CPI and PPI
Thursday 12 January
US- CPI
US- Unemployment Claims
Friday 13 January
US- Consumer sentiment
GBP- GDP
Notable Events and News
Crypto Conglomerate DCG Closes Wealth-Management Business
Digital Currency Group, the cryptocurrency conglomerate whose Genesis Global Trading division just announced more layoffs, said it’s shutting down a wealth-management division called HQ. The Information reported on the closure earlier, saying the business had more than $3.5 billion of assets under management.
Mt. Gox repayments timeline pushed back by two months
The timeline for Mt. Gox financial details registrations and repayments has been pushed back by two months. The deadline for the first tranche of repayments from Mt. Gox has been moved to Sept. 30 from July 31, according to a creditor announcement. Payments will begin from March 10 onward, a date that has also been moved back by two months.
Animoca halves fundraising target for web3 fund to $1 billion: Bloomberg
Animoca Brands has cut in half the amount it hopes to corral for a new web3 and metaverse investment fund. Yat Siu, the Hong Kong-based company’s chair, said in an interview that it is now looking to raise around $1 billion for Animoca Capital this quarter, according to a Bloomberg report.
Indonesia to Start Crypto Exchange Ahead of Regulatory Shift
Indonesia plans to set up a crypto exchange this year before it shifts regulatory powers over such assets to the Financial Services Authority, from a commodities agency.
Market Insights
Market Technicals and OnChain Analysis
Markets moved in response to the overly negative funding rates as highlighted last week, a sign of overzealous shorts in the markets. Notable altcoins with deeply negative funding rates were squeezed upwards by at least 30% with $LDO being the outperformer due to its relatively lower liquidity momentarily hitting $2.60. As shown below, rates have largely normalised as a result of this move.
Miner’s net position has also started to swing positive after covering this topic a few weeks back. Not exactly a guaranteed sign that things are turning for the better but at least miners have slowed the pace of selling their BTC holdings and possibly switched back to accumulation mode.
Looking at overall leverage ratios for both BTC and ETH, they are picking up however we do not see any significant moves yet. This could be a sign that the current rebound could have some legs, although do not discount any intra-trend fluctuations. The $1,330 zone for ETH is important to hold if we are to see $1,400. For BTC, do watch for the $17,500 region to be tested as the week kicks off.
It is also interesting to note that the number of transactions on Optimism has reached a new all time high
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About Floating Point Group:
Floating Point Group is a crypto prime brokerage platform and agency trading desk for asset managers that removes the barriers and complications to access liquidity across a broad set of markets in order to deploy advanced cryptocurrency-centric strategies at scale. The company carries insurance for custodied cryptocurrencies and is regulated in the U.S.; FPG has also secured VASP registration in the Cayman Islands.
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.
