FPG’s Weekly Perspective on Crypto Markets: January 4th, 2023
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Market Summary
Crypto markets started 2023 with a bang, with SOL sharply recovering from recent lows right after Ethereum co-founder Vitalik Buterin tweeted his support for the blockchain, outpacing the broader market. BTC and ETH are still trading near their December 2022 levels and have yet to find a clear direction. Market participants are most probably waiting for this week’s upcoming US non-farm payrolls and unemployment data before getting their toes wet once again.
The spotlight is also on two well-known crypto billionaires Cameron Winklevoss and Barry Silbert, with both of them exchanging heated barbs on Twitter over unpaid debt. Latest being Su Zhu chiming in once again on this latest twitter drama
Notable Events and News
Wednesday 4 January
US- ISM Manufacturing PMI
US- JOLTS Job Openings
US- FOMC Meeting Minutes
Thursday 5 January
US- ADP Non-Farm Employment Change
US- Unemployment Claims
Friday 6 January
US- Average Hourly Earnings M-o-M
US- Non-Farm Employment Change
US- Unemployment Rate
US- ISM Services PMI
Notable Events and News
Solana Jumps Back Above $11
After shedding more than $1 billion in market capitalization in the last week of 2022, Solana has bounced back to reclaim $11 after Ethereum co-founder Vitalik Buterin tweeted his support for the blockchain. Adding to the rally is hype from Solana’s new memecoin $BONK, which is seeing wide acceptance as a viable payment method on the different marketplaces hosted by the Solana network.
Lido Overtakes MakerDAO to have Highest TVL in DeFi
Liquid staking protocol Lido Finance overtook MakerDAO to achieve the highest total value locked (TVL) among other DeFi protocols. Lido’s model allows users access to liquid Ether staking without committing to the traditional 32 ETH minimum. According to Lido Finance’s website, it has $5.89b of Ethereum staked as of the time of writing.
Cameron Winklevoss Has Heated Spat with Barry Silbert Over Twitter
On 2 January, Gemini co-founder Cameron Winklevoss posted an open letter on Twitter to Barry Silbert, CEO of Digital Currency Group (DCG), claiming DCG owes Genesis money that it has not repaid, leading to the failure of Genesis to pay Gemini. Winklevoss has asked Silbert to “commit to solving this” by 8 January.
FTX Japan Users Able to Withdraw Assets Starting February
FTX Japan released a statement saying that users will be able to start moving their funds out of the collapsed cryptocurrency exchange starting in February. It said it was developing a system to resume withdrawals through the website of Liquid Japan, a crypto exchange it acquired earlier this year.
Market Insights
Market Technicals and OnChain Analysis
One of the other rising stars of last week is no doubt LDO. There have been moves of LDO holdings by Alameda wallets over the last week but what we saw is a surge in Open interest that followed. Total amount of ETH staked in Lido has crept up from 4.9m to 4.98m ETH. Similar comparisons have also been made comparing LDO and SNX as both ran during bear markets with low relative liquidity and in Lido’s case a massive user base.
This could still be a short term bounce however do be wary for those looking to short this move as funding rates are deeply negative at the moment, a nice set up for a possible opportunistic short squeeze on a project with a demonstrated use case
Looking at this chart above, Solana is another popular candidate that could (and has to some extent) started squeezing shorts.
Taking a step back, leverage ratio across the board have also started to form a base and creep up after the end of year deleveraging. Does this mean the crypto market is poised for a bounce in 2023? Not necessarily, since nothing has changed significantly macro wise though CPI/ inflation have been showing signs that it has found a top at least in the interim.
To end this week’s edition off this is one of the more popular charts going around Crypto Twitter, the yearly chart of Bitcoin. If the past is of ANY indication, this would mean 2023 could be the year where crypto forms an accumulation/ reversal followed by a bull market in 2024. In line with Bitcoin’s halving in 2024
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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.
