Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good morning!
Bitcoin (BTC) and Ethereum (ETH) are up/down +1.3% and -3.4% on the week.
- BTC/USD: 26,058, +1.01%
- ETH/USD: 1,749, -3.58%
- US02Y: 4.56%, +7bps
- DXY: 103.34, -0.47%
- GOLD (USD/OZ): 1,959, -0.1%
- NDX: 14,784, +1.57%
- VIX: 15, +1.9%
- VVIX: 93.02, +8.45%
Macroeconomic developments
This week's macro landscape is brimming with events and developments. Today, the focus is on the US CPI, while Wednesday brings the US PPI and the eagerly anticipated FOMC rate decision, followed by the subsequent press release. Amidst all this, outside of the cryptocurrency realm, the volatility complex appears to be relatively calm. Equities are soaring higher in a risk-on environment, propelled by a select group of technology companies. Interest rate traders suggest that the Fed might go with a pause in their actions this week.
Nonetheless, this pause should not be mistaken for the end of tightening measures. Traders currently anticipate that the Fed will raise rates by another 25 bps during their July meeting. Similar to the previous instances of cryptocurrency turmoil experienced in recent years, the spot prices of cryptocurrencies are currently driven by idiosyncratic risk factors. The focus lies on their decentralised nature and the determination of whether they qualify as securities.
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Altcoins are in freefall due to SEC lawsuits
Despite the controversies surrounding the SEC, both Bitcoin (BTC) and Ethereum (ETH) demonstrated resilience and maintained their value, while most alternative Layer-1 cryptocurrencies experienced a decline of around 20% to 30% compared to the previous week. It seems evident now that Gensler's opposition to cryptocurrencies is driven more by political motives and media attention rather than genuine investor protection.
"We don't require additional digital currencies because we already have them. The US dollar, euro, and yuan are all digital now." - Gary Gensler, Securities and Exchange Commission Chair
Ironically, it has come to light that the US government relied on Coinbase to sell seized digital assets. The substantial impact of last week's headlines serves as a testament to the significant presence of retail investors that still exists in this market.
There is a dark cloud hovering over digital assets, and should they fall into the category of securities in the US and potentially in Europe, this would cause a short-term liquidity shock/one-way market that would cause market prices to drop drastically. Having said that, the total market capitalisation of cryptocurrencies excluding BTC and ETH currently stands at $311.94 billion at post-FTX levels, signalling an opportune moment for long-term crypto believers to enter the market.
Happy Trading!
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Disclaimer
This publication provided by Crypto Broker AG, a corporate entity registered under Swiss law, is published for information purposes only. This publication shall not constitute any investment advice respectively does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. This publication is not intended for solicitation purposes but only for use as general information. All descriptions, examples and calculations contained in this publication are for illustrative purposes only. While reasonable care has been taken in the preparation of this publication to provide details that are accurate and not misleading at the time of publication, Crypto Broker AG (a) does not make any representations or warranties regarding the information contained herein, whether express or implied, including without limitation any implied warranty of merchantability or fitness for a particular purpose or any warranty with respect to the accuracy, correctness, quality, completeness or timeliness of such information, and (b) shall not be responsible or liable for any third party’s use of any information contained herein under any circumstances, including, without limitation, in connection with actual trading or otherwise or for any errors or omissions contained in this publication.
Risk disclosure
Investments in virtual currencies are high-risk investments with the risk of total loss of the investment and you should not invest in virtual currencies unless you understand and can bear the risks involved with such investments. No information provided in this publication shall constitute investment advice. Crypto Broker AG excludes its liability for any losses arising from the use of, or reliance on, information provided in this publication.
