CRYPTO week ahead: October 3 – 9

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Last week in the news

The US equity market finished another week in the red, after published PCE data for August showed that inflation is still not at its peak. This indicator is closely watched by the FED for better approximation of inflation, in which sense, some further monetary reaction from FED is most probable. Crypto market had a relatively flat week, with Bitcoin`s move back to $20K, while Ether continues to trade above $1.3K.
A cryptocurrency lender company Nexo, based in Zug, Switzerland, announced a transaction with Summit National Bank, based in the US, in which Nexo will take an undisclosed stake in this bank. Through this transaction Nexo will acquire a banking licence and a possibility to expand the offer of the crypto-backed loans to the US citizens. Within the company the deal is named as “industry-changing transaction”.

The winner of the bankruptcy auction for lender Voyager Digital is crypto exchanger FTX. The winning bid reached an amount of almost $1.4 billion, including Voyager’s digital assets amounting at $1.3 billion in fair value and $111 million of incremental value. However, this transaction does not include automatic repayments to the Voyager`s creditors, as they would need to go through court proceedings in order to receive their funds back.
The largest holder of Bitcoin, a technology company MicroStrategy, is expanding further into the crypto business based on bitcoin. The company is seeking to employ a professional who will build a Lightning Network-based software-as-a-service, shortly called SaaS platform. The aim of this platform is to increase the speed of funds transfers on the blockchain platform.

The world banking regulator, the Basel Committee on Banking Supervision, found in a survey that the total exposure of the 19 largest banks in the world toward crypto assets amounts to around $9 billion. The survey was sort of a back for Basel Committee for a revision of current capital regulation on banks, in which the Committee plans to impose stricter capital rules for banks exposed to un-backed currencies and stablecoins. At the same time, The Futures Industry Association, including some of the world's largest banks, is not satisfied with such new rules, as they will make a negative impact on banks, and limit their possibility to hedge risky assets, especially those banks involved in crypto clearing business.

A crypto exchanger Binance announced that it has officially registered and launched its operations in New Zealand on September 10th. A range of services will be now available for Kiwis like spot trading, staking, NFT`s and more as noted in the announcement.

Crypto market cap

Previous week was relatively flat on the crypto market. The market had stabilised after higher volatility during the previous period. Latest macro figures in the US are showing that the inflation has still not reached its peak, in which sense, markets are set for another rate hike by the FOMC. The latest published PCE data for the US had a negative impact on the US equity market, however, the crypto market remained relatively flat. This might be perceived in a positive manner, as it shows that investors still have more confidence in the crypto industry rather than in traditional markets. On the other hand, the risks of liquidity squeeze impact on the crypto market are still holding. Total crypto market capitalization has been modestly decreased during the previous week, by $7B or 1% on a weekly basis. Daily trading volumes have decreased to the level of $105B on a daily basis, from $120B traded during previous weeks. Total funds outflow from the beginning of this year remained flat, holding at level of $1.285B, which is a total drop of 59%.

Previous weeks' quite modest drop in total crypto market capitalization of 1% was mostly led by Ether and a few altcoins. Ether continues to lose in value after the Merge fork, decreasing its market cap by an additional 2% or $3B within a week. Ether was followed by Cardano, which had a drop in market cap by more than 6% or $1B. On the other hand, Bitcoin managed to modestly increase its cap by $3B, or 0.8%. There are also several altcoins who are gaining in the market popularity, like Maker, a coin which increased its total market value by 12% in a single week and Uniswap, with a surge of almost 12% in the market cap. As for coins in circulation, during the previous week there had not been significant changes. Filecoin continues to increase circulating coins, during the previous week by 0.2%, while Tether is for some time holding around 67.5B, continuing to be flat for several weeks by now.

Crypto futures market

After a few weeks of the negative market sentiment, during the previous week there had been some positive moves on the crypto futures market, mostly related to BTC futures. Short term BTC futures were traded higher by some 3% on average. Futures maturing in December this year were traded at the price modestly below $20K. Futures with longer maturity finished the week relatively flat compared to the week before, however, December 2023 managed to reach again the price above $20K.

ETH futures were traded relatively flat compared to the week before, with the highest price increase on a weekly basis of 5% for futures maturing in March next year. Futures with maturities as of the end of this year ended the week slightly above $1.3K. It is interesting to note with ETH futures, that prices for all maturities are within a range of $1.320 - $1.340. This is a clear indication that the market is still unsure regarding the future value of the ETH coin.

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