DeFi tokens soar 30% on Trump win

Market update

7th November 2024

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BTC Markets in the news

AFR: Money piles into crypto as Trump leads polls.

Adding to the positive sentiment for digital assets was the shift in political dynamics in the US state of Ohio, where Republican Bernie Moreno was poised to unseat Democrat Sherrod Brown, one of the most vocal anti-crypto figures in Congress.

“As one of the largest critics of digital assets, Brown’s potential defeat is being seen as a win for the crypto industry, further boosting market optimism,” said BTC’s head of finance, Charlie Sherry.

Read the full article here

Cointelegraph: DeFi tokens soar 30% as traders tip ‘friendlier’ DeFi landscape under Trump.

“Until recently, DeFi tokens have been largely labeled as ‘useless governance tokens,’ tokens which serve no value other than voting on protocol changes via governance voting rights,” explained Charlie Sherry, head of finance and cryptocurrency analyst at BTC Markets, in comments to Cointelegraph.

“However, investors and tokenholders have been buying on the bet that one day, these protocols will be able to pass value back to the token through fees earned by the protocol.”

Sherry noted that such “value accrual mechanisms” haven’t been implemented because many DeFi protocols have feared enforcement action from the Securities and Exchange Commission, Sherry explained, pointing to the SEC’s probe into Uniswap Labs as a textbook example.

Donald Trump clinched the US presidency on Nov. 6 from Vice President Kamala Harris in a landslide victory, which could see a resignation from SEC Chair Gary Gensler as early as December or January, according to 10x Research.

Both of these together may have sparked a wave of “regulatory optimism,” Sherry said.

Explaining the value accrual mechanism further, Sherry said lending and borrowing protocol Aave’s “fee switch” proposal would be a “significant step toward creating intrinsic value” for AAVE tokenholders.

Similarly, Sherry noted a portion of fees from Uniswap’s new layer 2 Unichain will also flow to UNI tokenholders — “transforming UNI from a governance token into a utility asset and expanding its investment appeal.”

The DeFi protocols behind LIDO, ENA, MKR and Frax (FXS) could see similar “value-accruing” changes, too, Sherry pointed out.

Read the full article here

Market reflections

Australia

Housing approvals bounce back in September, but some states are still lagging.

In September, private house approvals in Australia saw a 2.2% increase, hitting 9,745 units, which matched expectations. This followed a similar jump of 2.2% in August. The rise was driven by solid growth in South Australia, Queensland, and Western Australia, where approvals climbed by 10.3%, 6.4%, and 5.9%, respectively. However, Victoria and New South Wales saw declines, with approvals dropping by 3.1% and 1.1%.

Looking at the bigger picture, total dwelling approvals across the country rose by 4.4% to 14,842 units in September, bouncing back from a 3.9% dip in August. The boost came mainly from a 4.7% jump in approvals for non-house dwellings, alongside the 2.2% growth in private house approvals. Regionally, Queensland, Western Australia, South Australia, and Victoria all saw strong increases, but New South Wales took a hit, with approvals down by 14.8%.

Overall, it looks like the housing market is on the mend, though the recovery isn’t uniform across all state, while some are seeing solid growth, others like New South Wales are struggling a bit.

Australia’s trade surplus shrinks as exports drop to 33-month low.

Australia’s trade surplus dropped to AU$4.61 billion in September, the smallest gain since March, falling short of market expectations for a surplus of AU$5.3 billion. Exports took a hit, falling by 4.3% to AU$40.83 billion, mainly due to weaker sales of mineral fuels and large declines in shipments to India, Indonesia, and Japan. Imports also dropped by 3.1% to AU$36.22 billion, reaching a nine-month low, driven mainly by a drop in fuel and lubricant purchases.

The export decline was led by non-rural goods like coal and mineral fuels, though rural exports saw a boost, particularly in meat sales. Imports of capital goods, like industrial transport equipment and machinery, saw a sharp decrease, while imports of consumer goods grew slightly. Interestingly, exports to China saw a small rise of 2.2%, contrasting with declines to other key trading partners.

This trade data points to a slowdown in both domestic and global demand for goods, suggesting that Australia’s economic growth could be under pressure. The narrowing trade surplus could have wider implications for economic policy, especially if the trend continues or inflationary pressures persist.

Global

Canadian economic growth slows in October as inflation heats up.

The Ivey Purchasing Managers Index for Canada dropped slightly to 52 in October, down from 53.1 in September and below the expected 54.2, hinting that while the economy kept growing, it was at a slower pace. Employment growth showed a small dip, and inventory levels fell, reflecting a more cautious approach in business activity. At the same time, price pressures crept up, signalling increased inflation concerns as companies faced rising costs. This mix of easing growth and rising prices suggests that businesses and consumers may need to prepare for a more restrained economic environment ahead.

China's trade surplus jumps in October, exports surge.

China’s trade surplus soared to US$95.27 billion in October, up from US$56.13 billion a year earlier, significantly exceeding expectations of US$75.1 billion. This marked the largest surplus since June, driven by a 12.7% surge in exports, the fastest pace since July 2022. The boost came as manufacturers rushed to fulfil orders in anticipation of higher tariffs from the US and the EU.

Meanwhile, imports fell by 2.3%, reversing a modest 0.3% increase in September and missing expectations of a 1.5% drop, indicating ongoing weakness in domestic demand. China’s trade surplus with the US widened slightly to US$33.50 billion in October, compared to US$33.33 billion in September.

For the first ten months of 2024, China’s trade surplus reached US$785.3 billion, with exports rising by 5.1% to US$2.93 trillion and imports growing more slowly by 1.7% to US$2.14 trillion. The trade surplus with the US during this period stood at US$291.38 billion.

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