Newsletter

This Week in Crypto: 12th January 2023

BTC Markets

Welcome back!

We hope you had a wonderful break over the holidays and that you're feeling refreshed and ready for a successful new year.

As the trading year commences, we wanted to take the opportunity to thank you for your continued support by choosing BTC Markets as your crypto exchange.

We value your loyalty and aim to provide you with the highest level of customer service and access to one of the best trading platforms in the industry.

We're excited to be back, sharing the latest market moves and news to provide you with an edge in the market. If you need anything, please don't hesitate to reach out to us. We're always here to help.

Bitcoin Fear & Greed Index 

Bitcoin Fear and Greed Index is currently at 30 in the Fear zone, up 1 point from this time last week. The index reached a high of 30 today and a low of 25 on Saturday last week.

Summary:

  • Growth and inflation are likely to drive both volatility and opportunity in 2023’s global financial markets.
  • Crypto markets are likely to be most influenced by regulatory landscape and the macroeconomic backdrop in the year ahead.
  • After nearly two years of anticipation, Flare’s FLR tokens were finally distributed to XRP holders.
  • Ripple’s Managing Director for Europe expresses her confidence about the future for digital assets in the coming year.
  • Our CEO, Caroline Bowler, shared her thoughts on institutional adoption of blockchain technology and the status of regulation.

Market reflections

The global printing press came to a pause, causing growth to stagger and inflation to escalate in 2022. The S&P declined 18.1% and the Nasdaq fell 33.1%, marking 2022 as the 7th worst year for the S&P in the last 100 years. Apple and Amazon were the largest market cap losers, both shedding more than US$830 billion of market cap value. 2023 is expected to be an inflection point for the US economy, nuanced by declining inflation and macroeconomic crosswinds as global central banks aggressively raise interest rates to get a hold on runaway prices.

The market is expecting an S&P earnings recession to continue until the second half of 2023, with sales growth slowing to a near-zero pace by mid-year. Two additional rate hikes in 2023 and rate cuts between 4Q23 and 1Q24 are also priced in. Growth and inflation are likely to swing much faster due to large-scale fiscal stimulus, creating both volatility and opportunity in the market.

Despite general sentiment and headwinds, the markets showed strength leading into the New Year. During the week, market participants focused on key economic data releases, including the Consumer Price Index (CPI) on Thursday and U.S. bank earnings on Friday, with major banks such as JP Morgan, Citi, Bank of America, and Wells Fargo reporting.

To kick the year off, Wall Street led a global rally in stocks, fueled by the potential of easing inflation and optimism that Federal Reserve may not be as aggressive as some feared.

Asian markets rallied following China’s decision to fully reopen the economy, providing support to global nominal growth and heightened expectations of a robust recovery in 2023.

In Australia, monthly CPI lifted 7.3% in the twelve months to November. The most significant price rises included a 9.6% increase in housing, 9.4% in food and non-alcoholic beverages, and 9.0% in Transport.

Wednesday’s Australian monthly CPI report also showed that core prices, or the trimmed-mean gauge, climbed 5.6% in November compared with a forecast 5.5%. According to the RBA, the seasonally adjusted estimate for November 2022 retail trade data rose 1.4% month-on-month and lifted 7.7% relative to November 2021.The upcoming fourth-quarter release will occur on the 25th of January.

State of crypto

The digital asset majors started the year off to a positive start. Macro markets continue to be the core driver and Bitcoin’s correlation with the Nasdaq continued to be significantly positive. At the time of writing, Bitcoin was up 8.49% at US$17,950 and Ether was up 16.29% at US$1,390 in the first 12 days of the year.

The chart above shows the relative performance of Bitcoin, Ether, ETH/BTC, Bitcoin dominance by market cap, and total crypto market cap in 1hr increments from 1st January 2023.

Bitcoin dominance is often used to gauge general volume and rotation of liquidity in the crypto markets. When Bitcoin dominance is trending up, it indicates that traders are seeing expected value in price-action or safe haven in Bitcoin, rather than other crypto assets.

Bitcoin dominance by market capitalisation was down 2.13% from the start of the year, positioning Bitcoin at 41.20% dominance by market cap. As expected from Ether’s outperformance relative to Bitcoin, the ETH/BTC pair was up 7.30% at $0.078.

With total crypto market cap currently trading 10.92% higher, there is currently a capitalisation of US$838.63 billion in the crypto markets.

 

Crypto news

Flare airdrop to XRP holders.

Flare is now live and available to trade on BTC Markets! After nearly two years of anticipation by the XRP community, Flare’s FLR tokens were finally distributed to XRP holders.

Flare is a layer 1 Ethereum Virtual Machine (EVM) based blockchain which enables robust interoperability. The network is built with two open native interoperability protocols: the State Connector and the Flare Time Series Oracle (FTSO), which are designed to bring data to the chain, allowing for on-chain decentralised acquisition of blockchain and time series data.

Flare’s native token, FLR, is required for native payments and spam control at the network level. Technically, FLR’s purpose is to enforce transaction fees intended to reduce network spamming and other unessential transactions.

Learn more about Flare’s core functionalities, smart contracts, and low carbon footprint via the Flare network and FLR token whitepaper.

Trade FLR now.

2023 Regulatory Outlook Report.

Blockchain analytics provider, Elliptic, released a stand-out report which covered crypto policy and regulation for the year ahead. According to Elliptic’s ‘Regulatory Outlook Report,’ 2023 is primed to be another year of tremendous activity with regulators and policymakers set to explore new frontiers.

The report suggested that Markets in crypto assets (MiCA) will serve as a blueprint for regulators around the world. MiCA will likely have an impact that extends well beyond the EU’s borders due to its comprehensive nature and its detailed provisions around stablecoin issuance, market manipulation, custody, transaction reporting, and more.

Further, the report stated that regulators will likely take a more serious position regarding regulation in crypto, including decentralised finance (DeFi), decentralised autonomous organisations (DAOs), and even the metaverse.

Ex-Goldman launch crypto fund.

Former Goldman Sachs staffers, Nathan Allman and Pinku Surana launched their debut fund which will allow stablecoin holders to invest in US Treasuries and bonds. The fund will be segmented into three tokenised shares classes which will allocate a single exchange traded fund via Blackrock or Pacific Investment Management Co. (PIMCO).

Co-founder, Nathan Allman commented that “the crypto market is in desperate need of low-friction access to traditional capital markets. Large stablecoin holders, including start-ups and DAOs, are faced with a choice between having their purchasing power eroded away by inflation or taking too much risk with the current set of on-chain yield offerings.”

Ripple to expect increased TradFi.

Ripple’s Managing Director for Europe, Sendi Young, shared her insights regarding the state of crypto in 2023 and her confidence about the coming year. According to Young, 2023 will deliver activity which will strengthen the crypto and blockchain industries, with particular focus on TradFi related acquisitions.

Young stated, “firstly, despite the market downturn, institutional adoption of blockchain and digital assets will accelerate as corporations launch pilots and continue to investigate the technology. We’ll see increased industry consolidation as healthier companies make acquisitions to plug gaps in their own capabilities. 2023 will witness a greater adoption of fiat-backed stablecoins as institutions look to realise the benefits of blockchain tech such as real-time merchant settlement. The creation of new non-USD fiat currencies will also drive this trend.”

 

BTC Markets Updates

BTC Markets on Bloomberg.

Our CEO, Caroline Bowler joined Bloomberg News to discuss institutional adoption of blockchain technology, appetite for funding in crypto, and the status of regulation for the crypto industry in 2023.

Caroline shared her thoughts regarding regulation, innovation, and trading cycles, commenting that “I think in some sense, the fact that the heat has gone out of this crypto trading cycle is a good thing. I think it gives founders and those who are innovating within this space enough time and headspace. Rather than then chasing the market waves, instead they're getting a chance to really focus on the projects that they're working on.”

When referring to institutional activity, Caroline commented that “institutional interest is growing in this space, and without the roller coaster ride of a bull run, we're going to see a lot more maturity come in its absence.”

Staying safe - protect yourself online. 


Scams are on the rise in Australia, and some of them are targeting BTC Markets clients. We want to remind you of the importance of safe online practices, so that you can avoid falling victim to these scams. 

The most common scams right now include fake websites and social media posts that attempt to steal your personal information. Scammers may pose as representatives from companies that you interact with such as BTC Markets, and they use these fake sites to trick you into handing over your personal information. These sites often look like real websites with logos and addresses that make them appear like they're legitimate.

You should never give out your personal information or provide credit card information over email or social media messenger chats. We have a dedicated page on how to 'Protect Yourself Online', which we encourage you to read. Being informed and taking simple measures is the best action you can take to protect yourself and your account while online. The Australian government’s ‘Scam Watch’ website provides the latest information on how to recognise, avoid and report scams.

Disclaimer: The information provided in this email is for general purposes only. It should not be construed as professional financial advice from BTC Markets Pty Ltd. BTC Markets is not a financial adviser, and you should consider seeking independent legal, financial, taxation or other advice to ensure that the information relates to your unique circumstances. BTC Markets is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this information contained with this email.

Prices are accurate as of 11:00 AM EST, on 12/01/2023

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