Bitcoin Fear & Greed Index
The Bitcoin Fear and Greed Index is currently at 51 in the Neutral zone, up 6 points from this time last week. The index reached a high of 53 on Saturday and a low of 45 on Thursday last week.
- Solana is coming to BTC Markets on Wednesday, February 1st.
- Bitcoin and Ethereum consolidate at higher levels, above US$22,500 and US$1,500 respectively.
- Global central bank policy and earnings season drive action in major global markets.
- Macro volatility paints a mixed picture of strong price-appreciation against increased talks of recession in major economies.
- Banks race toward a tokenised future.
Several high impact data releases are scheduled in the week ahead, including US producer prices and year-over-year inflation rates coming from Australia, Japan, and Canada. Month-over-month consumer confidence will be handed down in the United Kingdom and in Germany.
Additionally, US earnings season will continue in the upcoming week with major companies issuing results including Tesla, Spotify, Meta, Amazon, Apple, and more.
In the past week, macro market volatility provided a complex and nuanced backdrop in the global financial markets.
Market participants showed optimism toward a potential recovery in 2023 driven by cooling inflation, lower energy prices, and overall improved sentiment. Early hopes of a soft landing in the US economy drove share markets higher, however, an increased pace of contraction suggested the economy was losing short-term momentum.
Technology stocks led gains in European markets and energy prices declined, further fueling hopes that Europe would avoid a deep recession.
Asian financial markets continued their move to the upside, led by an improved outlook that China’s economy would fully recover in 2023. Share markets in China and Hong Kong posted a strong start to the year and tested 6-month highs, only to slow for a week-long celebration of Lunar New Year.
Local share markets in Australia continued higher toward new all-time highs, posting the second-best start to a year in over three decades.
As major markets exhibited unparalleled strength against macro volatility, differing perspectives revealed mixed sentiment; were markets seeing the start of a new cycle regime or just another bear market rally?
Investors and money managers began to rotate out of defensives and into a risk-on bias leading into earnings season, but price action perplexed many market participants. For example, Microsoft shares lifted 4% following the company’s worst revenue growth since 2016 and its slowest sales growth in six years. Google shares lifted 5% following news that they would lay off 12,000 employees.
Mike McGlone, Senior Macro Strategist for Bloomberg Intelligence, commented that the US is “heading toward a recession, that’s almost indisputable, the question is how we prevent that. I don’t know what’s going to prevent it and the key fact I like to point out is this is a very rare situation that we have the most central banks in history tightening into a recession.”
Leading global investment manager, BlackRock shared their view that the market view appears too rosy for now, stating that “markets are feeling optimistic: China’s reopening, energy prices are falling, inflation is cooling. That all reinforces our positive long-term view on equities. But we’re underweight in the near term. We think that optimism has come too soon.”
State of crypto
The digital asset majors continued to consolidate at higher levels, attempting to establish support aboveUS$22,500 for Bitcoin and US$1,500 for Ether.
At the time of writing, Bitcoin was up 36.95% at US$22,638 and Ether was up 30.25% at US$1,556 in 2023.
Over the past two weeks, prices drove Bitcoin’s dominance of market capitalisation to 7-month highs of 44.65% dominance. At the peak of local highs, Total crypto market cap toppedUS$1.02 trillion before pulling back to US$977 billion.
As expected in Bitcoin’s outperformance of Ether over the past two weeks, the ETH/BTC pair pulled back to US$0.07.
The chart below 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.
Banks race for tokenised future.
According to global consulting firm, Boston Consulting Group, blockchain enabled tokenised assets could reach capitalisation upwards of US$16 trillion by 2030. A key driver of institutional involvement in tokenisation extends far beyond stablecoins and crypto assets.
In addition to digital assets like Bitcoin, Ethereum, and Tether, hard assets like commodities and property are becoming increasingly digitised to improve liquidity in otherwise illiquid markets. Persistent adoption of blockchain technology by financial institutions and the recognition of competitive advantage over traditional payment systems continues to drive the bank race.
Dr. Tony Richards, Chairman of the Digital Finance CBDC committee stated that “there will be increasing tokenisation of all sorts of assets to facilitate trading of those assets, both in traditional asset classes and new ones that are not tradeable right now. Bringing liquidity to new asset classes will enable new investment products and new risk management opportunities.”
NAB launches stablecoin.
National Australia Bank (NAB) has created a new stablecoin, AUDN, which will allow corporate customers to settle transactions in real-time using blockchain technology. Intended to launch mid-2023, AUDN will enable faster transactions, international payments, and improved efficiency of settlement processes.
NAB’s Chief Innovation Officer, Howard Silby commented that “We certainly believe there are elements of blockchain technology that will form part of the future of finance. That continues to be the source of some debate. But certainly, from our point of view, we see blockchain has the potential to deliver instantaneous, transparent, inclusive, financial outcomes.”
AUDN will be fully backed one-to-one with the Australian dollar and will be built on the Ethereum network. Given their well trusted and highly regulated standing, NAB has been working closely with Australian regulators whilst also enabling innovation of the digital economy.
When referring to the regulatory landscape, Silby stated that NAB has a “strong regulatory framework for banking. How digital assets will be treated is still emerging. But what is clear is it is less about the tech and more about whether companies in the space have governance practices, separation of duties, and understand differences in custody and trading. These are things banks are well experienced at.”
BTC Markets Updates
Solana (SOL) is coming to BTC Markets!
We are excited to announce that BTC Markets will be listing Solana (SOL) on our platform.
In preparation for the launch, deposits, withdrawals, and post-only orders will be enabled on Tuesday, January 31st with the market scheduled to go fully live on Wednesday, February 1st.
Solana is a blockchain platform that is designed to bring blockchain technology to the masses. It is fast, scalable, and energy-efficient, making it an excellent choice for developers and users alike.
One of the most striking features of Solana is its speed. With block times of just 400 milliseconds, Solana can process transactions much faster than most other blockchain networks. This development represents a significant advancement for users, as it eliminates the need for prolonged waiting times for transaction processing.
Learn more about SOL.
BTC Markets in Cointelegraph.
Our CEO, Caroline Bowler provided commentary in a recent Cointelegraph article which covered crypto regulation. When addressing a potentially overly prescriptive approach to regulation, Caroline commented that “this may put our digital economy on the back foot, in time, smothering our international competitiveness.”
The crypto industry in Australia has been agitating for the appropriate regulation in the digital asset sector for the past couple of years. BTC Markets worked closely with the cross-party senate committee in 2021, contributing to their report on Australia as a financial and technology centre.
The bipartisan recommendations included a regulatory framework, with Treasury oversight of crypto exchanges. This approach would provide proportionate investor protections and solidify Australia's leading international position in this sector.
The European model of "regulating innovation in rather than out" leaves flexibility and room for the inevitable changes in our fast-paced industry. BTC Markets welcomes the opportunity to continue our consultations with government and regulators on these vital issues.
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.
Beware of scam callers pretending to be from BTC Markets! We will never cold call you asking you to make investments, for verification codes, passwords, or to transfer funds. If you receive a call from someone claiming to be from BTC Markets, please do not engage with them and instead raise a support ticket through the platform for further assistance.
The most common scams right now include fake websites, social media posts, and scam callers 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 AEDT, on 25/01/2023