Last week in the news
The FED has once again moved the markets to the negative territory. Another rate increase of 75bps and potential for another one in July, encouraged another sell off on the markets during the previous week. Bitcoin slipped below $20K support and Ether is modestly below $1K.
At the FOMC meeting held during the previous week, the US reference interest rate has been additionally increased by 75bps. In a Statement, FED` Chair Powell noted that there is possibility for rates to be additionally increased during July`s FOMC meeting for additional 50bps or 75bps, which will depend on macro data. The ultimate goal is to bring US inflation down to the strategic level of 2%, and this fight will be “unconditional” as Powell stressed.
During the Conference after the FOMC meeting, Fed Chair Powell also commented that US financial stability is necessary to support USD as a global currency. He specifically mentioned the introduction of digital currencies and instant payment systems which are expected to be launched by the year 2023, similar to the FedNow. Analysts are noting that such systems will support USD as a world's reserve currency.
Coinbase sent a letter to its employees noting that some 18% of jobs in the company will be cut. Company's CEO, Brian Armstrong, stressed the possibility of a recession, in which sense, the company needs to prepare for such a business environment.
Analysts are concerned that one of the highest bets on Bitcoin in the history of this market, a company MicroStrategy could suffer huge losses considering the latest high drop in BTC value. They are most concerned about margin calls if BTC falls below $21.000, which would force MicroStrategy to liquidate some of their BTC holdings. The CEO of the company, Michael Saylor, commented on Twitter that the company “has 115.109BTC that it can pledge”, in which sense, they have prepared for high volatility in the value of BTC.
Binance issued a statement on Friday, noting that the company has stopped transfers through Brazilian payment system Pix, since they terminated cooperation with Capital, a Brazilian payment operator. This comes as a response to changes in policy of the Brazilian Central Bank.
Crypto market cap
As the FED made a promise a few months ago that they will use aggressive monetary policy in order to fight surging inflation, this promise came to reality within two previous FOMC meetings. Strong reference rate increase will continue probably in July, as Fed Chair Powell noted. In the Statement after the meeting he briefly mentioned that the Fed is currently targeting level of interest rates at 3,5%-4% probably during the course of this and next year, however, it will all depend on the macro figures in the coming period. At the same time, FED started decreasing the size of its balance sheet, pulling the liquidity out of the system. Such rhetoric and moves from the FED turned financial markets further to the sell-off. Total crypto market capitalization decreased by 30% during the previous week, erasing additional $350 billion from the market. Market cap dropped below $1 trillion, reaching almost $800 billion, a level from December 2020. Daily trading volumes were flat, moving around $125B on a daily basis. Total outflow from the beginning of this year went modestly above $1.4B, which is a decrease of 64%.
During the previous week all coins were traded in red with significant outflow of funds from the crypto market. The highest outflow in nominal amounts was led by the leading coins. Bitcoin was down by $195B which is a decrease of 36%. BTC is followed by Ether, with a loss in market cap of $72B or 38%. Binance Coin was also negatively affected as the coin decreased its market cap by $13B or 28%. Tether continues to decrease its coins in circulation, losing additional 6% during the previous week and reaching a level of $68 billion coins.
Crypto futures market
FED`s aggressive policy is making its hard impact also on the futures market. BTC futures were traded lower by some 30% for all maturities. Market expectations for BTC`s price as of the end of this year are strongly downgraded from a week before, and were traded modestly above $21K. Maturities for the end of the next year were lower by $10K, reaching $23K.
ETH futures suffered a higher drop in price, where shorter maturities were down by 35%, while longer maturities were down by almost 40%. Prices of futures for the end of this year reached level of $1.1K, while for maturities as of the end of next year were modestly higher, moving around $1.2K.
Table below provides the most recent information on BTC and ETH future prices.
https://ibb.co/khkwg3K
The FED has once again moved the markets to the negative territory. Another rate increase of 75bps and potential for another one in July, encouraged another sell off on the markets during the previous week. Bitcoin slipped below $20K support and Ether is modestly below $1K.
At the FOMC meeting held during the previous week, the US reference interest rate has been additionally increased by 75bps. In a Statement, FED` Chair Powell noted that there is possibility for rates to be additionally increased during July`s FOMC meeting for additional 50bps or 75bps, which will depend on macro data. The ultimate goal is to bring US inflation down to the strategic level of 2%, and this fight will be “unconditional” as Powell stressed.
During the Conference after the FOMC meeting, Fed Chair Powell also commented that US financial stability is necessary to support USD as a global currency. He specifically mentioned the introduction of digital currencies and instant payment systems which are expected to be launched by the year 2023, similar to the FedNow. Analysts are noting that such systems will support USD as a world's reserve currency.
Coinbase sent a letter to its employees noting that some 18% of jobs in the company will be cut. Company's CEO, Brian Armstrong, stressed the possibility of a recession, in which sense, the company needs to prepare for such a business environment.
Analysts are concerned that one of the highest bets on Bitcoin in the history of this market, a company MicroStrategy could suffer huge losses considering the latest high drop in BTC value. They are most concerned about margin calls if BTC falls below $21.000, which would force MicroStrategy to liquidate some of their BTC holdings. The CEO of the company, Michael Saylor, commented on Twitter that the company “has 115.109BTC that it can pledge”, in which sense, they have prepared for high volatility in the value of BTC.
Binance issued a statement on Friday, noting that the company has stopped transfers through Brazilian payment system Pix, since they terminated cooperation with Capital, a Brazilian payment operator. This comes as a response to changes in policy of the Brazilian Central Bank.
Crypto market cap
As the FED made a promise a few months ago that they will use aggressive monetary policy in order to fight surging inflation, this promise came to reality within two previous FOMC meetings. Strong reference rate increase will continue probably in July, as Fed Chair Powell noted. In the Statement after the meeting he briefly mentioned that the Fed is currently targeting level of interest rates at 3,5%-4% probably during the course of this and next year, however, it will all depend on the macro figures in the coming period. At the same time, FED started decreasing the size of its balance sheet, pulling the liquidity out of the system. Such rhetoric and moves from the FED turned financial markets further to the sell-off. Total crypto market capitalization decreased by 30% during the previous week, erasing additional $350 billion from the market. Market cap dropped below $1 trillion, reaching almost $800 billion, a level from December 2020. Daily trading volumes were flat, moving around $125B on a daily basis. Total outflow from the beginning of this year went modestly above $1.4B, which is a decrease of 64%.
During the previous week all coins were traded in red with significant outflow of funds from the crypto market. The highest outflow in nominal amounts was led by the leading coins. Bitcoin was down by $195B which is a decrease of 36%. BTC is followed by Ether, with a loss in market cap of $72B or 38%. Binance Coin was also negatively affected as the coin decreased its market cap by $13B or 28%. Tether continues to decrease its coins in circulation, losing additional 6% during the previous week and reaching a level of $68 billion coins.
Crypto futures market
FED`s aggressive policy is making its hard impact also on the futures market. BTC futures were traded lower by some 30% for all maturities. Market expectations for BTC`s price as of the end of this year are strongly downgraded from a week before, and were traded modestly above $21K. Maturities for the end of the next year were lower by $10K, reaching $23K.
ETH futures suffered a higher drop in price, where shorter maturities were down by 35%, while longer maturities were down by almost 40%. Prices of futures for the end of this year reached level of $1.1K, while for maturities as of the end of next year were modestly higher, moving around $1.2K.
Table below provides the most recent information on BTC and ETH future prices.
https://ibb.co/khkwg3K
