MARKETS week ahead: March 11 – 16
Last week in the news
Another week since the beginning of this year with markets reaching new all time highest values. The US equity markets continue to be driven by tech companies and expectations of the first Fed's rate cut. During the previous week Bitcoin also breached its highest level from November 2021, reaching shortly the level of 70K. Gold continues to reflect expectations on the future rate cuts and hence, weakening of the USD, reaching also an ATH at $2.185. Even US Treasury prices are rising, bringing yields to the lower grounds. The only asset which lost some of its value was the US dollar.
There have been several important topics during the previous week which drove the markets to the higher grounds, but all of them correlate to only one point – rate cuts are expected during the course of this year. Fed Chair Powell testimony before the Senate Banking Committee during the previous week revealed Powell`s and Fed`s expectations that the rate cuts are likely to occur at “some point” during this year. This was in line with market expectations but also Fed`s forecasts. The second weekly topic was related to the release of jobs data in the US, which showed a modestly increased unemployment rate from 3.7% up to 3.9% in February. Since Fed's decisions are data driven, it was a clear sign for the markets that rate cuts are coming. Current odds, of around 80%, show expectations that the first rate cut might occur in June.
As markets are in a hype mood over AI and BTC ETF, economists are pointing to emerging evidence on a potential new wave of inflation. January inflation in the US of 3.1% y/y came above market expectations. A well known economist, Nouriel Roubini stressed once again a potential for stagflation, especially after elections in the US, as of the end of this year. Stagflation represents the state of an economy dominated by high inflation and low economic output. JPMorgan analysts have also recently pointed to a higher potential for stagflation in the coming period, comparing it with the one experienced during the 1970s.
Fed Chair Powell testimony during the previous week brought to the light another interesting information for the crypto community. Namely, he answered a question related to potential introduction of the central bank digital currency in the US, where he clearly stated that the Fed is not going to recommend any digital dollar in the near future, and that the Fed does not have interest for any kind of system which would provide a view in user`s data to officials.
News is reporting that BlackRock, the largest asset manager in the world, has filed SEC company's plans to make purchases of bitcoin exchange traded products for its Global Allocation Fund. The ETPs also include its own exchange traded fund, IBIT.
Crypto market cap
Although Bitcoin accomplished another milestone for this year with a new all time highest level, the total crypto market capitalization is still on the way to this target. The highest market capitalization reached $3 trillion in November 2021, while current level of capitalisation stands at $2.5 trillion. Investors' interest for placement of funds into riskier assets was certainly supported by the approval of the first BTC ETF, but also by expectations of Fed's first rate cut during the course of this year. Developments in the macro segment during the previous week, in terms of Fed Chair Powell testimony in which he noted a “at some point” move toward the decrease of interest rates, as well as increase in unemployment rate in the US in February, increased investors confidence over the future course of the US economy. Total crypto market capitalization was increased by 11% on a weekly level, with total inflow of 255B. Daily trading volumes remained elevated, reaching their highest weekly level at 495B on Wednesday`s trading session. Total crypto market capitalization increase from the end of the previous year, currently stands at 881B which represents a 54% surge from the beginning of this year.
There have been two milestones accomplished on the crypto market during the previous week, related to major coins. First Bitcoin reached its all time highest level, by reaching the level of 70K, while the second milestone is related to ETH, which managed to surge till the level of 4K. When it comes to performance in a relative terms, ETH outperformed BTC during the week, by increasing its market cap by 14.5%, while BTC was up by 10.6%. However, in nominal terms, BTC added 129B to its total value, while ETH`s surge in cap was around 60B. Majority of other altcoins also had excellent performing week. DOGE gained 4.5B in value, increasing it by 23%. Solana is still gaining investors attention, with an increase of 8.5B in value or almost 15% on a weekly basis. Binance Coin should also be mentioned as an excellent weekly performer with a surge in value of more than 19%, adding around 11.7B to its cap. In nominal terms Theta gained $ 1B, however, it represented almost 47% increase in its market capitalization. Filecoin managed to add almost 30% to its value during the week. There have been only a few losing coins, few of which were Tron with a modest drop in value of 3.2%, while LINK was down by 5.7%. Interestingly, XRP also managed to decrease its value by 0.96% w/w.
Increased activity with coins in circulation continues. During the previous week Filecoin gained 0.7% of new coins on the market, while Miota`s increase in coins was 0.6% on a weekly basis. Tether continues with a strong increase of the circulating coins, adding 2.4% during the previous week (1.3% a week before). Interestingly, Polkadot decreased its circulating coins by -1.9% on a weekly basis, after it had an increase of 2.3% two weeks ago.
Crypto futures market
There was another week in a row with significant moves on the crypto futures market for both BTC and ETH futures. In line with the BTC`s reach of new all-time highest value, the short term futures followed this path, finishing the week around the 70K level, which was an increase of around 8.7% on a weekly level. Longer term BTC futures surged between 9% and 14.6%. BTC futures maturing in December this year were last traded at price 76K, while those maturing a year later closed the week at $77.535 on the CME.
This week ETH futures gained more in relative terms from BTC futures. ETH short term futures were traded around 14% higher from the week before, while the longer term ones were traded above 15% higher for all maturities. Futures maturing in December this year were last traded at $4.164, and those maturing in December next year, ended the week at $4.363.
Another week since the beginning of this year with markets reaching new all time highest values. The US equity markets continue to be driven by tech companies and expectations of the first Fed's rate cut. During the previous week Bitcoin also breached its highest level from November 2021, reaching shortly the level of 70K. Gold continues to reflect expectations on the future rate cuts and hence, weakening of the USD, reaching also an ATH at $2.185. Even US Treasury prices are rising, bringing yields to the lower grounds. The only asset which lost some of its value was the US dollar.
There have been several important topics during the previous week which drove the markets to the higher grounds, but all of them correlate to only one point – rate cuts are expected during the course of this year. Fed Chair Powell testimony before the Senate Banking Committee during the previous week revealed Powell`s and Fed`s expectations that the rate cuts are likely to occur at “some point” during this year. This was in line with market expectations but also Fed`s forecasts. The second weekly topic was related to the release of jobs data in the US, which showed a modestly increased unemployment rate from 3.7% up to 3.9% in February. Since Fed's decisions are data driven, it was a clear sign for the markets that rate cuts are coming. Current odds, of around 80%, show expectations that the first rate cut might occur in June.
As markets are in a hype mood over AI and BTC ETF, economists are pointing to emerging evidence on a potential new wave of inflation. January inflation in the US of 3.1% y/y came above market expectations. A well known economist, Nouriel Roubini stressed once again a potential for stagflation, especially after elections in the US, as of the end of this year. Stagflation represents the state of an economy dominated by high inflation and low economic output. JPMorgan analysts have also recently pointed to a higher potential for stagflation in the coming period, comparing it with the one experienced during the 1970s.
Fed Chair Powell testimony during the previous week brought to the light another interesting information for the crypto community. Namely, he answered a question related to potential introduction of the central bank digital currency in the US, where he clearly stated that the Fed is not going to recommend any digital dollar in the near future, and that the Fed does not have interest for any kind of system which would provide a view in user`s data to officials.
News is reporting that BlackRock, the largest asset manager in the world, has filed SEC company's plans to make purchases of bitcoin exchange traded products for its Global Allocation Fund. The ETPs also include its own exchange traded fund, IBIT.
Crypto market cap
Although Bitcoin accomplished another milestone for this year with a new all time highest level, the total crypto market capitalization is still on the way to this target. The highest market capitalization reached $3 trillion in November 2021, while current level of capitalisation stands at $2.5 trillion. Investors' interest for placement of funds into riskier assets was certainly supported by the approval of the first BTC ETF, but also by expectations of Fed's first rate cut during the course of this year. Developments in the macro segment during the previous week, in terms of Fed Chair Powell testimony in which he noted a “at some point” move toward the decrease of interest rates, as well as increase in unemployment rate in the US in February, increased investors confidence over the future course of the US economy. Total crypto market capitalization was increased by 11% on a weekly level, with total inflow of 255B. Daily trading volumes remained elevated, reaching their highest weekly level at 495B on Wednesday`s trading session. Total crypto market capitalization increase from the end of the previous year, currently stands at 881B which represents a 54% surge from the beginning of this year.
There have been two milestones accomplished on the crypto market during the previous week, related to major coins. First Bitcoin reached its all time highest level, by reaching the level of 70K, while the second milestone is related to ETH, which managed to surge till the level of 4K. When it comes to performance in a relative terms, ETH outperformed BTC during the week, by increasing its market cap by 14.5%, while BTC was up by 10.6%. However, in nominal terms, BTC added 129B to its total value, while ETH`s surge in cap was around 60B. Majority of other altcoins also had excellent performing week. DOGE gained 4.5B in value, increasing it by 23%. Solana is still gaining investors attention, with an increase of 8.5B in value or almost 15% on a weekly basis. Binance Coin should also be mentioned as an excellent weekly performer with a surge in value of more than 19%, adding around 11.7B to its cap. In nominal terms Theta gained $ 1B, however, it represented almost 47% increase in its market capitalization. Filecoin managed to add almost 30% to its value during the week. There have been only a few losing coins, few of which were Tron with a modest drop in value of 3.2%, while LINK was down by 5.7%. Interestingly, XRP also managed to decrease its value by 0.96% w/w.
Increased activity with coins in circulation continues. During the previous week Filecoin gained 0.7% of new coins on the market, while Miota`s increase in coins was 0.6% on a weekly basis. Tether continues with a strong increase of the circulating coins, adding 2.4% during the previous week (1.3% a week before). Interestingly, Polkadot decreased its circulating coins by -1.9% on a weekly basis, after it had an increase of 2.3% two weeks ago.
Crypto futures market
There was another week in a row with significant moves on the crypto futures market for both BTC and ETH futures. In line with the BTC`s reach of new all-time highest value, the short term futures followed this path, finishing the week around the 70K level, which was an increase of around 8.7% on a weekly level. Longer term BTC futures surged between 9% and 14.6%. BTC futures maturing in December this year were last traded at price 76K, while those maturing a year later closed the week at $77.535 on the CME.
This week ETH futures gained more in relative terms from BTC futures. ETH short term futures were traded around 14% higher from the week before, while the longer term ones were traded above 15% higher for all maturities. Futures maturing in December this year were last traded at $4.164, and those maturing in December next year, ended the week at $4.363.
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