Markets week ahead: August 28 - September 3Last week in the news
Major weekly event, a Fed Chair speech at the Jackson Hole on Friday left the markets relatively volatile, as well as the US Treasury yields. At the same time the crypto market was traded in a flat mode. Bitcoin is ending the week around $26K, while Ether manages to hold above $1.6K.
Major event during the previous week was the Jackson Hall symposium, and speech of Fed Chair Powell as of the end of the conference. The markets were waiting for his speech with high interest, considering many opposite standing points of both analysts and economists in the US whether the country will be able to avoid a recession in the coming period and if the Fed will start to cut interest rates somewhere at the beginning of the year ahead. Fed Chair Powell stressed that the ultimate goal of Fed's policy is bringing inflation down to 2% target and that the Fed might increase interest rates to the higher levels if inflation remains persistent. The policy will remain restrictive “until inflation sustainably slowing”. Since some progress has been made, the Fed will proceed carefully but flexibly from this moment.
Negative news for Binance continues as Mastercard decided to end its partnership with this company, and will no longer offer cards in Latin America and the Middle East for Binance-brand. Binance's card issuer in Europe was Visa, however, this company also ended the business relationship with Binance during July. As per publicly available information, the rationale for such decisions is currently ongoing regulatory scrutiny of Binance in both the EU and the US. The company noted that only a small portion of its users will be affected by this decision, as customers are usually using Binance Pay, a “ borderless and secure cryptocurrency payment technology designed by Binance''.
The U.S. Treasury department finally proposed amendments to the tax law, by which, crypto brokers will be differentiated from the traditional brokerage companies. The new amendments also address the question regarding user’s personal data, which these companies should gather. Namely, based on the proposal, crypto companies will declare their tax obligation on a new form – called 1099-DA. Miners are excluded from this new form. Amendments are currently open for a public view and discussion, while its final adoption could be expected by the end of this year.
The Monetary Authority of Hong Kong will further explore possibilities of the bond market tokenization. This decision comes after the Government issued $100 million of tokenized green bonds in February this year. Their aim is to dig further into potential for increasing efficiency, liquidity and transparency of the bond market.
Crypto market cap
After the final break to the downside two weeks ago, the crypto market remained relatively quiet, in anticipation of the Fed Chair Powell speech at the Jackson Hall conference. Generally, markets did not hear anything new from his speech; however, it brought some modest optimism to the equity markets. The bottom line is that there is still a way to go when it comes to inflation, and the Fed might increase interest rates even higher if inflation remains persistent. The crypto market remained relatively flat during the week. Total crypto market capitalization was increased by modest $1B, actually, without much change from the week before. Daily trading volumes modestly increased to the level of SGX:43B on a daily basis, from $35B the week before. Total crypto market capitalization increase since the beginning of this year remained flat at level of 36%, where it has added total $274B to the market cap.
Crypto coins were traded relatively flat during the week, with modest movements in prices of coins. There were almost equal numbers of coins that finished the week on a positive and negative side. BTC managed to gain $2.5B in its market cap, which is an increase of 0.5% on a weekly basis. ETH was shiny down by $1.1B or 0.5%. XRP was one of the major winning coins during the week, with an increase in market cap of $1B or 4%. Few other coins with relatively solid performance on a weekly basis were Tron, with a gain of 4.85%, Miota was up by 2.5% and Litecoin with a modest surge of 2.1%. Several coins finished the week in red, like Filecoin, which was down by 7.7%, Uniswap lost 6.7% in its market cap and Solana decreased its value by 6.5%. As for coins in circulation, there also has not been too much change. Tron was the one coin whose coins in circulation were down by 0.1%, while Polkadot increased the number of its coins in circulation by 0.2%.
Crypto futures market
Although the crypto spot market remained relatively flat during the week, the crypto futures market went through some changes in investors long term perception for both BTC and ETH futures. Analysts from JPMorgan were commenting on current open interest on the crypto derivative markets and noted that current unwind of long positions can be perceived as they are in the end phase. “As a result we see limited downside for crypto markets over the near term”, as noted by a JPMorgan analyst. If that is the case, then traders might hope that September will be a better month for cryptos, than it was August.
BTC short term futures ended the week down around 1% on average, but the longer term ones suffered a huge drop of around 7% on a weekly basis. During the first part of August and major downturn, BTC long term futures were holding pretty steady, however, this is the first week when December 2024 dropped below $30K levels, ending the week at price of $29.145. At the same time, futures maturing in December this year were last traded at $26.730, or 0.63% lower from the week before.
With ETH futures the situation is a bit different, considering that almost all maturities dropped by more than 5% on a weekly basis. Futures maturing in December 2024 were last traded at price $1.793 or 5.13% lower from the week before, while those maturing in December this year were also down by 5.30% ending the week at price $1.684.
