MARKETS week ahead: March 25 – 31Last week in the news
Based on the news from the previous week it seems that major central bankers are slowly reaching their pivotal point. The Fed`s view on potential three rate cuts during this year moved the markets to higher grounds. S&P 500 reached a new all time highest value at 5.234. The US Dollar gained during the week, while gold was holding grounds at levels above 2.150. The US Treasuries were also traded higher, with dropping yields. Bitcoin had another volatile week, still ending it above the $65K.
The FOMC meeting was held during the previous week which was closely watched by financial markets. As expected the Fed held its interest rates unchanged. However, after the meeting statement, Fed Chair Powell provided two important informations for markets. Firstly, he noted the possibility of three rate cuts during the course of this year, and secondly, FOMC members raised the US expected growth rate for year 2024 to 2.1% on an annual basis, from 1.4% previously projected. Although the majority of market participants perceived as positive news on rate cuts, there are still several scepticals on the topic. In this sense, officials from Vanguard asset management company expressed their view that the Fed will most probably keep the rates unchained till the end of this year and that the equity market in the US is currently overvalued. At the same time officials at Sycamore Tree Capital Partners also agreed that there is a high probability for no rate cuts this year. The CME FedWatch Tool notes market expectations of 68% chances that the first rate cut might occur in June this year.
Bitcoin ended another volatile week which was once again impacted by the sale from the Grayscale Bitcoin Trust (GBTC). As reported, total outflow from the fund on Thursday was $359 million. Analysis from Coinbase Institutional notes that GBTC selling is partially influenced by Genesis selling shares due to its bankruptcy process.
The US authorities led by SECs Chair Gary Gensler are planning further to dive into the regulation of the crypto market. During the previous week the US Securities and Exchange Commission, Commodity Futures Trading Commission and Treasury Department asked for additional funds for the year 2025 which will be used to attain 33 new employees with the goal to pursue further crypto currency businesses in the US into regulatory frame. In a speech during the week, SEC Chair Gensler noted that the crypto industry continues to be non-compliant with the US regulation and that they are “whittle away at the SEC's disclosure regime”.
BlackRock has turned its view to asset tokenization. As announced, they have created the first tokenized asset fund on Ethereum network. The fund`s name is Institutional Digital Liquidity fund and is represented by the BUIDL token, while the fund is fully backed by cash, US Treasuries and REPO agreements. The yield on the token will be paid through blockchain every day.
Crypto market cap
Ongoing positive market sentiment was additionally supported during the previous week through after the FOMC meeting statement. Although the Fed kept rates unchanged, still the most important news from the meeting of Fed`s officials was a potential three rate cuts till the end of this year. The Fed is planning further cuts also in 2025, until the rate finally reaches 2.6% as a “neutral” level perceived by the Fed. On the other hand, the crypto market continues to be highly volatile during the last two weeks. Although there is open market interest for crypto currencies and especially Bitcoin, still, some huge sales continue to occur. On one side, analysts are mentioning the closing of speculative positions, especially during the BTCs ATH. On the other hand, there are still huge sales occurring with Grayscale Bitcoin Trust (GBTC) shares, partially influenced by the Genesis sale due to its bankruptcy process. As it has been noted by analysts involved in a matter, this kind of BTC volatility might continue as there are still outstanding GBTC shares in Genesis bankruptcy process which will be sold in the future period.
During the week total crypto market capitalization dropped to the level of $2.2 trillion, however, has soon reverted to the upside, ending the week at level of $2.42 trillion. This level represents a 2% drop on a weekly basis, where $ 37B was wiped from the market. Daily trading volumes eased a bit, but still continue to be elevated around $172B on a daily basis. Total crypto market capitalization increase from the end of the previous year, currently stands at $782B, which represents a 48% surge from the beginning of this year.
The crypto market was traded in a mixed manner during the week. Although BTC had a significant drop in the value, still, the coin managed to finish the week with weekly outflow of $27B which is a drop in value of modest 2% on a weekly level. ETH was also following increased selling orders on the market, and ended the week by 5.6% lower from the week before, dropping its market cap by $24.3B. Solana was also on a losing side, dropping its value by 4.8%, or almost $4B. Binance Coin finished the week in red, by decreasing its market cap by $3.2B or 3.7%. Other altcoins with a drop in value during the week were OMG Network, who was down by 6.67%, Tron was down by 5.6%, Polygon lost 6.6% in value, while Algorand lost 6.4%. On the opposite side were coins with relatively solid weekly performance like Maker, which managed to gain even 15.8% in value, while DOGE ended the week 21% higher. Stellar and EOS gained around 4.5% both, while XRP gained 4.3% on a weekly level.
The increased activity with coins in circulation continues on the crypto market. During the previous week Polkadot added 10% new coins on the market, which was probably its highest increase on a weekly level. Tether continues to gain the market cap by increasing its coins in circulation by additional 0.7% on a weekly level. This week Miota managed to add 0.6% more coins to the market, while Filecoin`s coins were up by 0.4%.
Crypto futures market
The crypto futures market reacted to developments on the spot market during the previous week. Both BTC and ETH futures closed the trading week lower from the week before for all maturities. BTC`s short term futures were traded lower by more than 6%, while the longer term ones closed the week between 6.3% and 5.87% lower. Regardless of a drop, the futures prices are holding above $70K for maturities as of the end of this and next year. Futures maturing in December 2024 were last traded at $70.300, while those maturing a year later closed the week at $74.585.
ETH futures were traded lower around 9% for all maturities. Futures maturing in December this year were last traded at price $3.681, while those maturing in December 2025 ended the week at level $3.812. Same as BTC`s futures, on a positive side is that ETH futures are still managing to hold prices above the $3K.
