Crypto MarketLast week on August 19, the value of long liquidations was the second highest it has been for the past three months at $538.2 million. This surge of liquidations came after prices of many crypto assets fell last week. BTC fell from $23.2k to $20.8k and ETH fell from $1.85k to $1.6k from the 18th to the 19th, marking the sharpest drops between closing prices of the past month for both assets. Since then BTC has found support at around $21.5k and ETH has now reclaimed $1,700.From an on-chain perspective, the total transferred volume out of Crypto-assets Trading Platforms (CTPs) has increased since July's 41% decrease month-over-month, driven by the combination of buy orders surpassing $10 million, meaning big players are currently accumulating large amounts of Bitcoin and withdrawing them from CTPs; potentially trying to limit the selling pressure from August 19. Four weeks from now, Ethereum will be in a post-merge world. The merge is a plan to transition the Ethereum blockchain from proof-of-work to proof-of-stake, with a goal to slash the blockchain's energy consumption and lay the ground for it to be more productive in the future. Issuance will be reduced by a projected -90% and net inflation will virtually become neutral, if not negative. This could create a compelling case for ETH as a monetary asset in an increasingly inflationary world. Fiat is currently inflating at 12.8% per year and Gold sits at 1.79%. After the next Bitcoin halving in 2024, BTC's inflation rate will be 0.88%. After the merge, ETH issuance falls to 0.18% based on current demand levels where it could potentially go negative if demand recovers to same the levels as a few months ago.MacroAs of late, there's been more to be optimistic about. The extreme pessimism of the first half of 2022 seems a distant memory. War in Europe, runaway inflation, a coming collapse in corporate profits, and a behind-the-curve Federal Reserve forced to push the economy into recession. However, since mid June, the S&P 500 index has climbed 17%. Market participants are closely looking at data being released to see if there is deteriorating economic activity with rising unemployment in a high inflation environment. If so, the Fed would have to weigh its inflation fight against supporting a faltering economy.The U.S. economy contracted in July as manufacturing output dropped modestly and the service sector recorded a sharp decline in activity, data from a purchasing managers survey showed Tuesday. The S&P Global Flash Composite Output Index fell to 45.0 in August from 47.7 in July. The rate of decline was the sharpest since the initial stages of the pandemic. The downturn was led by a steep drop in service sector activity, although production at manufacturers also fell marginally. The flash U.S. services PMI fell to 44.1 in August from 47.3 in July, missing the 49.0 consensus forecast from economists polled by The Wall Street Journal. The U.S. manufacturing PMI fell to 51.3 in August from 52.2 in July, its lowest level in two years, signaling subdued operating conditions across the manufacturing sector.The Fed's preferred measure of prices and inflation, the personal consumption expenditures (PCE) price index was expected to have risen by less than June's 0.6% gain, which excludes food and energy costs. The PCE came out today at -0.1% versus the expectation of 0.0% month over month and 6.3% versus the expectation of 6.4% year over year which means it was the first month over month negative print since April 2020. Excluding food and energy, the PCE price index increased 0.1%At the The Jackson Hole Symposium today, Federal Reserve Chairman Jerome Powell said he is cautious against prematurely loosening rates and will continue to tighten for the near future. For context, the Jackson Hole Symposium features central bankers and academics from around the world. Investors world wide pay very close attention to announcement coming out of Jackson Hole as it can lead to large market moves. Last year at the Jackson Hole event, Powell said he thought inflationary pressures would probably prove transitory. He was soon proved wrong and had to play catch up with soaring prices.Equities, Fixed Income, FX and CommoditiesEquitiesLast Wednesday saw the S&P 500 top out at 4325 in the moments following the release of what were generally viewed as dovish FOMC minutes, at least relative to expectations. From there the bears gained the upper hand. Valuation began to come under closer scrutiny because many acknowledged there was little to no room for error for an S&P 500 trading at 18x a likely over-generous 2023 earnings forecasts.Fixed Income, FX & CommoditiesChina has cut its prime lending rates, with a 15bp reduction in the five-year rate. This move is more than \ was expected, and is being interpreted as another attempt to boost the flagging property market. Mortgage rates have fallen significantly over the past twelve months. US yields and the EU's yields moved higher this week. The USD is holding onto recent gain. Greenback strength attributed to speculation that Fed Chair Powell is likely to point to further rate rises and may counter notions of a 2023 pivot. USD also aided by some safe-haven flows. WTI prices rose as some OPEC+ members indicated they agree with the Saudi position that supplies may have to be curtailed to balance the market.News we've been readingThe US Federal Deposit Insurance Corporation (FDIC) issued cease and desist letters to five crypto firms alleging communications had misled users. One of the firms that sent a letter wasFTX's US subsidiary. According to the FDIC, the firms stated inaccurate information regarding insurance coverage for customer assets provided by the government agency.Telegram's founder Pavel Durov said the messaging app may launch a platform to facilitate auctioning usernames, groups and channel links in the form of NFTs. In a series of Telegram posts yesterday, Durov added that the idea was inspired by a similar auction held on The Open Network, a blockchain project which was originally halted by the SEC in 2019 following its launch. Goldman Sachs plans to build its own blockchain-based trading platform for internal use, clients and potentially other banks. The bank also revealed it has begun trading bonds and other fixed income securities on various blockchains including Ethereum. -China has begun the next phase of its central bank digital currency (CBDC) pilot program, according to local news. During this phase the country's digital yuan (e-CNY) may be used to pay for public transit in Guanzhou. Tether said it ‘holds firm' on its decision to not freeze addresses associated with sanctioned crypto mixing service Tornado Cash. In a statement issued yesterday, the firm added that it has not been contacted by US authorities or regulators to freeze such addresses and that it would comply if it receives an applicable/legitimate request from a verified law enforcement agent.'Insolvent crypto lender Voyager has been approved by a US court to pay USD 1.6M in retention compensation to over 30 employees. The authorization request, filed by Voyager last month, was described by media as largely opposed by the firm's creditors. Voyager's legal team said the payment will not include senior management. The Fine PrintDisclaimerThis confidential presentation has been prepared by Coinsquare Ltd. (the “Company”) solely for information and/or educational purposes. It shall not be construed as investment advice. Information contained herein does not purport to be complete and is subject to certain qualifications and assumptions and should not be exclusively relied upon for the purpose of making any investment or entering into any transaction in relation therewith. Neither the Company nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this presentation by you or any of your representatives or for omissions from the information in this presentation. The information and opinions contained in this document are provided as at the date hereof and are subject to change without notice and, in furnishing this document, the Company does not undertake or agree to any obligation to provide recipients with access to any additional information or to update or correct the document. This document has not been reviewed or approved by any securities administrator in any jurisdiction. 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Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of the Company, or the assumptions underlying any of the foregoing. In this presentation, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. The actual results of the Company could vary from the forward-looking information contained herein, including as a result of such risks as a collapse in the market for cryptocurrencies, adverse regulatory developments and competition from other cryptocurrency custodians. Forward-looking statements and information are based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the company's control. The forward-looking information contained herein was developed based on assumptions related to, among other things, the continued growth of the cryptocurrency market, the company's ability to obtain a license from the Alberta Treasury Board and Finance to operate a trust company or to receive a license from the applicable securities commissions as a clearing agent, grow its market share and the viability of the Company's intended future product offerings. The Company does not intend, nor does it undertake any obligation, to update or revise any forward-looking information or statements contained in this presentation to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws. The Company is a new company with no operating history; and it may not actually achieve its plans, projections, or expectations. Important factors that could cause actual results to differ materially from the Company's expectations include, consumer sentiment towards the Company's products and blockchain technology generally, litigation, global economic climate, equipment failures, increase in operating costs, decrease in the price of cryptocurrency, security threats, government regulations, loss of key employees and consultants, additional funding requirements, changes in laws, technology failures, competition, and failure of counter-parties to perform their contractual obligations. Neither the Company nor any of our representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency or completeness of the information in this presentation. Certain information contained herein is based on, or derived from, information provided by independent third-party sources. The Company believes that such information is accurate and that the sources from which it has been obtained are reliable. The Company cannot guarantee the accuracy of such information, however, and has not independently verified the assumptions on which such information is based. The Company does not assume any responsibility for the accuracy or completeness of such information.
