Crypto MarketAt the time of writing, Bitcoin is trading at $22,700 USD and Ethereum at $1,555 USD. The main story of last week continues into this week, being that cryptocurrency outperforming all asset classes by posting significant gains with BTC suddenly surging by more than 7% last Friday after a brief pullback in the middle of the week.Negative headlines about yet another bankruptcy have not managed to kill investor appetite with investors shrugging off news of Digital Currency Group filing for Chapter 11 bankruptcy protection to reorganize its assets.The crypto market did however retrace a tad mid-last week to rid itself of excessive froth at the same time Global stock markets pulled back. A large proportion of traders began taking profits on their long positions. This profit-taking was the largest since February 2021 for BTC, and the largest since October 2021 for ETH.Regular profit-taking, as prices move up, could rid the market of excessive speculative activities which is a necessary purge to sustain a rising trend. The impressive part of the price action for both BTC and ETH last week was that despite the large amount of profit-taking, prices did not retreat but merely consolidated for a number of days. This may show there is underlying strength in the market, which could mean that prices could continue to be on a rising trend.MacroFederal Reserve Vice-Chair Brainard (a respected economist) implied a slowing of policy rate tightening, but that US rates would stay high for some time. Similar language about the persistence of high rates is expected to make sure speculation in markets are controlled. Fiercer language is required to generate a moderate market reaction.The US hit the debt ceiling, and US Treasury markets barely noticed. US House Speaker McCarthy declared a default would not happen and based on markets reaction it is unlikely to be any serious problem economically before the second half of the year.UK December retail sales were weaker than expected. Anecdotal evidence suggests pub and restaurant spending may have been prioritized (not included in retail sales). December producer price inflation is due from the UK and Spain. The general expectation is for pricing pressures to slow in line with the global trend. Producer prices represent corporate pricing power and do not include things like housing prices and used car prices in its data.US CPI growth is 5.1% higher over the last two years, but five-year forward inflation expectations are essentially unchanged. There is a probability structural forces may keep the annual growth rate in consumer prices elevated for much longer and substantially higher than currently priced into markets.Equities, Fixed Income, FX and CommoditiesEquitiesTech season earnings have arrived with investors curious to see if forward guidance can show more growth to come given the recent layoffs happening in the sector. With fourth-quarter earnings revised lower across the board, there is plenty of scope for upside surprises this season. Microsoft's strong results were an example of that. Microsoft's results were good but forward guidance were negative resulting in them giving a sales warning for the next quarter to come.Fixed Income, FX & CommoditiesAfter hinting to the markets in December that it would amend its yield curve control (YCC) range, the BoJ shocked markets by maintaining the scheme in its monetary policy meeting early Wednesday Asia time. This led the yen to an instant drop of more than 2% against its peers, sending the USD/JPY up 300 pips from around 128 to above 131.The weaker dollar is supporting precious metals, with Gold and Silver rising about 1% each, while Oil continues to inch higher as China' reopening provides oil traders with optimism about demand for oil going forward. For the week, Brent and WTI Crude have each gained by about 2%.New's we've been readingBankruptcy filings cited by CNBC show that BlockFi had USD ~416M of assets tied to FTX and USD ~830M in outstanding loans to Alameda Research. Creditor committee advisor M3 Partners also released a presentation that showed BlockFi earned USD ~14M in trading revenue from retail clients between May and November 2022. - link - @CNBCGenesis is looking to reach a deal with creditors over the coming days, or will be forced to have a mediator appointed to lead its negotiations. According to a statement made in the firm's first day of bankruptcy hearings, it is exploring a sale and distribution to creditors, or restructuring and giving creditors equity in the pro-forma entity. Genesis owes its top 50 creditors over USD 3B. - link - @BloombergThe New York Department of Financial Services (NYDFS) released customer protection guidance for licensed crypto custodians. The regulator said it expects custodians to ‘separately account for and segregate' clients' crypto holdings from corporate balances, both on-chain and within ‘internal ledger accounts.' The NYDFS also elaborated on limited use of customers' crypto by custodians, sub-custody arrangements, and disclosures. - link - @NYDFSThe FBI said North Korean hackers Lazarus Group and APT38 were responsible for the USD ~100M theft Harmony's Horizon bridge suffered in June. The enforcement agency added that the groups laundered USD ~60M worth of ETH through privacy network Railgun last week, with the intention of funding national ballistic missile and WMD programs. - link - @ReutersThe fine printDisclaimerThis confidential presentation has been prepared by Coinsquare Ltd., together with its respective affiliates (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. 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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.
