Crypto MarketAt the time of writing, Bitcoin is trading at $16,300 USD and Ethereum at $1,207 USD. The cryptocurrency market has continued to consolidate after a chaotic few weeks, with prices trading within a narrow range. As the dust settles following the collapse of FTX, the aggregate response of Bitcoin holders is slowly becoming clearer. A key question is whether the recent sell-off can be better characterized as simply a continuation of the bearish trend, or perhaps a trigger of a deeper psychological shift amongst investors.Among all Bitcoin holders, the entities holding < 1 BTC (also labelled as Shrimp) have recorded two distinctive ATH waves of balance increase over the last 5-months. Shrimps have added +96.2k BTC to their holdings since the collapse of FTX, and now hold over 1.21M BTC, equivalent to a non-trivial 6.3% of the circulating supply.One consistent event which motivates the transition from a bear back towards a bull market is the dramatic realization of losses, as investors give up and capitulate at scale. November has seen the fourth largest capitulation event on record, recording a 7-day realized loss of -$10.16B. This is 4.0x larger than the peak in Dec 2018, and 2.2x larger than March 2020.With such a chaotic year to date, the resolve of Bitcoin holders has been firmly tested to a historic degree throughout 2022. So much so there are barely any precedents. Those few analogues that exist in Bitcoin history, albeit small in sample size, turned out in hindsight to be the points of absolute seller exhaustion.MacroIn recent weeks there has been some cooling in the economy. Right now it's difficult to say whether the cooling is purely healthy or represents the start of a recession. There may be evidence that the inflationary period that the market has been experiencing since 2021 is in transition. The ultimate magnitude of the cooling will largely depend on Federal Reserve policy. The Fed continues to signal that they have not seen enough drop in inflation to justify a change in direction for interest rates and so remains hawkish. The Fed is planning to slow the pace of increases but was very clear that their focus is on how high to raise rates and how long to keep them there. There have been some signals from Fed Governors that rates may need to remain high throughout 2023.German inflation data released this week showed some easing, bolstering some calls for slower ECB rate hikes. US Treasury yields rose ahead of speech from Fed Chairman Powell tomorrow. S&P CoreLogic Case-Shiller National Home Price Index recorded its third consecutive monthly decline, falling 1% in September. Merchant data from the long US holiday weekend and cyber Monday showed the US consumers continued to spend at a robust pace.Capital markets do not appear to be pricing in prolonged higher interest rates. The S&P 500's current multiple is 21.4x trailing 12-month earnings, equivalent to a 4.2% earnings yield. This compares to a 3.7% 10-year treasury yield. Both are very low compared to a mid-7% annualized inflation rate. If the Fed raises rates to positive real levels, there is still significant re-pricing required.Equities, Fixed Income, FX and CommoditiesEquitiesChinese equities rally after the Chinese Securities Regulatory Commission announced it would end ban on local share sales by listed property developers from Monday, Nov 28th. Shopify Merchants' Black Friday & Cyber Monday weekend sales at $7.5B +21% year over year showing US consumers are continuing to spend on consumer goods.Fixed Income, FX & CommoditiesCrude prices on Monday briefly dropped below the level at which they started the year. Given the spike in oil prices has been the source of a lot of pain, it's worth taking a step back to consider the implications. FX markets awaiting for clues of potently policy divergence among central banks. EUR/USD stayed below the 1.04 handle as inflation appeared to be near or at a peak for the region. CPI may provide ECB with confirm to hike by only 50bps at the December meetingNews we've been readingEuropean Central Bank President Christine Lagarde called for additional crypto regulation beyond the pending Markets in Crypto Assets (MiCA) bill. In a hearing yesterday, Lagarde said there will need to be a ‘MiCA II' to address stability and reliability in the industry, and cited the downfall of FTX. Ethereum developers did not establish a specific time frame for the network's next planned hard fork ‘Shanghai.' During a call this week, ‘core developers' discussed which Ethereum Improvement Proposals (EIPs) would be included in the Shanghai upgrade. Unlocking staked ETH withdrawals is expected to be included, which was estimated to take place 6-12 months following The Merge in September.A study by the Bank for International Settlements found that the main concerns African Central Banks' have with central bank digital currencies are cybersecurity risks and high operational burdens. Separately, the International Monetary Fund called for greater consumer protection and regulation of crypto markets in Africa citing a lack of consumer protection, the recent collapse of FTX, and general asset price headwinds. Ethereum development firm ConsenSys revealed that its non-custodial wallet MetaMask collects certain personal information from its users. In its recently updated Privacy Policy, the company said its RPC provider Infura ‘will collect your IP address and your Ethereum wallet address when you send a transaction.'Former FTX CEO Sam Bankman-Fried said he will be speaking at the Deal Book summit in New York City on November 30. Bankman-Fried will be interviewed by New York Times columnist and CNBC co-anchor Andrew Ross Sorkin. It is not clear if Bankman-Fried will.DisclaimerThis 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. This presentation or the information contained herein is not to be given to any person other than the person or group that was provided with the presentation directly by the Company or their advisors and is not to be reproduced in any manner whatsoever. Any further distribution or reproduction of this presentation in whole or in part, or the disclosure of any of its contents by the recipient, is unauthorized. Interested investors are not advised to rely solely on this document in forming investment decisions and are strongly advised to conduct further due diligence by requesting additional information from the company before making any such investment decisions. Unless otherwise noted, all figures expressed herein are in Canadian dollars. Coinsquare Wealth advisors cannot provide investment advice.Forward-Looking InformationCertain of the information contained in this confidential presentation may contain "forward-looking information". 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.
