Daily Market Update: December 14, 2023

December 14, 2023

BTC is currently trading around $42,600 and ETH around $2,300. Notable gainers in the last 24 hours are BONK, WOO, and HNT. The global crypto market cap is ~$1.69T, up 3.2% over the last day. DeFi Total Value Locked is ~$52b and BTC dominance is around 53%.

Asset prices are sharply higher across the board in response to yesterday’s dovish Fed meeting. As expected, the Fed kept interest rates unchanged at its 5.25% to 5.5% target, but the Fed’s updated dot plot indicated the median Fed member expects 75 bps of rate cuts next year, 50 bps more than last projected in September. The dot plot also showed that most Fed members anticipate a faster than previously anticipated reduction of inflation, with core PCE falling to 2.4% by the end of 2024. Equities gained over a percent yesterday and are extending their gains again this morning. Duration rallied as the 10Y yield slipped to 3.95%, down from 5% less than two months ago. And crypto markets  gained as well, with bitcoin rallying 2.8% in the hours following the meeting.

Beyond the positive macro backdrop, crypto markets reversed course this morning and returned a subset of yesterday’s gains after a critical library maintained by Ledger and heavily relied upon by many dapps was compromised and replaced with a drainer. Crypto users were advised to not interact with any dapps as details emerged, but the issue has since been contained.

Notable news includes: Argentina President Milei announced a drastic 50% devaluation of the peso in a large scale package of economic reforms attempting to revive the fiscally troubled nation; The Basel Committee suggested introducing maturity limits for stablecoin reserves; Worldcoin launched World ID 2.0, enabling applications to authenticate humanity without leaking personal data; Cronos announced a forthcoming L2 chain built leveraging Matter Labs’ tech stack (zkSync); BONK spiked 40% after being listed on Coinbase; and, SEC Chair Gensler alluded to forthcoming Bitcoin ETF approval, stating the agency will respond to applications based on how courts interpret their authorities, referring to its loss against Grayscale in court.

Sign up to conveniently receive GSR crypto content in your inbox.

Matt Kunke, Research Analyst | TwitterTelegramLinkedIn
Brian Rudick, Senior Strategist | TwitterTelegramLinkedIn

This material is provided by GSR (the “Firm”) solely for informational purposes, is intended only for sophisticated, institutional investors and does not constitute an offer or commitment, a solicitation of an offer or commitment, or any advice or recommendation, to enter into or conclude any transaction (whether on the terms shown or otherwise), or to provide investment services in any state or country where such an offer or solicitation or provision would be illegal. The Firm is not and does not act as an advisor or fiduciary in providing this material.  GSR is not authorised or regulated in the UK by the Financial Conduct Authority.  The protections provided by the UK regulatory system will not be available to you. Specifically, information provided herein is intended for institutional persons only and is not suitable for retail persons in the United Kingdom, and no solicitation or recommendation is being made to you in regards to any products or services. 

This material is not a research report, and not subject to any of the independence and disclosure standards applicable to research reports prepared pursuant to FINRA or CFTC research rules. This material is not independent of the Firm’s proprietary interests, which may conflict with the interests of any counterparty of the Firm. The Firm trades instruments discussed in this material for its own account, may trade contrary to the views expressed in this material, and may have positions in other related instruments.

Information contained herein is based on sources considered to be reliable, but is not guaranteed to be accurate or complete. Any opinions or estimates expressed herein reflect a judgment made by the author(s) as of the date of publication, and are subject to change without notice. Trading and investing in digital assets involves significant risks including price volatility and illiquidity and may not be suitable for all investors. The Firm is not liable whatsoever for any direct or consequential loss arising from the use of this material. Copyright of this material belongs to GSR. Neither this material nor any copy thereof may be taken, reproduced or redistributed, directly or indirectly, without prior written permission of GSR.