Daily Market Update: Feb 17, 2023

February 17, 2023

BTC is currently trading around $24,100 and ETH around $1,650. Notable gainers in the last 24 hours are FIL, KLAY, and RPL. The global crypto market cap is ~$1.15T, down ~0.4% over the last day. DeFi Total Value Locked is ~$49b and BTC dominance is around 44%.

Risk assets are down across the board as rates moved up behind more hawkish Fed commentary. Fed officials Loretta Mester and James Bullard reiterated that they saw a case for a 50 bp hike at the FOMC meeting earlier this month, and they generally expressed the view that larger rate increases are not necessarily off the table at future meetings. Goldman Sachs also revised its rate hike forecast upward as it now expects an additional 25 bp hike this year, bringing its forecasted total to three more 25 bp hikes. One month back, Fed funds futures priced in a roughly 20% chance that the Fed would pause in March and an ~80% chance that it would hike by 25 bps. Those expectations have meaningfully shifted to a ~20% chance of a 50 bp hike and an ~80% chance of a 25 bp hike, with a pause now seen as off the table. All in all, markets now expect an extended duration of this hiking cycle as recent data has pointed to extreme tightness in the labor market while CPI and PPI came in worse than expected.

Notable news includes: an investigative report from Reuters alleged that more than $400m of funds was transferred from a Binance.US account to a trading firm managed by Binance’s CEO CZ; the SEC sued Do Kwon and Terraform Labs for fraud; China began a retail-focused cross-border digital yuan pilot with Hong Kong; Japan and Russia announced that new and expanded CBDC pilots would come in April; Mt Gox’s two largest creditors elected to take most of their payout in-kind, alleviating some concerns that large scale bitcoin liquidations would negatively impact prices; Matter Labs rebranded zkSync 2.0 to zkSync Era and announced that pre-registered developers can now deploy apps on the zk rollup before a mainnet launch in the month’s ahead; crypto exchange OKX is gearing up to launch a new blockchain called OKXChain; crypto exchange Gate integrated with Copper’s ClearLoop network for custody solutions; Binance minted nearly $50m of the TrueUSD (TUSD) stablecoin; TrueFi’s TRU token rallied more than 200% after Binance’s TUSD mint as investors confused a relationship between the tokens; a GMT token airdrop was revealed for early Stepn NFT holders; the USP stablecoin fell more than 50% after suffering an ~$8.5 attack; NFT marketplace Rarible expanded its NFT aggregation marketplace to Tezos; Evan Cheng, the CEO of the company behind the Sui blockchain, is seeking to raise $100m for a web3 VC fund; and, Celsius failed to record some 7k inter-company transfers totaling billions of dollars.

Matt Kunke, Junior Strategist | 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.

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.