Daily Market Update: Feb 2, 2023

February 2, 2023

BTC is currently trading around $23,700 and ETH around $1,650. Notable gainers in the last 24 hours are RNDR, OP, and LRC. The global crypto market cap is ~$1.12T, up ~3.3% over the last day. DeFi Total Value Locked is ~$49b and BTC dominance is around 44%.

Risk assets rallied substantially yesterday afternoon as the Fed hiked rates by the decreased 25 bps that markets widely expected. Given the consensus rate hike, prices moved sideways initially, but there was an explosive move upward once Fed Chair Powell took the press conference stage 30 minutes later. While Powell guided to a “couple” of more rate hikes, comments around easing inflation and the changing of verbiage from the “pace” of future hikes to the “extent” of future hikes were viewed positively by markets. Between yesterday’s release and the 4 pm market close, U.S. equities increased 1% to 2%, and ETH was up more than 3%. The BoE and ECB followed this morning, both hiking by a consensus 50 bps. Global central bank commentary has led many to believe we are approaching the end of this hiking cycle, with the BoE maneuvering similar to the Bank of Canada last week as it signaled that it’s likely to pause on further hikes. The ECB signaled another 50 bp hike would come in March before it reevaluates the path of its policy. Overall, the collective tone can be categorized as relatively dovish, in our view, and bond yields in the U.S. and Europe are falling across the curve while risk assets are extending yesterday’s move. 

Beyond policy, earnings are in particular focus, with growthier stocks outperforming core equities this morning behind META’s positive earnings release and a series of analyst upgrades that sent the shares ~22% higher. Many more potential market-moving earnings releases will come later today, with Apple, Alphabet, and Amazon reporting after the bell. 

Notable news includes: India’s CBDC appears to be picking up steam as it has now expanded to 15 cities and integrated with 10,000 merchants; the EU’s plans to regulate smart contracts appears to be heading in a less onerous direction in the latest draft text of the Data Act; Chainalysis announced some job cuts in a new reorg; Tether denied borrowing the $2b from Celsius as described in Celsius’s court documents; ETH supply reached a post-Merge low; Rocket Pool is voting on whether it should self-limit its growth to align with Ethereum’s ethos of decentralization; Optimisms’ token rallied ~23% as it announced its Bedrock upgrade will come in mid-March; Render’s token rallied ~17% after its DAO approved a burn and mint mechanism; retail giant Pick n Pay began accepting bitcoin at more than 1,600 South African locations; Bitcoin miner Pow.re raised at a $150m valuation; Cipher mining doubled its hash rate capacity in January; Cool Cats revealed plans to expand beyond Ethereum; OpenSea’s NFT sales on Polygon topped Ethereum for a second straight month; the Bonq protocol suffered a $120m oracle exploit as the attacker manipulated the price of the AllianceBlock token; and, the couch from the famous Doge meme will be auctioned off by PleasrDAO. 

Matt Kunke, Junior Strategist | TwitterTelegramLinkedIn
Brian Rudick, Senior Strategist | TwitterTelegramLinkedIn

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