Daily Market Update: July 28, 2023

July 28, 2023

BTC is currently trading around $29,400 and ETH around $1,900. Notable gainers in the last 24 hours are FLEX, IMX, and ICP. The global crypto market cap is ~$1.23T, up ~0.3% over the last day. DeFi Total Value Locked is ~$43b and BTC dominance is around 50%.

Yesterday’s early equity gains reversed in the afternoon as reports spread that the Bank of Japan (BoJ) would revisit its yield curve control (YCC) policy later that evening. Indeed, during the meeting, the BoJ surprised investors by paving a path toward the end of YCC and future policy normalization. While the BoJ left short-term rates unchanged at -0.1% and its long-term target at 0%, it will now bid long-term rates at 1% instead of 0.5%, increasing the upper bound on long-term rates above the target. However, Governor Ueda emphasized that the BoJ will flexibly conduct operations beyond 0.5%, so he doesn’t anticipate yields moving to 1% despite the higher cap. Japanese equities and bonds fell on the news, and the 10Y JGB yield jumped ~13 bps to 0.57%.

Despite yesterday’s shaky afternoon, strength returned to US equities this morning, and headline indexes are up 1% to 2% after a better-than-expected Core PCE reading for the second consecutive month. Core PCE is the Fed’s preferred inflation gauge and is a closely watched metric impacting the Fed’s policy decisions. US yields are down across the curve in response, and markets are pricing in an ~82% chance of a pause at the September FOMC meeting.

Notable news includes: The Senate’s $886b defense bill roped in crypto mixers and privacy coins but meaningful reconciliation with the House is necessary and the bill is likely far from complete; new SEC rules will require publicly-listed companies to disclose any “material” cybersecurity incidents within four days of occurrence; Worldcoin’s “questionable legality” is being evaluated by France’s privacy watchdog; Optimism’s transaction count flipped Arbitrum on the Worldcoin launch, and Sam Altman claimed Worldcoin is onboarding eight users per second; MarketVector partnered with Figment to release an Ethereum staking rewards index; the KIN token jumped more than 20% after a vote passed to burn 70% of the supply; Suku launched a crypto wallet solution enabling users to send crypto using their Twitter handle; Alchemy Pay expanded its payment support by partnering with checkout.com; Yuga Labs hosted a group of 40 people to test out a new portion of the Otherside metaverse experience; Azuki NFTs fell ~65% in the month after the Elementals release; 99-year-old artist Vera Molnar’s computer-generated NFT release raised nearly $1.2m and sold out in less than an hour; and, bankrupt crypto companies FTX and Genesis announced they had reached a settlement agreement resolving claims asserted by FTX and Genesis debtors against each other.

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

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