Daily Market Update: June 15, 2023

June 15, 2023

BTC is currently trading around $25,000 and ETH around $1,650. Notable gainers in the last 24 hours are TWT, KAS, and KCS. The global crypto market cap is ~$1.06T, down ~3.6% over the last day. DeFi Total Value Locked is ~$41b and BTC dominance is around 49%.

Equities fell during yesterday’s Fed meeting but are regaining ground so far this morning. As anticipated, the Fed paused and kept interest rates stagnate, but the Fed’s commentary and the updated dot plot were more hawkish than virtually everyone expected, and hikes are expected to resume at subsequent meetings this year. The Fed’s revised dot plot shows the median member anticipates two more hikes will be required in 2023 to increase interest rates to 5.6% versus the 5.1% expected in March. Additionally, there was little dispersion in the member forecasts for year-end expectations, highlighting a strong consensus that the hiking cycle is not over. The ECB deviated from the Fed this morning, hiking rates by 25 bps to 4%. Nonetheless, markets are shaking off the hawkish commentary, and 2Y yields have since fallen to similar levels as before the Fed meeting (~4.65%), while 10Y yields are meaningfully lower (~3.72%).

Crypto markets similarly fell during yesterday’s Fed meeting, but more notably, they decoupled later in the afternoon and diverged sharply lower around 4pm. The catalyst sparking the sharp drawdown is unclear, but liquidations certainly exacerbated the move as more than $100m of longs were liquidated in that hour alone. The drawdown appears to have been led by ETH but quickly reverberated through crypto markets more broadly. Negative USDT sentiment certainly added to concerns as users exited USDT in mass, causing a slight depeg. The proportion of USDT in Curve’s 3Pool rose from ~22% days earlier to more than 70% this morning. Additionally, USDT now makes up ~98% of Uniswap’s USDC/USDT pool. Tether will likely need to redeem a large supply of USDT as arbitrage traders step in, and Tether’s CTO hoped to mitigate fears by stating Tether’s “ready to redeem any amount [of USDT].”

Notable news includes: The Hong Kong Monetary Authority is encouraging banking giants to accept crypto exchanges as clients; the Curve founder returned $1.3m USDT to Aave in attempt to avoid liquidation on his ~$167m loan backed by ~289m CRV tokens; Gauntlet proposed that Aave should disallow the use of CRV as collateral, highlighting concerns that the previously mentioned loan could leave lenders with bad debt if liquidated, an event that already occurred once before with CRV; crypto Twitter dove into the bizarre history of Prometheum after its founder argued the US has sufficient regulatory clarity for crypto in an appearance before Congress; EigenLayer went live on Ethereum mainnet; Binance is reportedly gearing up to leave Cyprus before MiCA goes into effect in January 2015; Voyager is set to reopen for customer withdrawals as soon as June 20th; OKX secured a preparatory license in Dubai and revealed plans to boost staff; Binance launched a new subscription-based cloud mining product for Bitcoin; the US DoJ agreed to only try SBF on the original eight charges it brought in December 2022; and, crypto brokerage firm  Floating Point Group suspended all activity, including withdrawals, after suffering a ~$20m cyber-attack.

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

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