Daily Market Update: September 21, 2023

September 21, 2023

BTC is currently trading around $26,500 and ETH around $1,600. Notable gainers in the last 24 hours are IMX, ALGO, and EGLD. The global crypto market cap is ~$1.09T, down 2.2% over the last day. DeFi Total Value Locked is ~$38b and BTC dominance is around 50%.

Market sentiment was dampened by the Fed’s pause that was generally viewed as hawkish but offered elements of mixed messaging, which was evident by the whipsawing in equities yesterday afternoon before ending the session meaningfully lower. Overall, risk assets sold off as interest rates and the US dollar rallied, with the move appearing to continue this morning. “Higher for longer” was the general takeaway, and while the updated dot plot was unchanged for year-end with the median Fed member expecting one more hike this year, rate expectations for the end of 2024 and 2025 were each 50 bps higher, indicating a slower pace of rate cuts ahead. Additionally, the Fed doesn’t expect inflation to return to its 2% target until 2026. However, Powell partially offset the hawkish tone during the conference following the release of the statement and the dot plot. Powell’s messaging reiterated that the full effects of tightening have yet to be felt and that the Fed is in a position to proceed carefully as new data emerges, further indicating that a “soft landing” was not his base case scenario. Yields continued their upward ascent this morning as fewer than expected jobless claims pointed to a tight job market, and the 10-year treasury yield hit a 15-year high, currently sitting at ~4.49%. Elsewhere, the SNB and BoE followed in the Fed’s footsteps by pausing their respective hiking cycles this morning, surprising markets in both cases which expected hikes of 25 bps each.

Notable news includes: Mt Gox’s repayment deadline was pushed back one year to October 31, 2024, but notably certain creditors that already submitted the requisite information may begin receiving payments later this year; Tether resumed its secured lending service less than a year after publicly announcing its discontinuation; Tether also acquired a 20% stake in Northern Data, a crypto miner and hosting facility operator, in exchange for a large GPU purchase order;  Venmo began providing selects users with access to PayPal’s PYUSD stablecoin; Galaxy Digital appointed its first regional CEO in the UK amidst its European expansion; an Axios report suggested Microsoft’s next generation of hardware products are expected to offer better support for crypto wallets; GammaSwap went live on Arbitrum allowing users to borrow DeFi LP tokens from AMMs to short; Wormhole integrated Circle’s CCTP enabling native USDC to be transferred between Ethereum, Avalanche, Arbitrum, and Optimism; Ethereum developers introduced the ERC-7512 standard to establish an onchain representation of audit reports that can be parsed by smart contracts; US presidential candidate Vivek Ramaswamy said he will unveil his comprehensive crypto policy framework before Thanksgiving; court documents indicate Sam Bankman-Fried’s father may have been more involved in the operations of FTX than previously known; and, Balancer said it may transition away from its .fi domain name, calling the EuroDNS domain registrar unsafe after its front-end was exploited in a social engineering attack.

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

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