Trading Desk Market Update: 1/24

January 24, 2022

BTC is currently trading around $33,300 and ETH around $2,200.  Stablecoins are the best performing crypto assets over the last 24 hours.  The global crypto market cap is $1.59T, down 9.7% over the last day.  DeFi Total Value Locked is ~$189b and BTC dominance is around 42%.

Bitcoin is down 9% from Friday’s close, 23% over the last seven days, and 52% from its $69,044 peak on November 10th.  The weak performance has been attributed to a general sell-off in risk assets, with the S&P 500 having its worst week last week since March 2020 and the tech-heavy Nasdaq now down 12% YTD.  Other items causing investor concern include rising inflation and central bank policy accommodation removal, mounting speculation that Russia may invade Ukraine, omicron worries, and supply chain disruptions.  Investors now turn their attention to the Fed’s two-day policy meeting this week, where they hope to learn more about its plan for raising interest rates and balance sheet tapering.  The market is expecting four rate hikes this year starting in March, though a recent report by Goldman Sachs warned the risk is for more hikes should the Fed want to get ahead of inflation.  It’s also an important week for US earnings with companies like 3M, Caterpillar, Apple, and Microsoft reporting.  

In addition, US President Biden is readying an executive order that will outline a comprehensive government strategy around cryptocurrencies and will ask Federal agencies to determine their risks and opportunities.  The order could come out as early as next month. Other news includes: South Korea has completed the first phase of its CBDC test; El Salvador purchased an additional 410 BTC for ~$36,600 each; 94% of financial advisors received questions about crypto in 2021, per a Bitwise survey; Fantom has flipped BSC to become the third largest DeFi ecosystem by TVL; a Twitter job posting hints that the company could issue membership tokens or create a DAO; and, NBA Top Shot sales are up 72% over the last 30 days.

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