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Trading Desk Market Update: 7/13

July 13, 2022

BTC is currently trading around $19,100 and ETH around $1,050. Notable gainers in the last 24 hours are LDO, LEO, and SRM. The global crypto market cap is $890b, down 3.8% over the last day. DeFi Total Value Locked is ~$73b and BTC dominance is around 44%.

Markets are down broadly as the year-over-year U.S. CPI release for June (9.1%) showed that inflation reached a four-decade high as it continued to accelerate from May (8.6%), meaningfully exceeding market expectations heading into the print (8.8%). Global equities, bonds, and crypto all fell in unison on the announcement, while the U.S. Dollar exhibited strength versus other global currencies. As a result, market participants are grappling with the outlook for higher rates and the increased possibility that more aggressive rate hikes tip the economy into a recession. The market-implied probability of a 100-basis-point hike at the July FOMC meeting rose from ~2% to ~35% in the aftermath of the release. 

Notable news includes: The U.S. Treasury announced an open invitation for public comment on President Biden’s Executive Order on digital assets; a U.S. Treasury report found well-designed CBDCs to be a positive for commercial bank stability; IOSCO and BIS called for a ‘same risk, same regulation’ framework for stablecoins, stating when existing payments regulations should apply to stablecoins; The South African Reserve Bank confirmed that new legislation treating cryptocurrencies as financial assets will be introduced in the next 12 months; Kazakhstan increased the tax rate imposed on Bitcoin miners; a new report from the ECB indicated that a ban on bitcoin may be ‘probable’ due to climate concerns; a New York bankruptcy judge ruled that 3AC cannot transfer or dispose of assets held in the U.S.; KuCoin signed a partnership with Coinrule to offer automated trading; Celsius unlocked $418m of collateral from Aave; Arbitrum’s new chain, Arbitrum Nova, for social applications and gaming is now open to developers; BIT Mining revealed plans to sell its stake in its predominantly China-based mining subsidiary to prioritize U.S. operations; a free-to-mint NFT collection dubbed ‘The Saudis’ has become the second most traded collection on OpenSea over the past week; an NFT collection called WZRDS implemented a novel, yet controversial burn mechanism that allows NFT holders to vote to burn WZRDS NFTs listed for sale below a certain price; Multicoin Capital raised $430m for its newest venture fund; Lightspeed raised $7b across four funds and created a ‘crypto-native’ team; Gnosis Safe raised $100m and rebranded as ‘Safe’; lending protocol Morpho Labs raised $18m;  and, Hostess released crypto-themed Twinkies called TWINKcoin. 

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