Crypto Market
Crypto see red
Major cryptocurrencies saw steep declines this past weekend, with Bitcoin falling nearly 10% below $62,000 at one point on Saturday before recovering to about $65,000. Ethereum similarly dropped 7% to around $3,000, while other large market cap coins like BNB and Solana were down 9-12%.
The broad sell-off came amid escalating geopolitical tensions in the Middle East. Iran launched missile and drone strikes against Israel in retaliation for an alleged Israeli airstrike on Iran’s consulate in Syria. Crypto prices began improving after Iran’s UN mission said the matter could be deemed “concluded,” though it warned of a more severe attack if Israel makes another “mistake.”
Conducted on the strength of Article 51 of the UN Charter pertaining to legitimate defense, Iran’s military action was in response to the Zionist regime’s aggression against our diplomatic premises in Damascus. The matter can be deemed concluded. However, should the Israeli…
— Permanent Mission of I.R.Iran to UN, NY (@Iran_UN) April 13, 2024
Beyond Middle East unrest, former BitMEX CEO Arthur Hayes predicted last week that liquidity would drop significantly on April 15th when US tax payments are due, leading to falling prices. Whether due to taxes, global conflict, or other factors, both cryptocurrencies and traditional markets fell in tandem over the weekend – indicating wider economic anxieties.
Uniswap Slapped with Wells Notice from SEC
Decentralized exchange protocol Uniswap was served a Wells Notice from the SEC last week, alleging Uniswap operates as an unregistered securities broker and exchange. Uniswap asserted services will continue actively and dismissed the claims, stating its tokens are simply digital files.
The notice comes on the heels of a court ruling that Coinbase’s wallet does not constitute a securities broker. Uniswap Chief Legal Officer Marvin Ammori said this precedent bodes well for fighting the SEC’s overreach. The agency openly admits lacking authority to regulate crypto as it has attempted.
TON Overtakes Cardano for Top 10 Status
The Open Network’s native token, Toncoin, entered the top 10 market cap rankings last week after seeing 110% price growth in a month. Telegram, TON’s original backer, now enables advertising payments in Toncoin – representing meaningful utility.
Addition of Toncoin payments expanded Telegram’s fledgling crypto efforts. Last year, they launched toncoin wallets and inexpensive NFT hosting. Hashkey Group also unveiled the Universal Basic Smartphone – a Web3 phone with TON integration.
The recent success highlights TON’s broader decentralization and application development, despite Telegram falling through on its obligations. Few chains have shown more organic adoption in absence of their founders.
Hong Kong is Joining the Party
Legacy Markets Weekly Recap
Markets Edge Lower Ahead of Major Bank Earnings
U.S. stock futures edged down this week as investors prepared for quarterly results from several major banks, including JPMorgan Chase, Wells Fargo, and Citigroup. Earnings from these Wall Street titans tend to set the tone for each quarterly reporting season, with analysts focused on metrics like net interest income and investment banking revenue.
Meanwhile, European shares rallied on the back of rising commodity prices driven by geopolitical tensions and improving demand outlooks. Brent crude topped $90 per barrel while gold reached new highs above $2,400 an ounce. However, the euro slid against the U.S. dollar as markets bet on ECB rate cuts potentially arriving before similar Fed moves.
Earnings Outlook Remains Strong Despite Risks
According to estimates, S&P 500 earnings per share could climb nearly 4% this quarter. The technology sector is expected to lead the way with projected growth of 38% for companies like Apple, Microsoft, and Amazon. Still, risks like inflation, supply chain woes, and the war in Ukraine could weigh on profit margins ahead.
Earlier last week, airline Delta managed to beat Wall Street’s forecasts for earnings and revenue in the first quarter. However, shares ultimately closed lower amid broader declines for airline stocks. Software firm Arista Networks plunged nearly 9% following a downgrade on potentially slower growth prospects for its AI business.
Commodities March Higher
Commodity markets extended their red-hot rally last week as metals like iron ore, copper, aluminum and zinc drove higher on improving demand and tight supplies. Meanwhile, oil pushed toward $86 per barrel, with geopolitical turmoil in the Middle East raising supply concerns. Precious metals also climbed as safe-haven gold inched closer to $2,400 an ounce.
Currencies and Bonds
In currency markets, the U.S. dollar index advanced 0.4% to hit its highest level versus the Japanese yen since the 1990s. The growing divergence between Fed and Bank of Japan policy has accelerated the yen’s steep slide in 2022. Meanwhile, the euro dipped below $1.07 at one point following speculation about more aggressive ECB tightening.
On the bond side, yields on 10-year Treasuries pulled back around 5 basis points on the week after producer price inflation came in cooler than expected. Reports of a potential Iranian attack on Israel sparked some safe-haven flows into bonds as well.
Key Events to Watch
- China Trade Data
- U.S. Consumer Sentiment
- Major bank earnings from Citigroup, BlackRock, Wells Fargo
- Speeches by Fed officials
Earnings Floodgates Open The flood of quarterly earnings announcements intensifies this week with reports expected from Goldman Sachs, Johnson & Johnson, Netflix and Procter & Gamble. Cryptocurrency traders will also have their eyes on the market as the next Bitcoin “halving” event approaches.
Meanwhile, on the economic data front, updates on retail sales, industrial production, housing and manufacturing will provide more clues about the health of the U.S. economy. Overseas, China’s GDP reading and German’s ZEW survey will grab attention, while UK employment and CPI inflation figures could sway Bank of England policy bets.
In Sum Even with risks related to inflation and geopolitics, the U.S. earnings outlook remains positive overall. However, downward revisions have started to pick up pace.
Mark Vermeulen
A native of the Netherlands with a degree in finance, Mark has emerged as an avid crypto enthusiast and expert. His dedication to blockchain technology and bitcoin adoption has made him the driving force behind the Dutch content of Ecoinomy. Mark's adventure began during college, where his passion for decentralized finance quickly caught his eye. His ability to simplify complex concepts around crypto has earned him prestige among Dutch investors and far beyond.
