SVET Markets Weekly Update April 22nd–26th, 2024
On Week 17, BTC and ETH moved sideways, mostly recovering from a mid-week ~4% slump. Stock indexes closed with their first bullish candle in 5 weeks, propelled by good corporate reports, while expectations for a Fed rate cut dissipated. Globally, the yen weakened to generational lows due to dollar strength and the BOJ’s dovish stance, while oil and other commodities continued their rise on geopolitical worries coupled with renewed expectations for China’s recovery.
MONDAY
On Monday, stocks started strong as short-term traders stepped in to buy amid technical overselling, bolstered by a perceived geopolitical relief. However, most investors are still on the sidelines, watching key economic data and earnings reports from major companies this week. Globally, gold and the dollar dropped on hints of easing tensions in the Middle East. BTC and ETH followed stocks into the green zone, reaching above 66K and 3.2K, respectively. The rest of the crypto market also performed well, with Avalanche, Monero, and Uniswap increasing by more than 5%.
Details
The Chicago Fed’s economic activity index rose to a 5-month high in March (+0.15), exceeding expectations (+0.09). Employment and production indicators increased, while housing and consumption showed slight declines.
Crypto
Hong Kong’s securities association is proposing a self-regulatory model for the city’s crypto firms. They believe this will improve industry oversight and maintain Hong Kong’s competitiveness as a financial center. The proposal involves crypto firms monitoring each other and suggests delegating some licensing power from the regulator to the industry itself.
The NYSE is considering a shift to 24/7 trading hours, similar to cryptocurrency markets. This follows a surge in retail investor activity and the popularity of round-the-clock trading platforms.
World Markets
Eurozone consumer confidence held steady at -14.7 in April below expectations of -14.0 but near a two-year high, on hopes of lower interest rates in the future. China’s central bank kept key lending rates steady despite stronger GDP growth and a weakening yuan. This suggests ongoing support for the economy facing headwinds from property and trade, even though recent loan data fell short of expectations.
Macau tourist arrivals jumped 39% in March to 2.72 million, nearing 80% of the March 2019 level. Mainland Chinese visitors surged 94%, while Hong Kong and Taiwan also saw increases. International arrivals are still recovering (584,000, 68% of 2019 level).
Lebanon’s inflation rate dropped significantly to 70.4% in March, the lowest in nearly 4 years. This follows a broad slowdown in most categories, including food and housing. Prices are still rising slightly month-to-month, but at a much slower pace.
Currencies
The dollar weakened slightly but remained near a six-month high. Strong economic data and hawkish Fed comments are leading investors to believe the Fed will delay or even avoid interest rate cuts this year. Key economic reports this week will be watched for further clues
The euro held at 1.06, near a five-month low against the dollar. Investors are waiting for economic data to see if the ECB and Fed will cut interest rates as planned. Recent signs of inflation and a strong US economy are making rate cuts less likely. The British pound fell to a five-month low (1.23) versus the dollar as dovish comments from Bank of England officials dampened expectations of an imminent rate cut.
Commodities
Gold prices plunged over 2% to around $2,330 per ounce on Monday. This drop comes after tensions in the Middle East eased and investors shifted to riskier assets. Additionally, comments from a Fed official dampened hopes of imminent interest rate cuts, reducing the appeal of gold. Investors are now looking ahead to US economic data for clues on future rate decisions. Oil prices hovered near four-week lows around $82 a barrel on Monday. Investors weighed the uncertain situation in the Middle East against plentiful oil supplies. While Iran downplayed recent attacks, the US imposed new sanctions targeting Iranian oil exports. Additionally, rising inflation concerns and higher US crude stockpiles dampened hopes of an interest rate cut, leading investors to hold off on oil purchases.
TUESDAY
On Tuesday, stocks rose, led by communication services, industrials, and healthcare, while PMI data indicated a slowdown in the manufacturing and services sectors. Internationally, gold continued its slide due to dollar strength and reduced negativity from geopolitical news in the media. BTC and ETH chilled above 66K and 3.2K, respectively, while the rest of the crypto market remained mostly flat.
Details
The service sector weakened in April (according to the Richmond Fed) with falling revenue and spending. However, demand rebounded and firms remain optimistic about the future, despite rising costs. Building permits fell again in March to a 6-month low, despite a small rise in the West. This drop reflects continued weakness in the housing market due to high borrowing costs. Single-family permits also declined.
The private sector barely grew in April according to a key SP PMI survey. Both manufacturing and services slowed down, with new orders falling and employment declining for the first time in almost 4 years. This suggests rising interest rates and inflation are hurting the economy.
Crypto
A group in Switzerland is proposing a law change to add Bitcoin to the Swiss National Bank’s reserves. This would require collecting signatures for a public vote and potentially changing the country’s constitution. It’s a way for citizens to propose changes to laws or the constitution. People collect signatures on a petition, and if enough are gathered, the proposal goes to parliament for a vote.
World Markets
Germany’s manufacturing PMI edged up slightly in April but remains in contraction. New orders fell sharply, and demand remains weak. However, there are signs of improvement, with slower production declines and rising optimism. France’s factory activity contracted for the 15th month in April, worse than expected. New orders plunged, output fell, and employment continued to decline. Manufacturers are also facing rising input costs and are pessimistic about the future. India’s business activity grew at the fastest pace in nearly 14 years in April. Both manufacturing and services boomed, with record highs in new orders and foreign sales. Employment rose slightly, and businesses remain optimistic about the future. However, inflation continues to be a concern.
Currencies
The dollar weakened after data showed a slowdown in manufacturing and services sectors, renewing expectations of interest rate cuts by the Federal Reserve later this year. Investors are watching key economic data this week for confirmation. The Japanese yen hit a new 34-year low (154.8) against the dollar, raising concerns about excessive weakness. Finance Minister Suzuki warned of potential intervention, while BOJ Governor Ueda left the door open for future rate hikes to combat inflation. Investors are watching the BOJ’s policy meeting this week for further clues.
Commodities
Gold prices plunged to a three-week low below $2,300 per ounce. Easing tensions in the Middle East and a strong dollar fueled the decline. Investors are waiting for key US economic data for further clues on rate cuts.
WEDNESDAY
On Wednesday, stocks are mostly in the red as economic reports continue to send mixed signals, reflecting deteriorating fundamentals but still showing strong consumer morale. Internationally, commodities are still on the rise, with copper reaching a two-year high. BTC suddenly plunged by 4% prompting the rest of the crypto market to follow suit, with Bitcoin Cash, Cardano, Avalanche, Chainlink, and Solana decreasing by 4% or more.
Details
Orders for durable goods like machinery and vehicles jumped 2.6% in March, exceeding expectations. This was the biggest increase since last November. Transportation equipment led the surge, with strong demand for civilian aircraft and autos. Even categories with prior declines saw improvement. Business spending plans also showed a slight increase. Mortgage rates continued to climb for the third week in a row, reaching a 5-month high of 7.24% for a 30-year fixed-rate loan. This increase tracks with rising Treasury yields as investors bet on the Fed delaying or avoiding interest rate cuts.
Crypto
The market for borrowing and lending cryptocurrencies using NFTs as collateral reached $2 billion in Q1 2024, up 44% from the prior quarter. NFT holders are using these loans to invest in other assets, but analysts expect the money to eventually flow back into established cryptocurrencies and blue-chip NFTs.
World Markets
Germany’s business confidence rose for the third month in a row, hitting a 1-year high (89.4) in April. This is likely due to hopes of lower interest rates from the ECB and some easing of inflation. Manufacturers and service providers are more optimistic, while traders and constructors remain downbeat. UK manufacturers are feeling more optimistic, with expectations for rising output reaching a six-month high. However, costs remain high and are expected to keep rising, potentially pushing up prices for consumers. Indonesia’s central bank raised interest rates to a record high (6.25%) to fight inflation (increased to 3.05% in March) and support the weakening rupiah currency. This is the first rate hike this year and aims to keep inflation within target.
Currencies
The dollar held after falling following data showed slowing US growth, adding to expectations of Fed rate cuts. A strong euro, British pound, and Australian dollar due to positive economic data in those regions also pressured the greenback. Investors are watching key US economic reports this week for clues on future interest rates.
Commodities
Copper prices are nearing two-year highs due to supply disruptions. A major mine closure and Western sanctions on Russia limited copper concentrate. However, high prices are curbing some Chinese demand, and some investors are taking profits. A weaker dollar due to slower US business activity is also supporting copper prices.
THURSDAY
On Thursday, stocks recovered after falling at opening as GDP growth came in much weaker than expected at 1.6%, while inflation remained high. Disappointing earnings from Meta and IBM added to the morning’s dump. Globally, the yen hit a new high at 155, faced with a rising dollar, while Brent stabilized at 88 due to a temporary pause in the Middle East situation. BTC and ETH lingered above 64.7 and 3.1 after Wednesday’s slump. The rest of the crypto market was mostly in the green, with Uniswap and Polygon adding up to 3%.
Details
The economy grew slower than expected in Q1 2024, at an annual rate of 1.6%. Consumer spending, especially on goods, weakened. Business investment slowed too while spending on services increased. Government spending remained positive. Trade also contributed to the slowdown as exports fell and imports jumped. Core inflation rose faster than expected in Q1, hitting 3.7% annualized. This is up from 2% in the prior quarter and exceeds forecasts (3.4%). Overall inflation also rose, reaching 3.4% annualized.
Jobless claims unexpectedly fell to a 2-month low of 207,000, further indicating a tight labor market. This gives the Fed more flexibility to delay rate cuts and focus on controlling inflation. The Kansas City Fed’s manufacturing index plunged in April to -13 from March’s -9, with production and new orders down. Activity weakened across durable and non-durable goods. Despite the slowdown, businesses are slightly more optimistic about the future, especially regarding production. (KFed)
Crypto
Turkey leads the world in using stablecoins, relative to its GDP. This is because the Turkish lira is volatile. The report suggests this trend is happening in other countries with unstable currencies, like Georgia.
World Markets
UK car production dropped 27% in March due to factory adjustments for new electric car models. This is despite steady domestic demand. Exports fell sharply, but electric vehicles still make up a significant portion of production. The industry expects continued volatility as factories shift to electric vehicle production.
Currencies
The Japanese yen hit a new 34-year low (155) against the dollar as the Bank of Japan meets. While the BOJ is expected to hold rates steady, comments from BOJ Governor Ueda suggest future hikes if inflation rises or the yen weakens further. The Mexican peso weakened to a five-month low (17.1) against the US dollar. This comes as Mexican inflation rose and economic activity surged, suggesting the Bank of Mexico might raise interest rates. However, investor focus is on the US Fed’s hawkish stance due to high US inflation and a strong job market, which strengthens the dollar.
Commodities
Oil (Brent) prices held steady around $88 a barrel after dropping earlier. Investors are unsure how delayed US rate cuts might affect oil demand. Strong US economic data suggests the Fed may hold rates higher. Focus is now on US GDP and inflation data this week. Despite this, a surprise drop in US oil stockpiles and easing tensions in the Middle East are providing some support to oil prices.
FRIDAY
On Friday, stocks increased after positive earnings reports from tech giants, putting major indexes on track for their first green week in five as consumer sentiment fell below expectations. Internationally, the yen reached heights not seen since the 1990s, while copper increased at a two-year high. The crypto market traded sideways mostly, with BTC and ETH hovering above 63.5K and 3.1K.
Details
PCE inflation rose to a 4-month high of 2.7% YoY in March, exceeding expectations (2.6%). This follows a historical trend of inflation averaging 3.3% over the past decades, with peaks as high as 11.6% in 1980 and lows of -1.47% in 2009. (BEA) Consumer confidence fell slightly in April to a 2.5-year high, driven down by a more negative outlook on the future, according to the University of Michigan. Inflation expectations rose modestly. Consumers are uncertain about the economy but not worried about global events yet.
Crypto
BTC investments are slowing down with investors pulling $218M out of the ETF products after a key economic report showed weaker growth. This reduces expectations of Fed interest rate cuts, which typically make investors avoid riskier assets like Bitcoin. This comes after a strong start following the launch of several Bitcoin ETFs in January.
World Markets
Spain’s unemployment rate jumped to a one-year high of 12.29% in Q1, exceeding expectations (11.8%). The number of unemployed rose and the labor force participation rate dipped. Russia’s central bank kept interest rates at a record 16% to fight inflation. Strong economic growth and limited production capacity are pushing prices up. Labor shortages due to mobilization are making it worse. The bank expects inflation to stay high this year and keeps rates high, even though the economy is doing better than expected.
Currencies
DXY rose after inflation data came in higher than expected, strengthening expectations of continued high interest rates. However, a weaker-than-expected GDP report later caused some uncertainty. Strong underlying inflation and a tight labor market cloud the picture for potential rate cuts in 2024. The Japanese yen hit a 34-year low (156) against the dollar as the Bank of Japan kept interest rates unchanged. Despite rising inflation forecasts and a healthy economy, the BOJ’s dovish stance weakened the yen. Authorities are watching for signs they might intervene to stop the yen’s decline.
Commodities
Copper prices continued to soar reaching a 2-year high due to supply concerns. Mine shutdowns in Panama, Zambia, and South America threaten production. China, a major producer, plans to cut output. Strong demand for copper in electric vehicles is fueling the price increase.
Comment: Coins With the Face
Watching meme coins rise and rise on the Solana chain made me salute Adam Smith and his “invisible hand” once again. After staying in crypto for 10 years, I thought I had seen it all, but new, younger, and bolder generations of degens can’t stop astonishing me with their sturdiness and adaptability. The Boomer’s high-posts in governments and corporations continue to throw shell after shell at them in the form of regulations, registrations, and limitations with the sole purpose of forcing them to live the same dumb and obedient lives their parents lived. However, degens keep inventing new ways to live fast and fully.
Boomers think it’s just a bunch of teens sitting in their mother’s basement, lured by dangerous and mostly foreign strangers into nefarious schemes of printing funny money and pyramid schemes on their way to an undeserved fortune.
Nothing could be further from the truth. In fact, if you follow the lifecycle of many meme coins, you can watch the human dramas developing in new “virtual settings”, but still ruled by the same iron law of “supply and demand”, just as in the slow-moving “business-lives” of Boomers and X-Gens but at a lightning-fast speed.
Take, for example, the story of Slerf ($SLERF) developers who “burned the LP and the tokens that were set aside for the airdrop” while “mint authority was already revoked.” The developer also added, “Guys, I f***** up. There is nothing I can do to fix this. I am so f****** sorry.”
In the Boomer-infested world, it is equivalent to not paying promised dividends to your shareholders because you accidentally burned your bank with an army-issued flamethrower. So, Boomers would sell it. However, the next day, this meme coin did the opposite — it rallied and rallied hard to a market cap of over $400 million with trading volumes on Solana exceeding $3 billion in two days.
You can argue that this is madness, but I say you are wrong. It’s a teamwork. A team of thousands of degens read the post and trusted that this developer was just a human prone to mistakes — not a crook, as Boomers would think him to be before publicly crucifying him and sending him off to Sing-Sing or somewhere.
Nope. Those thousands of degens were smart enough to understand in split seconds that this is a real business they are running, and it is in their best interest to keep it going, no matter what happens. So, they bought instead of selling.
If you now start moralizing and saying that these small pieces of code are worthless and “produce nothing,” and that these degens should “find a job” instead of “speculating”, I would kindly remind you that Boomers have managed to build and defend a world that provides those degens — mostly Gen Z — with zero jobs, zero cash, zero equities, zero hope, and the vision of three upcoming apocalypses — AI, Climatic and Thermonuclear.
So, please, keep your opinions to yourself before you understand why degens are in such a hurry to live their lives to the fullest, like billions of beautiful but one-season-only butterflies.
During Week 18, The Fed interest rate decision is the main event, followed by key jobs and manufacturing data. Earnings reports from major companies like Amazon and Apple will also be watched closely. Internationally, inflation data from various countries and GDP figures for several economies are on the agenda. Manufacturing data from China and other countries is also being released.
Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest into your bright future without hassle. For more on SVET Value: https://evernomics.com/
SVET Markets Weekly Update (April 15–19, 2024)
On Week 16, the stock market was down significantly. The S&P has had its worst week in six months, wiping out almost all its gains since the beginning of the year. Economic growth concerns around the world conflict with persistent inflation worries in major economies, underscored by the Fed’s indecisiveness towards rate cuts and worsening geopolitical situations, especially in the Middle East. BTC and ETH are down to their critical support zones on 59–62K and 2.9–3.2K, respectively. Many investors suggest that, unlike in 2020, 2016, and 2012, this time the halving event had already been priced in by corporate funds, which have effectively monopolized the BTC market since the ETF listing.
Monday
On Monday, stocks dipped to their month-low levels due to rising retail sales and a marginally stabilizing manufacturing slowdown. Globally, commodities continued to rally amidst worsening geopolitics, particularly with price rises for aluminum (due to new sanctions), tin, and rice. BTC and ETH attempted to recover after the weekend’s crash stemming from the Middle Eastern conflict escalation, but remained under 64K and 3.1K, respectively, under bearish pressure, fearing a repetition of the 2021 BTC double top pattern.
Details
NY manufacturing showed some signs of improvement in April, but remained in contraction (-14.3). New orders, shipments and employment kept falling. Prices rose and businesses are cautiously optimistic about the future. Retail sales rose modestly in March (0.7%), exceeding expectations (0.3%). Sales at non-store retailers, gas stations, and building material stores led the gains. Sales fell for electronics, clothing, and autos. Overall, consumer spending remains resilient.
Crypto
A surprising number of survey participants (over half of 2400 crypto investors surveyed by KPMG) invest heavily in digital assets, putting more than a quarter of their wealth into them. While some (34%) feel secure about these investments, Bitcoin (91%) and Ethereum (78%) remain the clear favorites.
World Markets
El Salvador’s inflation continued to slow down in March 2024, reaching a 15-month low of 0.77%. This was driven by falling prices for healthcare, miscellaneous goods, furnishings, and communications. However, food, restaurants, and housing prices rose slightly. Overall, monthly inflation remained low at 0.06%.
Currencies
The US dollar surged to a five-month high (106) on Monday. Strong US retail sales and inflation data fueled expectations that the Fed will hold off on interest rate cuts. Geopolitical tensions initially boosted the dollar’s safe-haven appeal but eased as tensions subsided.
Commodities
Aluminum prices soared 10% to 2.7K to a new high on supply worries due to sanctions. The US and UK banned new Russian aluminum, aiming to curb Russia’s war funding. But analysts say this might not stop sales and could create market uncertainty.
Rice prices jumped to a near-term high on worries about limited supply (4.9 million tonnes in the 2024/25 season). Bad weather and export curbs from India are causing concern, despite a slight increase in global rice production expected this year. The market is hopeful things will improve after India’s election and a global rice surplus is expected next season.
Tin prices jumped to a new high since June 2022 due to limited supplies. Sanctions on Russia, along with disruptions in DR Congo, Indonesia and Myanmar, squeezed supply. Strong factory data in the US and China fueled demand for tin and other base metals.
Tuesday
On Tuesday, stocks showed mixed performance due to technical factors following yesterday’s slump and to low housing numbers. Uncertainty was heightened by Powell’s comments about the Fed’s “restrictive policy” possibly continuing. Internationally, the dollar, gold and oil keep rising, China reported an unexpected GDP advance accompanied by dismal growth in manufacturing and retail sales, highlighting a potential divergence in Fed and CBC rate policies. This divergence was also reflected in the Brazilian real’s depreciation. In crypto markets, BTC and ETH prices continued to drift remaining above 62K and 3K, respectively. Meanwhile, the broader crypto market saw further declines, with coins like Bitcoin Cash, Uniswap, Avalanche, and Solana forfeiting up to 4% of their value.
Details
Building permits unexpectedly dropped by -4.3% (it was expected +2.3%) in March, reaching the lowest level since July 2023. This decline reflects a slowdown in housing market activity, likely due to high borrowing costs. All regions except the West saw permit declines, with the Midwest and Northeast experiencing the biggest drops.
Housing starts tumbled 14.7% in March, the most in 3 years, as high mortgage rates discouraged potential buyers. This is the lowest level of housing starts since last August. All regions except the West saw declines, with the Northeast and Midwest hit the hardest.
Crypto
DePIN startups have raised over $1 billion but only bring in about $15 million annually. This technology uses blockchain for real-world infrastructure, attracting venture capital despite a lack of customers. Analysts recommend DePIN projects that address existing needs with a clear customer base.
World Markets
The IMF upgraded its global growth outlook for 2024 to 3.2%, citing surprising resilience. Inflation is expected to fall steadily, especially in the US. The USA (+2.7%), India (+6.8%), and some other economies received higher growth projections, while forecasts for Europe (+0.8%) and some European countries were slightly downgraded.
China’s economy grew by 5.3% in Q1 2024, surpassing expectations (+5%) as stimulus measures and spending for Lunar New Year boosted growth. Despite a strong start, industrial output and retail sales fell short in March, indicating a need for further policy support. Fixed investment also saw a significant increase, signaling positive momentum towards achieving the GDP growth target of around 5% for the year. However, the jobless rate remained high at 5.2% in March. Youth unemployment, which hit a record 21.3% in June 2023, was not included in the recent data release.
China’s factory growth slowed dramatically in March (+4.5% YoY), missing expectations (+5.4%). All sectors cooled down, leading to the weakest expansion in industrial output in almost a year. Despite this, the first quarter still saw a solid increase of 6.1%. China’s retail sales growth sputtered in March (+3.1% YoY), missing expectations (+4.5%) and marking the slowest gain in eight months. Car sales and jewelry purchases were hit especially hard, while spending on food and home goods remained more robust. Overall, retail spending rose slightly for the first quarter.
The Israeli economy shrank by 21% in Q4 2023, deeper than earlier estimates, due to the impact of the war. Private consumption (-26.9%) and investment (-67.9%) dropped significantly, while government spending increased (+83.7%). Overall, the economy grew by 2% in 2023, down from 6.5% in 2022, with expectations set at 3.5% before the conflict began in October.
Currencies
The dollar surged to a five-month high on Tuesday, fueled by strong US economic data and hawkish comments from Fed Chair Powell who suggested interest rates might stay high for longer, dampening hopes for cuts in 2024. This drove the dollar up against major currencies like the Euro, Pound, and Yen.
India’s rupee hit a record low (83.6) against the strong dollar in April, following a sell-off in Asia. Concerns about China’s currency and expectations of higher US interest rates fueled the decline. Despite the drop, India’s strong economic growth helped limit the damage.
The Brazilian currency hit a new low (past 5.18) in April due to global tensions and expectations of lower interest rates by Brazil’s central bank. This contrasts with the US Federal Reserve’s hawkish stance. Despite a rise in unemployment, strong retail sales and a trade surplus helped limit the real’s depreciation.
Commodities
Gold prices continued to rise higher after a brief correction following the ATH (>2.4K) reached on Friday. Investors are less confident about interest rate cuts from the Fed, reducing the appeal of gold. Despite this, demand from central banks and safe-haven buying limited the decline.
Wednesday
On Wednesday, the mortgage rate hit a 4-month high, and stocks closed lower as Powell’s hawkish remarks and mixed earnings reports weighed on the market. The S&P 500 and Dow hit multi-month lows. In the world’s markets, aluminum prices spiked on sanctions and major currencies, including the Indonesian rupee, continued to fall as the dollar gained strength. BTC and ETH dipped below their key supports at 60K and 3.0K, respectively. The rest of the crypto market followed suit, cutting prices by up to 4% and causing significant decreases in market caps for major coins such as Polygon, Polkadot, Cardano, Algorand, Cosmos, and Solana, with a 30% drop on a monthly basis. Avalanche and Uniswap depreciated by more than 40% (MoM) in what were the most drastic crypto crashes in the past 6 months.
Details
Mortgage rates reached their highest level (to 7.13%) since early December this week, according to the Mortgage Bankers Association. Rates rose for both regular and jumbo loans. Even with these increases, some borrowers are still applying for mortgages, possibly to lock in a rate before they go even higher.
Crypto
DeFi exploded in Q1 2024, surpassing stablecoins in daily transactions and tripling locked-in assets. This surge in user activity (+291% QoQ), dubbed “DeFi Summer part 2,” is driving optimism despite regulatory hurdles.
World Markets
South Africa’s inflation dipped to 5.3% in March, a relief from recent highs. While some items like food saw price drops, others like education and utilities kept inflation above the target range. The core rate, excluding volatile items, also eased slightly. Overall, prices are rising, but at a slower pace than before.
Russia’s producer inflation dipped slightly in March (to 19.1% from 19.5%) but remained high, especially for miners (45.8% vs 46.4%) due to rising fuel costs. Overall producer prices rose at the fastest pace in six months.
Currencies
The Indonesian rupiah hit a four-year low against the dollar due to rising US interest rates, Middle East tensions, and a weak Chinese economy. Capital flight and a widening current account deficit are putting further pressure on the currency. Indonesia’s central bank is intervening to stabilize the rupiah.
Commodities
Aluminum prices soared to their highest level since early 2023, reaching $2,560 per tonne. This surge is due to sanctions on Russia, a major producer, limiting supply at key exchanges. Concerns about future restrictions and ongoing supply chain issues in China are also contributing to the price increase.
Thursday
On Thursday, stocks were mostly in the red after a 5-day slide for the S&P 500 and Nasdaq. Interest rate worries were emphasized by strong Philadelphia manufacturing data and flat jobless claims but conflicted with corporate earnings and falling home sales. On global markets, the central banks of the USA, Japan, and South Korea held an urgent meeting to address the weak yuan, while the dollar remained super-strong and commodity prices continued rising, with tin and copper reaching two-year highs. BTC and ETH attempted a sluggish recovery, closing above 63K and 3K a day before the halving, but without changing the overall bearish technical picture. They were joined by the rest of the crypto market, with Solana, Uniswap, and Chainlink adding more than 6%.
Details
Jobless claims remained flat at 212K, indicating a tight labor market. This data, below expectations, suggests the unemployed are finding jobs at a healthy pace. The Fed may hold off on interest rate cuts to address inflation due to this strong labor market.
The Philly Fed Manufacturing Index surged to 15.5 in April, exceeding expectations by a wide margin. This indicates growth in the manufacturing sector, with new orders and shipments rising sharply. However, employment continued to decline, and businesses reported ongoing price increases. (PHIL)
Existing home sales fell 4.3% in March to 4.19M units, after a February jump. Rising mortgage rates and limited price movement are seen as reasons for the slowdown. Sales rose only in the Northeast, while other regions dipped. Inventory increased, but remains tight relative to demand. The median sales price rose 4.8% to $393.5K.
World Markets
Eurozone construction dipped YoY in February 2024, down 0.4%. Building and specialized activity declined, but civil engineering grew. Construction varied by country, with Spain and Germany gaining while the Netherlands and France fell. Monthly output, however, rose 1.8%.
European car sales fell 5.2% in March, the first decline of 2024, blamed on Easter timing: Germany (-6.2%), Spain (-4.7%), Italy (-3.7%), and France (-1.5%). This follows a strong February. Sales dipped in most major markets, including Germany and France. Electric car registrations (13% of the market) also dropped, but remain up slightly for the year compared to 2023.
Currencies
The dollar held steady around a five-month high of 106 after earlier dips. This comes despite some positive economic data as the Fed prioritizes fighting inflation and keeps investors guessing about future rate cuts. The Chinese yuan strengthened against the dollar after falling to five-month lows. China’s central bank and state-owned banks are intervening to support the yuan. Despite stronger-than-expected GDP growth, weaker economic data and a rising USA dollar are keeping pressure on the currency.
The South Korean won strengthened after weakening to an 18-month low. This follows a trilateral meeting between the US, Japan, and South Korea where they agreed to cooperate on currency markets. The Bank of Korea is also prepared to intervene to support the won, but China’s weak currency limits their options. The won has been pressured by a strong dollar.
The Japanese yen held steady around a 34-year low versus the dollar despite US concerns about currency weakness in Asia. This comes after a meeting between US, Japanese, and South Korean officials. The difference in monetary policy between Japan’s dovish central bank and the hawkish Fed is keeping the yen weak.
Commodities
Tin prices skyrocketed to a near two-year high of $32,750 per tonne due to supply worries. Export delays in Indonesia, a major producer, and disruptions in Myanmar worsened existing shortages. Meanwhile, rising demand from China and the US, fueled by manufacturing growth and expectations for AI technology, put additional strain on supply.
Wheat prices dropped below $5.4 per bushel, near a 3-month low, due to a global supply glut. Bumper crops from the Black Sea and the US pushed prices down. The USDA predicts record Russian exports, further pressuring prices despite lingering concerns about potential shipping disruptions.
Copper prices soared to a near two-year high in April at over $4.4 per pound. This surge comes from a combination of factors: concerns about limited copper supplies due to mine shutdowns and smelter slowdowns in China, along with signs of increasing demand from Chinese factories.
Friday
On Friday, stocks were deep in the red due to escalating tensions in the Middle East, with tech and communication sectors leading the decline. Geopolitical games have negatively impacted markets worldwide, with gold reaching its ATH again. Meanwhile, BTC continued its sluggish pre-halving surge, rising to 65.2, with the rest of the crypto market following suit uneasily.
Crypto
A new IMF study examined BTC’s cross-border transactions. It found BTC use is widespread globally, especially in areas with limited traditional financial options. The study also highlights the difference between on-chain and off-chain transactions, with on-chain transactions being larger. Bitcoin’s ability to bypass capital controls suggests it will play a role in shaping future regulations. Policymakers need to oversee both traditional and crypto activities.
World Markets
Japan’s core inflation eased slightly to 2.6% in March but remains above the central bank’s target. This comes despite a recent policy shift to raise rates and end negative rates. The weak yen and high global prices keep inflation elevated, and the Bank of Japan is expected to take a cautious approach to further tightening.
Malaysia’s economy grew faster than expected in Q1 2024, reaching 3.9%. This is the strongest growth in a year, driven by all sectors, especially services. Construction and manufacturing also improved, while agriculture slowed. However, the economy shrank slightly compared to the previous quarter.
Argentina’s trade balance swung dramatically positive in March 2024, reaching a surplus of $2.1 billion. This reverses a trend of deficits and comes mainly from a sharp drop in imports (down 36.7%) due to lower purchasing power. Exports also rose slightly (11.5%) on the back of increased sales of agricultural products and energy.
Currencies
The British pound stayed weak around $1.24 due to sluggish retail sales and lingering Middle East worries. Despite lower inflation, strong wage growth keeps the Bank of England from cutting rates. The strong dollar, backed by the hawkish Fed, adds pressure.
Commodities
Gold surged above $2.4K , hitting record highs again. This is due to rising tensions in the Middle East, following an Israeli missile attack on Iran. The focus on geopolitics overshadowed recent hawkish comments from the Fed about keeping interest rates high.
During Week 17, GDP, inflation, and earnings reports are key. PMI data will gauge manufacturing and services health in major economies. Consumer confidence and interest rate decisions in several countries will also be watched closely.
Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest into your bright future without hassle. For more on SVET Value: https://evernomics.com/
SVET Markets Weekly Update April 8–12, 2024
On Week 15, stocks and crypto continue their downward trend, influenced by technical, economic, and geopolitical factors. Wednesday’s CPI increase and Thursday’s spike in the dollar intensified this decline. Both stock and crypto markets appear more bearish on a daily basis. However, BTC and ETH are holding above critical support levels at 60–62K and 2.9–3K, respectively. Yet, if negative geopolitical factors persist, these support zones may be tested next week.
Monday
On Monday, stocks finished flat ahead of a data-heavy week. Investors were awaiting inflation data, consumer sentiment, and Fed clues on rate cuts. Earnings season starts Friday. Tesla surged 3% on robotaxi news, but Apple, Nvidia, and others fell. In the world’s markets, Israel held interest rates amidst the war, copper prices rose on EU and China manufacturing resurgence hopes. Both BTC and ETH were in positive territory. Ether was leading the surge with an impressive gain of over 9%, while Bitcoin was up by more than 4%. It feels like traders have started to steer the market preparing for the “sell the news” event after the upcoming BTC halving.
Details
Consumers expect inflation to stay around 3% for the next year, unchanged for 3 months. This is a 3-year low. They anticipate higher costs for necessities like gas, food, and healthcare, but steady home price growth. Long-term inflation expectations are mixed, with 3-year views edging up and 5-year views down.
Crypto
BlackRock and Fidelity’s Bitcoin ETFs (IBIT & FBTC) were launched 59 days ago, and they’ve seen continuous investment, outperforming 99.9% of all ETFs ever launched since the market began (1990s). This surge is likely due to growing institutional interest in crypto, inflation concerns, and a desire for alternative investments in a shaky global economy.
World Markets
The Philippines kept interest rates at a 17-year high (6.5%) to fight inflation. Inflation is rising, especially rice prices, but remains within the target range. The central bank upped its 2024 inflation forecast to 4% but left its 2025 view unchanged at 3.5%. Turkey’s Industrial output surged 11.5% YoY in Feb, the fastest pace in 2 years. Mining and manufacturing led the gains. Despite a slowdown in electricity production, this marks a strong rebound from January’s decline.
Israel held interest rates steady at 4.5% for a second meeting. This aims to boost the economy and control inflation despite war-related uncertainties. While current inflation is within their target range, future expectations are rising. Policymakers are cautious due to war, a weakening shekel, and rising oil prices. GDP growth is still projected at 2% for 2024 and 5% for 2025.
Commodities
Copper prices soared to a 14-month high (over $4.25/lb) on strong global manufacturing data. Positive PMI readings from Germany, China, and the US signaled rising demand for copper. Supply disruptions in Africa and production cuts by Chinese smelters further boosted prices.
Tuesday
On Tuesday, stocks surrendered their gains, with financials, industrials, and tech sectors leading the decline while real estate remained positive. Small business confidence plummeted to levels not seen since the 2007–08 depression. Internationally, commodities continued their upward trajectory, driven by gold and with tin prices reaching year-highs. BTC (-4%) and ETH (-5%) retreated sharply after encountering resistance levels at 72K and 3.7K, respectively. The rest of the crypto market followed suit, with Litecoin (-7%) and Avalanche (-6%) leading the downward trend.
Details
Small business confidence plunged to a 12-year low (88.5) in March. Inflation is the top concern, followed by a tight labor market. Owners are pessimistic about sales growth and hiring plans are slowing down. Economic optimism dipped to a 4-month low in April (43.2). All sub-indices fell except confidence in federal policies. Investors remained optimistic (54.9) while non-investors grew more negative (36.6).
Crypto
Overall, spot Bitcoin ETF volumes have been on a decline since its peak (early March). Grayscale’s main spot ETF saw a large outflow ($303 million), but other spot ETFs like Bitwise and BlackRock’s had inflows. This creates a net outflow of $224 million overall. However, looking at a broader timeframe, nearly $1 billion flowed into Bitcoin ETFs last week, mostly into BlackRock’s product. Despite the recent spot ETF outflows, overall interest in Bitcoin investment vehicles remains strong.
World Markets
Saudi Arabian industrial output declined 7.7% YoY, the smallest drop in 8 months. Mining, especially oil production, dragged down the sector. However, manufacturing rose 2.1%, driven by growth in items like metals, paper, and beverages. Overall, industrial production edged up 1% monthly.
Currencies
DXY is stuck near 104.2 as investors wait on key inflation data and Fed minutes. Strong jobs data and hawkish comments from Fed officials lowered expectations for rate cuts this year (60 basis points vs prior forecast of 75). The dollar is steady but could weaken against the yen, potentially inviting intervention from Japan.
Commodities
Gold keeps rising 8th day in a row, reaching over $2,350 an ounce. Strong demand from central banks and safe-haven buying are fueling the rally. China keeps adding to its gold reserves, and analysts predict prices could hit $3K by 2025. Geopolitical tensions and inflation add to gold’s appeal. Investors await Fed minutes and US inflation data for clues on interest rates.
Tin prices hit a 15-month high of nearly $30,000 per tonne, mirroring other base metals. Strong global demand and worries about supply are behind the surge. Indonesia, a key exporter, restarted mining but future regulations cast a shadow. Positive manufacturing data in China adds fuel to the fire for base metals. FYI: The world’s leading tin producers: China, Indonesia, Peru, Myanmar and Bolivia.
Wednesday
On Wednesday, stocks plunged as inflation worries flared in a major upset to tech bulls, dimming hopes of Fed rate cuts. The Fed funds rate is now seen staying high in June (76.8% vs 42.6% yesterday) and July cuts are less likely. All sectors fell, with tech giants like Apple and Microsoft leading the decline. Globally, the race in commodities continued with copper prices reaching a one-year high. BTC and ETH reacted to the hot CPI print by dipping down ~2% but then recovering. However, the rest of the crypto market remained in the red, with Polkadot, Algorand, and Polygon slashing 3%, while Bitcoin Cash corrected down by almost 10%.
Details
Inflation jumped to a 7-month high of 3.5% in March, exceeding forecasts. Energy costs rose, especially gasoline, but some utilities and fuel oil eased. Food inflation held steady, but shelter, transportation and apparel prices jumped. The monthly CPI increase (0.4%) matched February’s but missed expectations. Core inflation remained unchanged at 3.8% (both monthly and annually).
30-year fixed mortgage rates jumped to a 5-week high (7.01%) in the week ending April 5th. Fed officials signaling a cautious approach to rate cuts, strong jobs data, and persistent inflation are blamed for the rise. Rates for jumbo loans and FHA loans also increased.
World Markets
Fitch Ratings downgraded China’s credit outlook to negative (from stable) citing concerns about its finances. China’s debt is rising as it moves away from a real estate-focused economy. Other major rating agencies have China at A+ (S&P) or A1 (Moody’s) with mixed outlooks.
Brazilian inflation continued to cool, hitting a 9-month low of 3.93% in March. This drop below the central bank’s target (4.5%) paves the way for further interest rate cuts. Transportation costs led the decline, with falling fuel prices. Food prices rose slightly. The monthly inflation rate was also minimal, the smallest in 8 months.
Currencies
Stronger-than-expected inflation data (3.5% YoY) sent the dollar soaring (up 0.7%). This suggests the Fed will hold off on rate cuts. The data, including steady core inflation and a higher monthly CPI, follows a strong jobs report. The market now expects less rate easing from the Fed (50 bps vs 60 bps) with no cuts until September.
The Euro tumbled below $1.08. Investors flocked to the dollar as expectations of a Fed rate cut faded. In Europe, markets awaited the ECB’s policy meeting. Though rates are expected to hold steady. The Japanese yen reached a 32-year low (152.7 yen per dollar). Hot inflation data is fueling expectations that the US Fed will maintain high interest rates, widening the gap with Japan’s near-zero rates. This is a boon for carry traders borrowing cheap yen to buy higher-yielding dollars. Japan’s central bank is watching closely, hinting at intervention if the yen weakens excessively.
Commodities
Copper prices soared to a 15-month high (over $4.30/lb) due to supply worries and rising demand. Chinese smelters are planning output cuts, adding to supply woes caused by mine disruptions in Africa and South America. This coincides with signs of a manufacturing rebound in the US and China, boosting demand for copper.
Thursday
Stocks rebounded on technical over-sold indicators after yesterday’s slump despite rising PPI and falling unemployment. The rise was led by Apple and Nvidia (up over 3%). The Fed likely wants to see further improvement before cutting rates. Internationally, the ECB holds its rate steady at 4.5%, prompting depreciation of the EURO on dovish comments, while oil is edging up due to growing tensions in the Middle East. BTC and ETH lingered just above 70K and 3.5K, respectively. Most of the crypto market is in the red, led by Uniswap, which dropped 10% on an SEC prosecution.
Details
Producer prices (PPI) rose modestly (0.2%) in March, the least since December. This follows a larger increase in February. Prices for services remained steady, but goods prices dipped slightly due to lower gasoline costs. Despite the monthly slowdown, annual producer inflation reached a 10-month high (2.1%).
Jobless claims dropped to a 1-month low (211th) in the week ending April 6th, defying expectations. This reversal follows an upward revision in the prior week’s data. The tight labor market aligns with the strong jobs report, potentially giving the Fed more room to keep interest rates high to fight inflation.
30-year fixed mortgage rates hit a 1-month high at 6.88% on April 19th, up slightly from the prior week. This rise mirrors a similar increase in Treasury yields. Inflation data may seem stable, but financial markets are wary. Mortgage rates were significantly lower (6.27%) a year ago.
Crypto
Grayscale’s Bitcoin ETF saw a surprisingly small outflow ($18 million) on Wednesday, a record low. This follows comments from the CEO suggesting selling pressure is fading. Analysts point to lower bankruptcy-related sales and high fees (1.5%) as reasons for the shift.
World Markets
The ECB kept interest rates at record highs (4.5%) for a fifth month. While inflation is easing, the bank remains cautious due to high service prices. It might cut rates if it’s confident inflation is on track to the 2% target. Future decisions will depend on data. China’s consumer inflation slowed sharply in March, rising only 0.1% YoY vs expectations of 0.4%. Food prices led the decline, falling due to lower pork and vegetable costs. Non-food inflation also eased. This comes after a larger increase in the previous month. Monthly CPI saw its biggest drop in 3 years.
Brazilian retail sales defied expectations, rising 1% in February (following a revised 2.8% jump in January). This suggests consumer strength despite high-interest rates. Sales growth was driven by pharmaceuticals, furniture & electronics, and personal care items. However, lower sales of food and fuel limited a steeper increase. Year-on-year, sales surged 8.2%, the highest in nearly two years.
Argentina’s central bank cut interest rates again (down to 70%) despite raging inflation (over 275%). This is the 3rd cut since December. It is prompted by Milei’s libertarian ideology, which aimed at maintaining the competition among producers rather than cutting off their money sources. While inflation has slowed recently, the country still faces recession and rising poverty despite positive investor sentiment.
Currencies
The euro dropped to a 2-month low ($1.07) after the ECB held rates steady. The ECB hinted at future rate cuts if inflation keeps falling. Investors are now expecting a small rate cut in June and a bigger one by year-end. China’s Yuan strengthened (7.25) after the central bank set a stronger exchange rate (7.0968) and data showed lower inflation. This follows a weakening due to hot inflation data from overseas. Strong car sales suggest recovering consumption.
Commodities
Oil prices stayed above $86 per barrel on worries of a wider Middle East conflict disrupting supply. Stalled peace talks between Israel and Hamas and potential Iranian retaliation for suspected Israeli attacks are fueling concerns. This comes despite a larger-than-expected US oil inventory build.
Meme-coin Comment: Markets Are Markets
Hearing “meme-coins” raises the brows of many. However, markets are markets and there is no “easy money” in any of them. Doubts? Just take a look at what experienced meme-coin traders are advising their followers:
- Rely on past successes. Find meme coins that are 1st on their blockchain;
- Buy when nobody else wants to buy;
- Set aside 20%-30% of your profits in a separate wallet;
- Be in the 1% minority;
- Have patience and conviction;
- Don’t blindly cut losses quickly if you have a sound thesis;
- Make contrarian plays.
Want more pragmatic advice? Here you go:
- Not constantly rotating capital
- Utilizing sniper bots
- Following insiders
- Maintaining small bets
- Adhering to a consistent strategy
- Sticking with winning trades while cutting losses
So, basically, they are advising prudent capital management, thorough research, sticking to winners while cutting others short, and contrarian thinking. So much for “a Gen-Z casino” 
I bet even the old Warren would be proud
Friday
On Friday, import prices rose as consumer confidence dipped, serving as a catalyst for a major stock technical sale. This was compounded by big banks’ disappointment with earnings and China’s anti-foreign-processor policy which worried tech investors. Tech stocks were hit especially hard, with AMD and Intel down sharply. In markets, the dollar, gold, oil (including gasoline), and other resources continue to surge due to intensifying geopolitical risks and traders’ uncertainties towards economic policies. BTC and ETH significantly dipped, with BTC briskly touching 65K and ETH reaching 3K. The rest of the crypto market plunged heavily, with some coins including ChainLink, Cardano, Algorand, Polkadot, Avalanche, and Polygon depreciating by 15% or more.
Details
Import prices rose for a third month straight (0.4% in March), the most since mid-2022. Fuel imports led the increase (up 4.7%), while non-fuel imports were slightly higher (0.1%). Overall, import prices are now slightly higher than a year ago for the first time in over a year.
Consumer confidence (Michigan Consumer Sentiment survey) dipped in April, below expectations. This follows a recent high in March. People are cautious due to the upcoming election’s potential effect on the economy. Inflation expectations are also ticking up slightly.
Crypto
A fifth of BlackRock’s new ETF investments this quarter went into their Bitcoin ETF (IBIT). This Bitcoin fund attracted $13.9 billion, the fastest-growing ETF ever for BlackRock, despite only launching in January. Overall, BlackRock saw strong inflows across its ETFs, with $67 billion entering in the first 3 months.
World Markets
China’s trade surplus fell sharply in March (to $58.55 billion) compared to last year, missing expectations. Exports dropped more than imports (7.5% vs 1.9%). Despite the monthly decline, China still has a surplus of $183.71 billion for the first quarter, driven by a slight increase in both exports and imports. India’s annual inflation dropped to a 10-month low of 4.85% in March, better than expected. Food inflation eased, with vegetables leading the decline. Prices for clothing, housing, and fuel also saw slower increases.
The Brazilian currency hit a new low in April due to global tensions and expectations of lower interest rates. Despite this, lower inflation and strong retail sales suggest a resilient Brazilian economy. Spain’s inflation rose slightly in March (3.2%) after hitting a 6-month low in February. Housing, utilities (due to VAT increase), transportation (fuels), and recreation costs all saw price increases. Food inflation slowed down. Core inflation also dipped (3.3%) to its lowest level since February 2022.
Both national and EU-harmonized inflation rose slightly compared to February. Italian factory sales plunged 3.1% in January, the biggest drop in almost 4 years. This follows a small rise in December. Both foreign and domestic demand fell. Sales were down across all categories, from car parts (intermediate goods) to furniture (consumer goods). This extends a year-long trend of declining factory sales.
Currencies
The dollar (DXY) reached a near 5-month high (106) in April on expectations of higher interest rates and geopolitical tensions. The dollar rose across the board, with the biggest gains against the Australian, New Zealand dollars, Euro and British Pound.
Commodities
Believe it or not, cocoa prices continued their crazy and absolutely unprecedented 6 months run, hitting a new record high (over $10,800/tonne, 5x compared to Nov 23). It is blamed on worries about lower supply. Extreme weather led to poor harvests in West Africa, a key producer. Traders are concerned about the upcoming mid-crop season in Ivory Coast, where dry weather could further limit output. Data shows cocoa shipments from Ivory Coast are already down significantly year-on-year.
Gold prices soared to a new record high (over 2.4K) in April due to safe-haven demand amid fears of war in the Middle East. Strong physical demand from China also bolstered gold prices.
Gasoline prices surged in April to a one-year high($2.82 per gallon) on fears of war in the Middle East. Despite a surprise rise in domestic gasoline supplies, concerns about oil disruptions from the region outweighed this, pushing prices up.
Comment: The World Divided Two Ways
This week illustrates the politics-over-economics trend as global regions, “The East” and “The West,” diverge politically and financially. Central banks’ policies reflect these shifts.
“The East,” serving as a low-cost manufacturing hub for “The West,” experiences faster inflation declines due to lower production costs, primarily food and energy. Conversely, “The West’s” reduced consumption, influenced by higher Fed rates and energy prices, slows Eastern manufacturing growth.
Despite its population size, Eastern markets lack wealth and infrastructure, hindering governments’ ability to stimulate economies with cheap credit, like China’s past efforts, where disparity, notably in real estate, persists.
Meanwhile, the West excels in services, aided by technology, especially in USA, while manufacturing stagnates, particularly evident in leading EU economies like Germany and France. As a result, America’s stubborn inflation surprises Fed officials.
Adding “The South-East” and “The South-West,” politically aligned with East and West respectively, complicates matters. “The South-West” benefits from preferential treatment, lowering local inflation. Conversely, “The South-East” struggles due to inadequate Eastern demand for exports and sheep imports.
Non-aligned countries like India and Saudi Arabia play their resource card to stabilize economies amid tariff threats. However, this strategy’s sustainability is questionable.
The economic divide deepens as political confrontations intensify (even leading to kinetic, military clashes) impacting central bank rates, budgets, investments, and trade. The West’s advantage lies in broader market instruments (treasures, debts) liquidity, allowing expansive government spending without sharp currency devaluations.
Conversely, the East moves towards government-steered economies, consolidating monopolies and controlling consumer habits. This shift, coupled with potential currency independence, challenges Western investors and leads to prolonged price pressures.
Tariff wars exacerbate these tensions, worsening Western consumer markets. Bitcoin, gold, and other anti-inflationary assets signal anticipation of economic upheaval amidst geopolitical strife.
On Week 16, earnings season kicks off with big names like Goldman Sachs and Netflix reporting. Retail sales and Fed speeches are also on tap. China’s GDP and Europe’s inflation rate are key global events to watch.
SVET Markets Weekly Update — April 1st – 5th 2024
On Week 14 jobs data fluctuated, leaving analysts bewildered. Meanwhile, Fed officials added to the confusion with their mixed messages on rate cuts. Globally, tensions between aging world leaders led to a downturn in commodities such as oil, gold, silver, zinc, and aluminum. Additionally, food prices, including meat and dairy, saw increases. Central banks, including the ECB in Frankfurt, sought to prop up struggling EU economies, while counterparts in China and India moved to devalue their currencies for competitive advantage. In Central and South America, as well as much of Africa, inflationary pressures persisted, forcing policymakers to maintain high-interest rates despite lackluster economic performance.
The crypto market, largely influenced by North American corporate investors, mirrored the stock market’s volatility, resulting in BTC and ETH experiencing a classic bearish double-top formation on daily charts. However, this pattern could shift to a bullish continuation flag if geopolitical tensions ease.
Monday
On Monday, stocks dipped after Q1 gains as manufacturing surprisingly grew, keeping the Fed on hold as inflation eased. Tech stocks rose (Microsoft, Nvidia, Amazon, Meta) while utilities lagged. Globally, China’s PMI surprised on the upside; oil remained steady. The dollar rose on manufacturing data, while the Turkish lira fell on local election results. Crypto markets plunged, with BTC forfeiting 3% and ETH dropping more than 5%. Major alts saw even steeper cuts, with Bitcoin Cash, Solana, Polkadot, and Polygon sliding more than 7%.
Details
The manufacturing sector grew marginally in March after 16 months of decline, exceeding expectations (PMI to 50.3). New orders and production rose, but employment continued to fall. Prices kept rising due to high material costs.
Crypto
Milei’s election win in November 2023 was met with excitement by digital asset supporters who hoped for a BTC-led future for Argentina. However, despite initial promises, Milei’s government has disappointed the crypto community by implementing new registration requirements for crypto firms in line with FATF rules. The National Securities Commission of Argentina has introduced a Registry of Virtual Asset Services Providers, requiring crypto firms to register or risk being banned from the country.
World Markets
The Caixin China General Manufacturing PMI rose to 51.1 in March 2024, surpassing market expectations and marking the fifth consecutive month of factory activity growth. This was fueled by increased new orders domestically and abroad, with foreign sales reaching a year high and output seeing the largest increase since May. However, employment continued to decline as firms remained cautious about costs.
Spain’s new car sales dipped 4.7% in March after a strong February. Despite the March decline, sales for the first quarter are still up 3.1% year-on-year.
Mexico’s manufacturing PMI held steady at 52.2 in March, showing continued growth despite slightly slower hiring. New orders and output rose, but worries about US demand dampened optimism. Manufacturers raised prices due to higher input costs.
In March, the Russia Manufacturing PMI rose to 55.7, indicating the sector’s strongest growth since August 2006. Output and new orders saw significant increases, with foreign demand rising for the first time in five months. This led to higher employment rates and increased input buying to replenish stocks.
Currencies
The dollar rose close to a two-month high after data suggested manufacturing growth and inflation are on the rise. Investors are looking ahead to economic reports and Fed comments this week for clues on future interest rate cuts. The dollar gained against major currencies like the Euro.
The Turkish lira dropped to a new low of 32.4 per USD following Erdogan’s AKP party’s defeat in local elections. Concerns arose over potential shifts in economic policies, but Erdogan vowed to address inflation. Turkey’s inflation hit 67.07% in February 2024, prompting citizens to invest in gold and USD-linked assets. The central bank raised interest rates by a significant 4,150 bps over the past year amid economic challenges.
Commodities
Oil prices stabilized around $83 per barrel, hitting a 5-month high, with anticipation for OPEC+’s meeting to extend production cuts. Investors are monitoring Ukrainian drone strikes on Russian refineries, peace efforts in Gaza, and Chinese manufacturing growth.
Tuesday
On Tuesday, stocks dropped sharply as strong economic data (job openings, factory orders) dimmed hopes of a Fed rate cut in June. Tesla slumped due to lower-than-expected deliveries. On world markets, silver is up on growing geopolitical threats. Eurozone production activity remains subdued, the Euro weakened on ECB rate cut expectations, and the Indian rupee depreciated as regulators aim to compete with China. BTC and ETH continued their vertical downfall alongside stock indexes, dropping another 7% each. Some other major coins, including Uniswap and Avalanche, shrank by more than 8%.
Details
Job openings rose to 8.76 million in February, exceeding expectations. Gains were seen in finance, government, and some service sectors. Openings fell in information technology and the federal government. Job growth varied regionally, with the West showing the strongest increase.
Crypto
Singapore tightened crypto rules (PS Act) to protect users and ensure financial stability. All crypto businesses, even those indirectly involved, must comply. Regulations apply to cross-border transfers. The Monetary Authority of Singapore (MAS) oversees these measures to combat money laundering and terrorism financing.
World Markets
Eurozone factory activity (PMI) remained in decline for March, but the rate softened. This revision to 46.1 reflects improving supply chains and a slower drop in output. New orders and exports also fell less sharply. Despite some optimism, job cuts continued due to weak growth expectations.
German inflation eased to 2.2% in March, the lowest in nearly 3 years, meeting market expectations. This brings it closer to the ECB’s target of 2%. Both overall and EU-harmonized rates declined. Food and energy price drops led the slowdown, while services inflation rose slightly. Core inflation also dipped to its lowest level since mid-2022.
French manufacturing PMI dipped in March, extending a 14-month decline. However, the drop slowed, with some restocking and backlog clearing. New orders contracted further, leading to job losses. Despite this, manufacturers remain optimistic about future demand due to expected economic improvement.
Currencies
The euro weakened to a near two-month low below $1.08. Investors expect the ECB to cut rates more than the Fed this year as German inflation slows to a 20-month low of 2.2%. While French inflation dipped, rates in Italy and Spain rose slightly.
The Indian rupee weakened past 83.4 to the dollar, near a record low. This is due to expectations of less central bank support (RBI) and potential weakening of the Chinese yuan (PBoC). A weaker rupee could help Indian exports compete with China’s. High energy prices also pressured the rupee as India imports oil and coal.
Commodities
Silver surged past $25.50 per ounce, a year-high, on Middle East tensions and safe-haven demand. Industrial use, like solar panels backed by IKEA’s EV grant, also boosted prices. However, strong US economic data dampened hopes of an immediate Fed rate cut, sending those bets below 60%. Investors now focus on jobs data and Fed speeches for clues on future rate changes.
Wednesday
On Wednesday, stocks edged higher after mixed economic data. The services sector slowed, but job growth remained strong. Tech stocks rose except for Microsoft and Intel, which dropped due to the earthquake in Taiwan. Globally, Eurozone inflation is down to a 2-year low, while gold and oil continued to over-perform amid tense geopolitical disputes. The crypto market’s slide paused, with BTC and ETH hovering above major resistance levels at 66K and 3.3K respectively. Meanwhile, some major coins continued to slump, with Bitcoin Cash and Litecoin down more than 8%.
Details
Service sector growth slowed (ISM PMI to 51.4). New orders, inventories, and employment weakened. Prices eased but remain a concern. Private businesses added 184K jobs in March, the most in 8 months. Service sectors like leisure/hospitality led gains. Goods production added jobs in construction and mining, but manufacturing saw little growth.
World Markets
Eurozone inflation dipped to a 28-month low of 2.4% in March, missing expectations. Both headline and core inflation rates fell. Energy prices led the decline, while food and goods price growth slowed. Service inflation remained steady. Monthly inflation stayed positive at 0.8%.
Eurozone unemployment held at a record low 6.5% in February, despite a slight rise in jobless numbers. Youth unemployment remained flat at 14.6%. Spain has the highest rate (11.5%), while Germany enjoys the lowest (3.2%). This is an improvement from 6.6% unemployment a year ago. Turkey’s inflation surged to a 16-month high of 68.5% in March, exceeding forecasts slightly. Transportation and housing costs rose the fastest, while food inflation eased. Core inflation climbed to 75.2%. Despite a slower monthly increase, high prices remain a major concern.
Currencies
The dollar weakened after a surprising slowdown in service sector growth. This data clashed with other strong economic indicators this week like job growth and factory orders. Investors now await Fed Chair Powell’s comments as hopes for a June rate cut hover around 59%.
Commodities
Oil prices hit a 5-month high above $86 per barrel after OPEC+ extended production cuts. Supply concerns due to attacks on Russian facilities, Middle East tensions, and a focus on output reduction by key members like Iraq pushed prices higher. Gold surged to record highs above $2,280 per ounce. Rising tensions in the Middle East and Ukraine fueled demand for safe havens. Mixed signals on Fed policy exist, with some expecting 3 rate cuts this year. Investors await Friday’s US jobs report and Fed comments for clues on interest rates.
Thursday
Stocks rose as hopes for Fed rate cuts grew again after jobs data and Powell switched to dovish comments once more. All sectors gained, with tech (Meta +3%) and real estate leading. Alphabet fell on news of potential AI search fees. On world markets, ECB bureaucrats reiterated their pro-growth stance, weakening the Euro as service PMI grew, while copper prices jumped on China’s economic recovery hopes. The crypto market improved on technical volatility, with BTC reaching 68K and ETH — 3.4K. Bitcoin Cash (+7%) and Binance (+5%) were among the best daily performers.
Details
Jobless claims unexpectedly surged to 221,000, the highest in two months. This contradicts recent strong labor data, suggesting higher interest rates might be slowing the job market.
Job cuts jumped to 90,309 in March, the highest in 15 months. Tech (14,224) and government (36,044) led the losses. This brings Q1 job cuts to 257,254, exceeding Q4 2023 but down from Q1 2023. Cost-cutting is the main driver, with tech still leading job cuts overall.
Imports surged to a 16-month high of $331.9B in February, driven by a $7.1B increase in goods. Consumer goods (phones, household items) led the rise, followed by food, beverages, and auto parts. Service imports also climbed, with travel and transportation sectors showing the biggest gains.
Crypto
Memecoins dominated the crypto market in Q1 2024 (RWA being the second), surging over 1300% on average. Solana (SOL) was a major driver. This outpaced other sectors by a wide margin, with Brett (over 7700% gains) leading the pack. The sector now boasts 6 major cryptocurrencies by market cap. This impressive performance has caused mixed reactions within the crypto market.
World Markets
Eurozone services sector PMI (51.5 in March) grew modestly after 6 months of decline. Sales improved, but mainly domestically. Businesses added staff, though slower than before. Price pressures eased to multi-month lows. Service providers remain optimistic about future activity.
Currencies
The dollar weakens for a third day (104) as expectations of Fed rate cuts grow. Jobless claims and March job cuts rose, and service sector growth slowed. Investors await Friday’s jobs report for clues. Fed Chair Powell signaled rate cuts likely in 2024, but data dependence remains. The Euro and other currencies gained against the dollar.
Commodities
Copper prices soared to a 14-month high (over $4.20/lb) due to a weaker dollar and supply concerns. Lower US interest rates (expected due to weak service sector data) boosted demand from global manufacturers and key importers like China (despite some demand worries there). Mine disruptions in Africa added to supply risks, prompting Chinese smelters to cut output.
Friday
On Friday, stocks increased in a technical recovery after Thursday’s sharp downturn, despite strong jobs data. The unexpected drop in unemployment and continued wage growth suggest a robust labor market, potentially delaying Fed rate cuts. Despite Friday’s gains, the market is on track for a weekly decline. Globally, gold hit a new ATH, silver surged above $27, and Zimbabwe is launching a new currency. The crypto market was mostly in the red, despite BTC recovering slightly above $68K. Solana (-5%) and Algorand (-3%) led the decline.
Details
Unemployment unexpectedly dipped to 3.8% in March, defying expectations. Job gains were strong (498th) and the labor force participation rate increased. Despite Fed rate hikes, the job market remains tight.
Crypto
Grayscale reshuffled its crypto funds based on index rebalancing. Cardano and Cosmos were removed from some funds and proceeds reinvested in existing holdings. The Large Cap Fund now holds mostly Bitcoin and Ethereum as well as 4.52% of Solana, and ~3% in XRP and Avalanche, while the Smart Contract Platform Ex-Ethereum Fund focuses on Solana and Cardano (plus, 12.25% — Avalanche, 8.53% — Polkadot and 6.25% Polygon). The DeFi Fund remains unchanged (8% — Uniswap, 20.41% — MakerDAO, and 13.17% — Lido).
BlackRock added big names like Goldman Sachs and Citigroup as authorized participants for its Bitcoin ETF. This move suggests major financial institutions are increasingly interested in being part of the cryptocurrency market. Crypto VC funding surged 38% and funding reached projects not seen since late 2021. This might signal a new wave, similar to pre-bull run periods. Crypto-focused VCs like Andreessen Horowitz are leading the charge.
World Markets
Hong Kong’s Hang Seng index ended flat (16,723.92) despite initial morning losses. Positive retail sales and business activity data lifted investor sentiment. Upcoming US jobs data and China inflation figures are on watch. Financials gained, while tech, property, and consumer stocks fell. The index is down 1.1% for the week due to Fed rate hike concerns and geopolitical tensions. The index reached its 1997 level when Hong Kong was officially handed back to China by the United Kingdom on July 1. Overall, the Index halved (ATH ~32.7K) since the “Umbrella Movement” hit Hong Kong in 2014. It was a political movement that emerged in response to proposed reforms to the electoral system by the Chinese government, which were viewed by many in Hong Kong as restrictive.
Currencies
The Mexican peso surged to a near 7-year high (over 16.49 per USD) due to low volatility, high interest rates, and economic strength. Even with a recent rate cut, Mexico’s high real rates make the peso attractive (carry trade). Some central bank officials worry about inflation but support the peso’s stability.
Zimbabwe is launching a new currency to replace its failing dollar. Backed by foreign currencies, gold, and other valuables, it aims to tackle inflation and a weak economy. This is the first move by the new central bank governor to address Africa’s weakest currency. The new currency launches at a set rate on April 8th with lower interest rates (20% vs 130%).
Commodities
Silver prices surged above $27 after strong jobs data reduced expectations of Fed rate cuts. The data showed unexpected job gains and steady wage growth. This aligns with comments from Fed officials suggesting slower rate cuts. Silver is up 6.5% for the week due to Middle East tensions and hopes for future easing.
Food prices edged up in March, ending a three-month decline. Vegetable oils surged 8% to a year-high, while dairy prices reached an 11-month peak. Meat prices also rose slightly. However, cereal and sugar prices fell, with cereals reaching a 40-month low. This is due to strong competition among wheat exporters and a production increase in India for sugar.
On Week 15, investors eye key data: US inflation, FOMC minutes, consumer confidence, and trade figures. Global focus includes interest rate decisions, inflation announcements, and China’s economic data.
SVET Markets Weekly Update – March 25th–29th, 2024
On Week 13, the economy continued to show signs of slowing down, with major regional manufacturing indexes indicating weakness. Prices decelerated across main sectors, while FOMC members sent mixed signals about potential rate cuts, leading to mixed stock results. The S&P and DJ hit record highs, while the Nasdaq underperformed and the dollar index rose.
Globally, gold reached a new ATH as major world banks softened their hawkish anti-inflationary rhetoric. Inflationary dynamics eased worldwide, although the yen stumbled as the Japanese economy showed some inflationary signs. The Chinese economy’s performance was still under question, despite upbeat government economic reports and promises to support the economy from CPC officials. Meanwhile, cocoa prices surged on pure speculative rush.
Crypto markets relented, with a double top pattern forming on BTC and ETH daily charts, leading many analysts to worry about a potential market reversal on a sell-the-news event after the upcoming BTC halving.
Monday
On Monday, new home sales decreased, Texas manufacturing slowed down while Chicago’s picked up, stocks paused after last week’s record highs. DJ fell, S&P dipped, and Nasdaq remained flat. Consumer staples and industrials led declines, while energy outperformed. Intel and Microsoft dropped on China news (Intel processors ousted from government PCs). Chipmakers surged. Internationally, the Yuan rose on the government’s support while cocoa continued to rally. BTC and ETH led the crypto market, gaining over 6%, driven by technical factors and forming a ‘double top’ pattern.
Details
New home sales dipped slightly in February (662Th annualized rate) compared to January, missing expectations. This aligns with rising mortgage rates. Sales dropped in some regions but rose in others. The median home price was $400,500. There’s currently an 8.4-month supply of new homes available.
Chicago Fed’s economic growth index rose slightly to 0.05 in February, indicating a modest pick-up in economic activity. Improvement was seen in production, sales, and inventories compared to last month.
Texas manufacturing slowed down in March according to a Dallas Fed survey. Production, new orders, and shipments all fell. Business outlooks also weakened, with increased uncertainty. This suggests slower growth for Texas manufacturing. The 10-year Treasury yield rose as investors wait for clues on Fed rate cuts. Atlanta Fed Bostic expects a single cut instead of two, while Powell hinted at three cuts. Key inflation data and Fed official comments are eyed. Bets on a June rate cut are rising.
Crypto and Local Banks
Iceland ditches Bitcoin mining for “real” farms. Worried about food security and energy use, the country prioritizes agriculture and self-sufficiency, aiming to feed its people and lessen reliance on imports. Renewable energy will focus on homes and essential industries, not digital currencies.
Hundreds of small banks are struggling after last year’s troubles. Sources analyzed about 4000 institutions and found 282 with high levels of commercial real estate exposure and unrealized losses from the rate surge. Mergers have stalled. Behind doors, fearing publicity, regulators are quietly pressuring banks to improve their finances.
World Markets
Ghana’s central bank held interest rates at 29% to fight inflation. Inflation eased slightly to 23.2% but remains high. Economic growth in 2023 (+2.9%) exceeded targets (+2.3%), but the trade surplus narrowed due to lower exports.
Currencies
China’s Yuan strengthened to 7.25 after state banks intervened and signaled support. This follows recent weakness on economic growth worries.
Commodities
Rice futures prices fell to a 4-month low of $17.8 per hundredweight as the USDA forecast larger global rice supplies and slightly lower demand (Pakistan’s high stocks, India’s growing production). Cocoa prices continued their unprecedented rise, hitting a record high of $9.4K a ton (+45% in March). This is explained by supply concerns in top growers Ivory Coast and Ghana. Poor harvests hurt by El Niño rains and heat. Ghana cut its production forecast. Prices may rise further as the smaller mid-crop season approaches.
Tuesday
Stocks were in the red on Tuesday as investors awaited inflation data and Fed clues. Durable goods orders surprised on the upside, but consumer confidence missed, and regional manufacturing activity continued to slow down. The financial and consumer discretionary sectors led, while utilities and energy lagged. Tesla and Reddit rose on news. In the world’s markets, the yen weakened despite Japanese government support, the Brazilian real is cheaper due to export concerns, and the Swiss franc fell against the USD due to its central bank’s rate easing move. BTC and ETH stumbled, meeting resistance at 70K and 3.6K, respectively, increasing the chances of forming medium-term side-channels on their price charts.
Details
Home prices rose faster than expected in January (6.6% YoY), with San Diego and Los Angeles leading the gains. However, prices dipped slightly month-over-month due to rising mortgage rates. Only Southern California and Washington D.C. saw price increases in January.
Factory orders for durable goods rose 1.4% in February, exceeding expectations. This follows a January decline. Orders for transportation equipment (cars, machinery) bounced back significantly. Business spending plans also showed a modest increase.
Richmond manufacturing index fell to -11 in March, signaling a slowdown. New orders and backlogs dropped sharply. Despite this, employment remained stable and wage growth continued. Businesses are still somewhat optimistic, but less so than last month.
A Texas service sector business survey showed a decline in March (index -5.5). Companies’ outlooks remained flat, but uncertainty rose. Revenue growth slowed, and employment was steady. Price pressures eased, but future activity expectations stayed positive.
Crypto
The London Stock Exchange will start trading Bitcoin and Ethereum ETNs in late May, pending regulatory approval. This move aims to bring cryptocurrencies to the traditional stock market.
World Markets
German consumer confidence rose insignificantly to -27.4 in April, the highest level of 2024. Income and economic outlook improved modestly. However, willingness to buy remains very low, and saving is still high. Experts say a sustained economic recovery hinges on lower inflation and clearer government plans.
Spain’s economic growth slowed in 2023. The final quarter came in at 2.0%, following a similar increase in the previous quarter. This brings the full-year growth to 2.5%, down significantly from 2022’s 5.8% expansion.
Currencies
The weak yen prompted warnings from Japanese officials. Finance Minister Suzuki didn’t rule out intervention, and currency diplomat Kanda called the decline “speculative.” This follows the Bank of Japan’s recent rate hike, which had little impact on the currency.
The Swiss Franc weakened to a 5-month low. The Swiss central bank cut rates rate by 25bps to 1.5% and lowered inflation forecasts (also to 1.5%), while the US Fed held rates due to high inflation. This policy contrast caused the Franc to depreciate.
The Brazilian real weakened (to 4.98) due to lower inflation and a weak export outlook. Lower inflation data increased expectations of a dovish stance by the central bank, potentially slowing future rate cuts. Concerns about slowing demand for iron ore and soybeans in China, key Brazilian exports, also weighed on the real.
Wednesday
On Wednesday, stocks rebounded after a two-day slump. The Dow surged on strong performances from Apple and Intel, while the S&P hit a record high. Tech stocks lagged, with Nvidia dropping. Investors await Fed comments and inflation data for clues on rate cuts. Utilities, real estate, and industrials led gains. In the world’s markets, Chinese industrial profits surged, while EU consumer sentiments improved only marginally. BTC and ETH continued to slide down by several percentage points, forming a side-channel on daily graphs. The crypto market followed suit, with Algorand, Polygon, and Solana dropping by 3% and more.
Details
30-year mortgage rates dipped barely noticeable to 6.93% (previous: 6.97%) in late March. This could increase housing inventory, but experts say it will likely be slow as rates are expected to fall further this year.
Crypto
Republican lawmakers urged the SEC to clarify rules for digital assets like Ethereum, particularly regarding custody services. They argue Ethereum isn’t a security and current uncertainty harms the market. This impacts offerings like Ethereum ETFs and the broader digital asset landscape. Fidelity applied to launch a spot ETF. This filing offers the possibility of some holdings being staked to earn rewards.
World Markets
Chinese industrial profits surged 10.2% in early 2024, reversing a 2023 decline. This points to an economic recovery fueled by government support. Private sector profits grew much faster than state-owned ones. Gains were strong in tech, autos, and energy, while profits fell in mining and agriculture.
Eurozone economic confidence rose to a 3-month high (96.3) in March, beating expectations. Both manufacturers and consumers were more optimistic, with sentiment also improving in services and retail. Inflation expectations eased slightly, while manufacturers expect to raise prices. Confidence rose in France, Italy, and Germany, but fell in Netherlands and Spain.
French consumer confidence rose in March to a near two-year high but stayed below the long-term average. People felt better about finances, standard of living, and future inflation. They were also more optimistic about buying big items and job prospects.
Spain’s inflation rose to 3.2% in March, after a dip in February. This is in line with expectations. Energy prices drove the increase, but food price growth slowed. Core inflation, excluding volatile items, dipped to its lowest level in over two years — 3.3%.
Russia’s industrial output surged to a 2-year high of 8.5% in February, up from 4.6% growth in January. Manufacturing, utilities, and mining all saw strong gains. The overall Russian economy also grew at a solid pace of 4.6% year-on-year in January.
Currencies
The Euro held steady around $1.08, likely ending the quarter down vs. the USD. This follows the ECB signaling future rate cuts due to falling inflation. Investors expect a cut in June, with some anticipating more by year-end. The dollar strengthened as US rate cut expectations eased.
The yen weakened to a 32-year low (152), sparking talk of intervention by Japanese officials. Finance Minister Suzuki warned they might take action. This follows the Bank of Japan’s recent rate hike, which had little impact on the currency’s decline.
The British pound held steady (1.26) but is on track for a quarterly decline versus the dollar. This follows dovish signals from the Bank of England, which kept rates unchanged despite inflation. Some policymakers shifted toward holding rates, leading markets to believe the UK could cut rates before the US, but one official downplayed that expectation.
South Africa’s rand gained slightly (18.9) after the central bank kept rates high to fight inflation. Inflation is near the target range, but policymakers expect it to take longer to cool down. This means interest rates will likely stay high for a while.
Mexican peso strengthened to an 8-year high (16.6) due to lower unemployment and bets on continued tight monetary policy to fight inflation. The central bank cut rates slightly but signaled a wait-and-see approach.
Thursday
Stocks barely budged at the close of Q1, with investors awaiting inflation data and Powell’s comments. This caution persists despite a strong quarter for stocks, with the S&P up 10% (its best performance since 2019). Internationally, gold reached a new ATH on expectations of global rate cuts, oil rose due to geopolitical tensions, and the dollar index is up following hawkish comments from FOMC members. In the crypto market, BTC surpassed 70K and ETH reached 3.5K once again. Bitcoin Cash continued its surge, adding 7% and surpassing 575.
Details
The economy grew at a solid 3.4% annual rate in Q4 of 2023, slightly better than first thought. This was driven by stronger consumer spending on services and increased business investment in areas like technology and structures. Housing investment grew modestly, while government spending rose more than expected. Trade played a smaller role as both exports and imports grew slower than initial estimates. A bigger-than-expected reduction in business inventories also weighed slightly on the final growth figure.
Jobless claims unexpectedly fell to 210K in late March, better than expected. This continues a trend of low claims, but a separate measure of ongoing unemployment ticked up slightly. The data suggests a tight labor market, potentially allowing the Fed to wait before cutting rates.
The Chicago PMI showed a deepening contraction in March (index 41.4). This is the 4th straight month of decline and the worst in 10 months. New orders and production fell, while employment surprisingly rose. Prices paid by businesses also dipped. Also, the Kansas City Fed’s manufacturing index plunged to -9 in March, indicating a steep decline in production.
At the same time, consumer confidence (Michigan Consumer Sentiment Index) rose to a 29-month high of 79.4 in March after a revision. Both expectations and current conditions improved, while inflation expectations dipped slightly.
Crypto
A new report by Statista predicts a surge in global cryptocurrency use. Here’s a quick breakdown:
Russia: Projected to have the world’s second-highest number of crypto users (38.5 million) by 2027, boasting the fastest growth rate (15% annually).
USA: Currently leads with 52.8 million users, expected to nearly double by 2027 (102.2 million).
Europe: Combined user base to reach 191.6 million by 2027 from 101.5 million in 2022 (14% annual growth).
Rest of the World: Expected to experience explosive growth, jumping from 291.7 million users in 2022 to 729.3 million by 2027 (20% annual growth).
World Markets
German retail sales dropped 2.7% YoY in February. This follows a record low in March 2023 and indicates continued weakness in the retail sector. Germany’s unemployment rate stuck at a 15-month high of 5.9% in March. Disparities remain, with Bremen and Berlin worst hit, while Bayern and Baden-Württemberg fare best. South Africa’s producer price inflation (PPI) dipped to 4.5% in February (below expectations), after a higher reading in January. The pace of price increases slowed down for various goods. Monthly inflation was also lower than forecast. Brazil’s unemployment edged up to 7.8% in early 2024, but remains low compared to levels (up to 15%) since 2015. The number of unemployed people increased, but wages also grew slightly.
Currencies
The dollar rose to near a six-week high around 104.4 after a Fed official hinted at delaying rate cuts. This comes as inflation data remains strong. Investors await the key PCE inflation report for clues. The dollar gained ground against most currencies but could weaken versus the yen if Japan intervenes to support it.
Commodities
Gold prices surged to a new ATH, on track for its biggest monthly gain (+8.5%) in over a year. This rally is fueled by hopes of Fed rate cuts despite stubborn inflation. Investors see gold as attractive due to lower yields and ongoing geopolitical tensions. The key inflation data on Friday will be closely watched for clues on the Fed’s future moves. Oil prices climbed above $82 per barrel for a third month in a row. This is despite a surprise inventory build and ongoing geopolitical tensions. The rise is fueled by expectations of OPEC+ maintaining production cuts at their upcoming meeting, along with higher refinery activity.
Friday
The stock market is closed for the Easter break. Powell delivered his remarks at the San Francisco Fed, indicating he’s not in a hurry to cut rates, contrary to majority expectations. This may reflect negatively on Monday’s market opening. Globally, gold continues to outperform, hitting a new ATH at $2,230 while steel prices fall to a 4 year low on the weakening Chinese economy. BTC and ETH remained within narrow ranges of $72K-$68K and $3.6K-$3.4K on hourly charts, forming a double top pattern on daily ones. Meanwhile, Bitcoin Cash keeps rallying, rising approximately four times YoY and outperforming all major alts except Solana, which surged approximately eight times YoY.
Details
Core inflation (PCE), excluding food and energy, remained steady in February at 0.3% monthly and 2.8% annually. Personal income grew, but at a slower pace than January. Spending surged in February, driven by services like finance and transportation, along with car purchases. This suggests inflation might be plateauing, while consumer confidence is rising.
Crypto
Bitcoin Cash (BCH) saw a dramatic reversal in mid-February, skyrocketing 55% in a week. This surge comes ahead of a key event: the halving on April 3rd, which cuts new coin creation in half. This, along with the launch of BCH futures contracts on Coinbase and a rising network hash rate, has fueled a return of investor interest and speculation about BCH’s future. Even BCH co-founder Roger Ver is reigniting the debate about BCH’s role as the “true” Bitcoin.
A UK government task force published a report exploring how blockchain technology can be used in investment funds. This builds on their earlier work and looks at using tokens as collateral and streamlining the investment process. The government welcomes this progress, highlighting the UK’s position as a leader in financial innovation.
Crypto analysts argue that cryptocurrencies, particularly meme coins and NFTs, are better suited for the modern attention economy than Web2 platforms, which struggle to accurately measure and compensate for user attention.
World Markets
Ukraine’s current account deficit shrank significantly to $111 million in February 2024, compared to $705 million a year earlier. This is due to a sharp drop in both service and good imports. Smaller surpluses from other areas partially offset this improvement. Vietnam attracted $4.6 billion in foreign investment in the first quarter of 2024, up 7.1% YoY. Pledges for future investment also rose, indicating continued growth. Manufacturing received the most investment, with Singapore and Hong Kong as the top sources.
Commodities
Gold prices remained near record highs above $2,230 despite thin trading. This is due to expectations of central banks cutting rates, including the Fed’s possible move in June. Geopolitical tensions also boosted demand for safe-haven gold. Steel prices plunged to a 4-year low due to weak demand in China. Steel mills are taking in iron ore, but production is down as construction slows. This reflects a gloomy outlook on China’s property market despite government attempts to boost it.
During Week 14, locally focus is on jobs data and economic activity indicators. Globally, inflation reports and manufacturing health are key. Trade data and interest rate decisions will also be watched closely.
Comment: On falling PMI in major States
So, we still have burgeoning stocks coupled with a weakening economy, along with Powell’s constantly dwindling influence. He continues to play political games in an election year, giving the market hints on impending cuts, only to retract them, trying to navigate between pressure from both Democrats and Republicans. Meanwhile, economic data from the week confirmed the economic slowdown.
Democrats are worried about their falling popularity among key, low-income electorate due to high rates, affecting mortgages and slowing the economy. Plus, accumulated inflation pressure is unbearable. At the same time, Republicans enjoy rates, which undermine Democrats’ position. Let’s see how things develop.
In Kansas, the main manufacturing industries heavily impacting regional PMIs include transportation equipment manufacturing (35%), machinery manufacturing (25%), and food manufacturing (20%).
Corporations such as Spirit AeroSystems Holdings Inc., Textron Aviation, and Cargill are major players in transportation equipment manufacturing, machinery manufacturing, and food manufacturing respectively, significantly influencing regional PMIs.
In Chicago, the dominant manufacturing sectors influencing regional PMIs are machinery manufacturing (30%), fabricated metal product manufacturing (25%), and food manufacturing (20%).
Prominent corporations like Caterpillar Inc., John Deere & Company, and Archer-Daniels-Midland Company are key contributors to machinery manufacturing, fabricated metal product manufacturing, and food manufacturing respectively, impacting regional PMIs.
In Michigan, key manufacturing industries significantly affecting regional PMIs are transportation equipment manufacturing (40%), machinery manufacturing (25%), and fabricated metal product manufacturing (20%).
Companies like General Motors, Ford Motor Company, and Fiat Chrysler Automobiles are dominant players in transportation equipment manufacturing, significantly affecting regional PMIs.
So, falling regional PMIs indicate a rapidly worsening situation in key industries such as transportation, food, and machinery across the country. The Fed must pay attention to that.
Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest into your bright future without hassle. For more on SVET Value: https://evernomics.com/
SVET Markets Weekly Update (March 18–22, 2024)
On Week 12, the Fed kept its rate unchanged while hinting at a hawkish policy reversal. Stock markets reacted with new ATHs, while BTC and ETH still lingered after the massive 10% correction following the quarterly options expiration. In world markets, stock indexes rallied when major central banks, including those in China and Brazil, began pivoting their policies from anti-inflationary to pro-growth. The ECB also signaled a softening of its rate hike rhetoric.
Monday
On Monday, stocks rebounded as investors focused on AI advancements ahead of the Fed meeting, overshadowing interest rate hike concerns underpinned by homebuilders’ rising confidence. Apple and Alphabet benefited from news of AI integration. On the world’s markets, the Chinese manufacturing sector added 7% unexpectedly, while oil prices continued to grow on worsening geopolitics and lower supplies. The crypto market was in the red, experiencing a continuing correction with BTC hovering slightly above 67K and ETH dipping below 3.5K. Among major alts, only Avalanche (+7%) continued to rise.
Details
Homebuilder confidence jumps to 8-month high (51) in March as low existing inventory pushes buyers to new construction. Mortgage rate dip below fall’s peak further fuels demand.
Crypto
Digital assets see record inflows for two straight weeks, reaching $2.9 billion last week. This pushes the yearly total to $13.2 billion, surpassing 2021’s bull run. BTC dominates with nearly all inflows (99.9%), while overall trading volume remains steady at $43B — 47% of overall global BTC volumes. Despite China’s strict crypto regulations, Chinese investors made $1.15B, contributing to the global total of nearly $38B. The US remains the leader with $9.4 billion in crypto earnings, followed by the UK at $1.4B. Hong Kong, a part of China, also saw significant crypto activity with $250M in gains.
BlackRock’s BTC trust sees high trading activity with an average daily trade size of $13K, suggesting retail investor interest (~250K trades in a day, a trade size is ~326 shares, or ~$13K). El Salvador accumulated over $65 million in unrealized BTC profit. According to a survey conducted by the Central American University, only 12% of the local population have used BTC at least once to pay for goods and services in 2023.
World Markets
China’s manufacturing output roared back in Jan-Feb, growing 7% YoY, exceeding expectations (5%) by far. This is the fastest pace in nearly two years, driven by strong manufacturing and utilities.
Currencies
Brazilian real tumbles to a 4-month low (over 5 per USD) as investors weigh potential interest rate cuts in Brazil vs. expected hikes by the Fed.
Commodities
Oil prices jump 2% to hit a high of $82.72 per barrel (highest since October) due to several factors: lower exports from Iraq and Saudi Arabia, signs of rising demand in China and the US, and ongoing geopolitical tensions impacting supply. Copper prices surged to a new high since April 2023 (above $4.1 per pound) on strong Chinese economic data (factory output +7%, retail sales +5.5% yoy). Smelter production cuts due to low concentrate prices also contribute to the rise. However, a 9% decline in property investment remains a concern.
Tuesday
Stocks are flat ahead of the Fed meeting, ignoring the sudden surge in building permits. No rate hike is expected. Internationally, Japan increased its key interest rates to 0.1% for the first time in eight years. The crypto market was hit by a second wave of correction, with Bitcoin reaching 62.4K and Ethereum down to 3.2K. Some altcoins, including Solana, Polkadot, and Cardano, slid more than 7%.
Details
Building permits jump 1.9% to a 1.52M annual rate in February, exceeding expectations and hitting a post-August high. Gains in Midwest and Northeast offset declines in other regions.
Crypto
Former Treasury Secretary says a forgotten method (Arthur Okun’s pre-1983 system) shows inflation is much worse (18% vs official 4.1%) as it considers housing costs and interest rates. “Price indexes do not include borrowing costs. Thus, when interest rates jumped last year, official inflation did not fully capture the effects it would have on consumer well-being”. Over $122 million poured into 27 projects in a week on the Solana, driven by the memecoin craze and booming DEX activity. Grayscale Bitcoin Trust sees the biggest outflow ever ($640 million) as Bitcoin dips and investor sentiment sours.
World Markets
Breaking with 8 years of negative rates, Japan hikes rates to 0.1% to combat inflation and support rising wages. They’re also scaling back asset purchases with some flexibility to adjust. Eurozone economic sentiment surges to a 14-month high (33.5) in March, with analysts mostly expecting stable activity. However, inflation expectations remain deeply negative (-64.3) and the current economic situation is still seen as weak (-54.8). Russia’s borrowing costs soar (13.4% yield on 10-year bond) due to high inflation (is at 7.7%, with a 4% target), weak consumer response to rate hikes, and government spending concerns (budget deficit is RUB 1.474B in Jan-Feb).
Currencies
Euro weakens near $1.08 as dovish ECB signals (possible rate cuts) counter slowing wage growth. 5 out of 26 members of the central bank governors (Spain, the Netherlands, Ireland, Greece, Slovakia) have publicly supported rate cuts in June. British pound tumbles to 2-week low ($1.27) as investors eye key inflation data and central bank decisions this week. BoE is likely to hold rates, but mulls August cuts, unlike ECB and Fed’s expected June moves.
Wednesday
On Wednesday, stocks soar to new ATHs after the Fed maintains rate cut plans. Tech leads rally, with mega-caps like Meta and Apple up over 1%. In world markets, gold set a new record at $2222. The crypto market surged back with BTC and ETH gaining about 7%.
Details
Fed holds rates at a 23-year high of 5.25%-5.5% but promises three cuts later in 2024, with projections for stronger economic growth but slightly higher inflation. They see unemployment falling to 4% this year.
Crypto
With BTC ETFs approved, the pressure is on for ETH ETFs. Several companies are vying for a green light from the SEC, with deadlines approaching. Despite regulatory hurdles and DeFi challenges, analysts remain optimistic about Ethereum’s strength and growing DeFi ecosystem. DeFi protocols surged 80.3% YoY to $51B, with a 21.6% increase in wallet addresses.
World Markets
Brazil cuts rates 50bps to 10.75% as inflation eases but remains above target. They aim to boost the economy cautiously while keeping inflation in check.
Commodities
Gold rises to $2222, setting a new record, after mixed central bank signals. Fed to hold rates, but hints at cuts later in 2024. BoE eyed for future rate cut clues.
Thursday
On Thursday, manufacturing activity is down, the service sectors cools a bit, home sales grow unexpectedly, and stocks soar on a continuing tech lead rally with Micron up 16% on strong earnings. Reddit debuts on NYSE, but Apple tumbles on a DOJ lawsuit. Internationally, the EU manufacturing sector continued to soften, as the Swiss Bank cuts its key rate while the Bank of England kept its rate unchanged but showed signs of softening its anti-inflationary stance. Despite that, the crypto market turned red, correcting after yesterday’s surge on the Fed news turning into dovish enthusiasm. BTC’s trading slightly above 65K, ETH — 3.4K. Among the few coins which are still in the green are XRP (+7%) and LTC (+1%).
Details
Service sector growth cools down in March, with PMI dipping to 51.7 (3-month low). New business slows, but employment rises. Businesses see higher inflation and are boosting marketing plans despite these mixed signals. Philly Fed Index dips to 3.2 but beats forecasts (expected -2.3). Shipments and new orders improve, suggesting some expansion. Prices remain low, but future activity expectations rise.
Existing home sales surged 9.5% to a 1-year high (4.38 million) in February, defying forecasts. More houses on the market are meeting buyer demand, with gains in all regions except the Northeast.
Crypto
Massive real-world asset tokenization (such as $326 trillion in real estate or the gold market, valued at $12.39 trillion) could fuel the crypto market by boosting liquidity. That trend is confirmed by mainstream opinion leaders — the Boston Consulting Group and BlackRock. India cracks down on foreign crypto exchanges like Binance and OKX, blocking their websites and prompting an exodus to local exchanges. Local exchanges see massive user inflows with the government’s unclear regulations and high taxes making things difficult for foreign players.
World Markets
The Bank of England holds rates at a record 5.25% despite inflation dipping to 3.4% (lowest in nearly 30 months). One member voted for a cut, but policymakers wait for clearer signs inflation is under control before easing. German manufacturing PMI sinks to 41.6 (worst in 5 months) despite a slower decline in output. Backlogs and employment continue to fall, but sentiment improves. French manufacturing PMI tumbles to 14-month low (45.8) as output and sales plummet. Despite some supply chain improvement, job cuts held steady.
EU car sales surge 10.1% in February (+12.1% previous), with strong growth in France and Italy. Electric cars hold 12% market share (up from 9%), boosted by Belgium, France, and Netherlands despite a German dip.
Currencies
Mexican peso weakens after central bank cut rates (25bps to 11%). Inflation dips but remains above target (4.4%). Investors weigh the Bank of Mexico’s move against the Fed’s planned rate cuts later in 2024.
Commodities
Gold continued to increase, fueled by expectations of central bank easing. The Fed signaled rate cuts, and now the Bank of England holds steady, with one vote for a cut. Switzerland became the first major economy to cut rates, further boosting investor confidence in looser monetary policy.
Friday
On Friday, stocks cool off after record highs. Dow retreats, but weekly gains expected. Consumer discretionary stocks lag, while utilities and communication services rise. On world markets, Euro, Chinese Yuan and Indian Rupee weakened on rate cut expectations, EU gas prices increased due to supply concerns, the cocoa market is in panic with prices quadrupling in the past two months.
Crypto
The crypto market entered into a correction mode forming a sideway channel with major coins sliding down for more than 4%. BTC got under 64K and ETH dropped below 3.4K. BlackRock clients have much more interest in BTC than ETH.
A Minnesota UBI bill that would give up $300 to $1.2K every month for two years to low-income residents has already advanced through a House committee. The program would be funded with $200 million over two years.
World Markets
El Salvador’s economy rebounds. Q4 growth hits 4.5%, the highest in 2 years. Trade and investment surge, but consumer spending slows. This marks a significant improvement from the previous quarter’s decline. Vietnamese stocks climb to 18-month highs, boosted by Wall Street’s record and hopes of US rate cuts this year. Local gains led by finance and construction sectors after Hanoi appointed a new acting head of state.
Currencies
Dollar strengthens for a second week, hitting 3-week highs (104.2). Bets on earlier rate cuts by other central banks lift the dollar. Swiss National Bank cut rates, Bank of England paused, and Bank of Japan shifted policy, but remains dovish. The Fed held steady on rates and its plan for 3 cuts, but awaits signs of inflation easing.
China’s offshore yuan weakens to a 4-month low (7.25 per dollar) on expectations of more easing. The central bank hints at looser policies, and a strong dollar adds pressure. Investors await data to assess China’s economic health. Euro falls to near $1.08, its lowest level in over 5 months, on hopes of ECB rate cuts. A hawkish ECB official signaled potential cuts before summer, aligning with market expectations of multiple reductions this year. The ECB remains data-driven, though, and future moves depend on inflation. Indian rupee weakens to record low (83.5) after China’s currency move sparked an Asian selloff. Despite the drop, strong economic growth (8.4% GDP) and high PMI (over 60) kept the rupee somewhat stable.
Commodities
European natural gas prices stay high near €29/MWh due to supply worries. Concerns include outages in Norway, repairs at a US terminal, and competition for gas from Asia. However, analysts expect prices to fall as winter ends, with more solar power and stable gas storage levels in Europe. Cocoa prices keep surging, hitting a record high above $8,600 per pound (was ~2K at the start of the year). Fears of a global cocoa shortage intensify as reports emerge of processing slowdowns in West Africa and lower-than-expected harvests in Ivory Coast. Analysts predict a wider global cocoa deficit due to these supply concerns.
On Week 13, local investors will expect inflation data, Fed speeches, GDP. In the EU they will watch for inflation and rates. Japan, Canada will see key data releases.
Comment: Fed’s Created Inflation Is Confirmed.
I was always arguing that the Fed’s old bureaucrats have created non-core inflation (excluding food and energy) by themselves, through their stupid-high interest rates.
Now, the fact that governments are significantly altering their inflation statistics by not including in it the effect of rising rates is confirmed by non other than the former Treasure Secretary Mr. Summers himself. Note that Japanese bankers kept their rates at a negative level (!) throughout that time, achieving better results in “suppressing inflation” by doing absolutely nothing (in fact, even printing more money). In Japan, inflation is about 2% now.
All main-stream economists’ counter-arguments suggesting that the Japanese economy is “structurally different” are inconsistent with the concept of “global financial markets” and the fact that Japan imports almost all of its energy from abroad, thus facing inflationary prices like everyone else. Bottom line, almost all non-core inflation stemmed from producers and service providers simply factoring the Fed’s rates into product prices and salaries.
Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest into your bright future without hassle. For more on SVET Value: https://evernomics.com/
]]>
Why you should listen
Storm Labs is an open-source software development studio that builds infrastructure for the next financial generation. Their mission is to build and share foundational infrastructure that enables economic empowerment for all.
Storm Labs raised $3 million in pre-seed funding from leading venture capital firms and angel investors to launch their protocol Cove, the first onchain portfolio manager that addresses the challenges of Automated Market Makers (AMMs). The round was led by Electric Capital.
The current scarcity of dedicated onchain management platforms forces retail crypto users to navigate DeFi’s complexities and potentially lose through DIY yield-farming. According to the survey conducted by Storm Labs, 25% of investors spent 3+ hours a week manually managing their portfolios.
Cove’s platform empowers users to tailor their investments to their risk appetite and goals to build their optimal DeFi portfolio without any need for manual management, while addressing the limitations of traditional AMMs and eliminating Loss-Versus-Rebalancing (LVR). They achieve this through a unique execution mechanism that guarantees fair and transparent trades, minimizing issues like price impact, slippage, MEV (Maximal Extractable Value).
Trades within Cove are facilitated through a proprietary matching engine, while external trades are routed through CoW Swap for added security while still eliminating MEV and capturing positive slippage. This means the platform can seamlessly match individuals holding complementary liquidity positions, facilitating efficient trades and maximizing returns.
Marking Stage 1 of the product roll-out will be the launch of Cove Boosties. Boosties is the first dedicated liquid locker and staking platform specifically designed to simplify and enhance the Yearn experience. It allows users to effortlessly earn boosted APY on Yearn vaults and mint coveYFI, with flexible dYFI rewards and early access to Cove’s governance token ($COVE). Boosties is built using Yearn V3 and optimized by Gauntlet and audited by Trail of Bits, Quantstamp, and yAudit. The main protocol is slated to launch during Stage 2 later this year.
Supporting links
Bitget VIP Link with BONUS 1000 USDT
If you enjoyed the show please subscribe to the Crypto Conversation and give us a 5-star rating and a positive review in whatever podcast app you are using.
Onramps from fiat to crypto have historically been one of the biggest pain points with regard to DeFi accessibility. Thanks to the tireless builders who identified this issue early on, and have been working with regulators, credit card issuers and other payment infrastructure providers, the high barriers to crypto entry are about to be a thing of the past.
In November of last year, Velocity Labs began talks with Ramp, the leading onramp infrastructure provider for web3. The objective was simple: maximize Asset Hub’s accessibility, and to get it to its full potential.
Asset Hub is a system parachain considered the “home base” of assets in the Polkadot blockspace ecosystem. It enables the creation, management, and use of assets in the Polkadot network. As a system parachain, it has a trusted relationship with the Polkadot Relay Chain, allowing for porting of DOT from the Relay Chain to Asset Hub. Asset Hub is crucial for the emission of tokens similar to ERC-20 (the Ethereum standard powering DeFi on that chain) and the imminent and future resurgence of DeFi on Polkadot. However, Asset Hub has many constraints, particularly around UX and DevEx. Recognizing the potential of Asset Hub and its importance, Velocity has been working tirelessly to address these limitations.
Ramp is a financial technology company building solutions that connect the crypto economy with today’s global financial infrastructure. Through its core on- and off-ramp products, Ramp provides businesses and individuals across 150+ countries with a streamlined and smooth experience in converting between cryptocurrencies and fiat currencies. Ramp is fully integrated with the world’s major payment methods, including debit and credit cards, bank transfers, Apple Pay, Google Pay, and more.
About Velocity Labs
Velocity Labs is a DeFi and infrastructure development company founded with the objective of transforming the Polkadot blockspace ecosystem into a thriving hub for DeFi innovation. A team formed by Polkadot veterans and DeFi experts, Velocity Labs is committed to building critical market infrastructure and tooling to unlock Polkadot’s full potential.
More information on velocitylabs.org
Velocity Labs actively searching for builders to join us in creating the most efficient and resilient ecosystem for DeFi on Polkadot. If you think this is you, please get in touch with us through this form.
Contact
ops lead
MARIA PAULA FERNANDEZ
Velocity Labs AG
[email protected]
UPDATED April 26th 2024. Who offers the best crypto interest rates? With the growth of DeFi & CeFi applications, crypto lending, margin exchanges, and stakeable cryptocurrencies over the last few years, it can be difficult to know where the best crypto yields for your idle capital are. Following on from our guide to crypto yield farming, this survey looks into the major crypto lending platforms and examines the different interest rates offered by them.
First, an understanding of the difference between ‘crypto lending’ and ‘crypto borrowing’ in the context of this article is important. If you are lending in the scenarios below you are loaning your assets to the platforms featured with the expectation that you will earn interest on your crypto assets. Your goal is the return of your original sum, with earned interest. This article does not explore crypto borrowing – where you would borrow assets (or fiat in some cases) from a platform, which you would be required to repay – with additional interest. For the best crypto borrowing rates check here.
The question of which is the best crypto lending platform is open to debate – as each has its own approach and processes – but certainly annual interest rates paid are a good place to start. All interest rates were recorded on April 26th 2024 and are subject to change. A rate of zero on a specific platform means the coin is temporarily unavailable there. It does not mean 0% interest. Rates displayed are typically maximums and may come with additional platform terms & conditions.
Best Crypto Interest Rates
Stablecoin Rates
 USDC |
 DAI |
 USDT |
 USDP |
 TUSD |
 BUSD |
||
 |
12%
|
12%
|
12%
|
0%
|
12%
|
12%
|
 |
 |
20.73%
|
3.16%
|
–
|
–
|
–
|
–
|
|
 |
14%
|
14%
|
16%
|
14%
|
14%
|
–
|
|
 |
4.88%
|
–
|
6.4%
|
–
|
–
|
–
|
|
 |
5.93%
|
9.78%
|
2.89%
|
15.93%
|
45.74%
|
–
|
|
 |
9.5%
|
–
|
–
|
–
|
–
|
–
|
|
 |
50.12%
|
61.36%
|
44.89%
|
–
|
–
|
0%
|
|
 |
7.16%
|
7.4%
|
6.31%
|
0%
|
0%
|
0%
|
|
 |
8.2%
|
–
|
8.2%
|
–
|
–
|
–
|
|
 |
0%
|
4.5%
|
4.5%
|
2%
|
0%
|
–
|
|
 |
5%
|
–
|
5%
|
–
|
–
|
–
|
|
Cryptocurrency Rates
 BTC |
 ETH |
 WBTC |
 LINK |
 UNI |
 TRX |
 YFI |
 SOL |
 DOT |
 ADA |
||
|
|
7%
|
7%
|
–
|
9%
|
9%
|
7%
|
7%
|
–
|
15%
|
7%
|
|
|
|
–
|
11.74%
|
0%
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|
|
|
7%
|
8%
|
–
|
7%
|
–
|
–
|
–
|
8%
|
15%
|
8%
|
|
|
|
3.2%
|
6%
|
–
|
0.88%
|
0.88%
|
0.88%
|
–
|
0.88%
|
0.88%
|
0.88%
|
|
|
|
–
|
0.06%
|
0.01%
|
0.01%
|
0.48%
|
0%
|
0%
|
–
|
–
|
–
|
|
|
|
1%
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|
|
|
–
|
0.01%
|
0.29%
|
0%
|
0%
|
0%
|
0%
|
–
|
0%
|
0%
|
|
|
|
–
|
1.51%
|
0.07%
|
0.01%
|
0.02%
|
0%
|
0%
|
–
|
–
|
–
|
|
|
|
6.5%
|
6.5%
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
–
|
|
|
|
4%
|
4%
|
–
|
0%
|
0%
|
0%
|
–
|
5.5%
|
9%
|
3.5%
|
|
An introduction to crypto loans
The other side of lending is of course borrowing. If you are interested in taking a loan out (for USD for example) many of the providers above also provide that service. Check here for the latest borrowing rates.
Most major Lending and borrowing protocols across both CeFi and DeFi require borrowers to lock up an asset in order to take out a loan. These types of loans are called collateralized loans.
Collateralization is a borrower’s commitment to pledge a number of assets as a means for a lender to recoup their capital in the instance that the borrower defaults on the loan. If a borrower continually missed payments on a loan obligation then the lender has the right to possess the collateral pledged in the case that the loan defaults.
Collateralized, or more specifically ‘overcollaterized loans’, are at the core of efficiently operating DeFi lending markers. DeFi lending protocols enable open, permissionless, and pseudo-anonymous financial services. There are no credit score requirements for borrowers and generally no formal KYC or AML requirements.
In order to maintain a balance between open access and systemic stability the value of the collateral that needs to be pledged for DeFi loans has to exceed the value of the loans. If for example, a DeFi user wants to directly take out a USD100 DAI loan on Makerdao, they need to put up at least USD150 worth of Ethereum.
Borrowing from DeFi protocols can often be a precarious and time-intensive process that goes beyond simply paying back interest in installments.
The loan-to-value ratio (LTV) needs to be carefully monitored to ensure that the collateralization requirement that was agreed upon before the loan was executed is maintained. Maintaining this LTV ratio is made more difficult if borrowers put up volatile assets like ETH as collateral. If the value of ETH changes suddenly in US dollar terms, loans can be liquidated very quickly and borrowers are not protected by mechanisms that exist like loan insurance.
For these reasons, due to the complex nature of unique specific DeFi protocol agreements that go beyond interest rate payments, BNC has chosen not to include details around DeFi protocol borrowing rates.
Programmable Money: Tools that find the best crypto interest rates for you automatically
These days yield optimization platforms like Yearn.finance exist. They use the Ethereum blockchain’s capabilities to facilitate programmable money to make it easier for users to find optimal interest rates automatically. Before Yearn, users seeking to maximize their yields needed to manually move their stablecoins between lending protocols. A slow, labor-intensive process that Yearn aims to avoid.
The protocol works by creating pools for each asset that is deposited. When a user deposits their stablecoins into one of these pools, they receive yTokens that are yield-bearing equivalents of the coin that was deposited. If for example, a user deposits DAI into the protocol it will issue back yDAI.
Assets are automatically shifted between lending platforms in the DeFi ecosystem like Compound and Aave, where interest rates for deposited assets change dynamically. Every time a new user deposits assets into a pool on Yearn, the protocol checks whether there are opportunities for higher yield and rebalances the entire pool if necessary. At any time a user can burn their yDAI and withdraw their initial deposits and accrued interest in the form of the original deposit asset.
The protocol has evolved to offer more complex solutions that can efficiently maximize yields on user deposits. The yCRV liquidity pool built by Yearn on the Curve finance platform contains the following yTokens: yDAI, yUSDC, yUSDT, yTUSD and pays back a yCRV token that represents the index. Users can deposit any of the four native stablecoins into the pool and earn interest back from yield-bearing yCRV tokens. Depositors also earn trading fees from Curve for providing liquidity to other users of the platform.
]]>
Today marks a monumental day as Hipposol, A solana memecoin proudly announces the launch of $hippos pre sale round for early participants. Drawing vibrant inspiration from the mighty and playful hippopotamus, the $Hippos token presale event begins today April 24th 2024, with a sale duration of 26 days.
Hipposol Ready To Pioneer A New Era in Memecoin
$Hippos isn’t merely another entry in the memecoin ledger; it heralds a new era where community, technology, and sheer fun merge to forge genuine value. “With $Hippos, we’re not just redefining memecoins; we’re revolutionizing how a memecoin community and digital currency coexist. This journey isn’t about speculative trading alone; it’s about crafting a community empowered to steer its course and reap substantial growth,” said King Hippo, the revered leader of the Hipposol herd.
The Hipposol team believes the $Hippos pre sale event means more than buying a token; it means joining a memecoin herd that leads. With Hipposol community-driven development approach, users insights and votes directly influenced by the $Hippos holders, Hipposol is set to be next meme sensation on Solana.
$Hippos Presale Facts:
- Token Presale Rate: 1 SOL = 150,000 $Hippos
- Minimum Buy: Dive in with as little as 0.5 SOL
Users can join the Solana meme adventure with Hipposol and experience a new breed of memecoin that’s ready to make waves.
For more updates and news on Hipposol memecoin;
Website | $Hippos Sale portal | Twitter | Telegram
Hipposol is the source of this content. This Press Release is for informational purposes only. The information does not constitute investment advice or an offer to invest. Investing in cryptocurrencies can be volatile and dangerous.
Contact
King Hippo
Hipposol
[email protected]
Today federal prosecutors brought charges against Keonne Rodriguez and William Lonergan Hill, founders of the Bitcoin wallet and mixer, Samurai Wallet, accusing them of conspiring to commit money laundering. This action reflects the U.S. government’s ongoing efforts to prosecute crypto protocols that could facilitate illicit activities and aid foreign entities in concealing financial transactions.
According to a press release issued on Wednesday, Rodriguez and Hill are alleged to have developed, promoted, and operated the mixer, enabling over $100 million in money laundering transactions from illicit dark web markets. The release further claims that Samurai Wallet facilitated approximately $2 billion in unlawful transactions between 2015 and the present. This figure was determined by converting the value of laundered bitcoins into U.S. dollars at the time of each transaction.
Prosecutors assert that Rodriguez, 35, and Hill, 65, received around $4.5 million in fees for their mixing services, with various features incurring different pool fees. The charges against them include conspiracy to commit money laundering and conspiracy to operate an unlicensed money-transmitting business, carrying maximum sentences of 20 years and five years, respectively.
Founders Arrested
Rodriguez was arrested on Wednesday morning and is expected to be arraigned in Pennsylvania either today or tomorrow, while Hill, the Chief Technology Officer of Samourai Wallet, was arrested in Portugal and will be extradited to the U.S.
In addition to the arrests, the Samourai Wallet website, hosted in Iceland, has been seized, and a seizure warrant has been issued for the mobile application on the Google Play Store. The homepage of the website now displays a warning from U.S. officials following the charges against the developers.
The Department of Justice (DOJ) press release highlights that Rodriguez and Hill actively encouraged users to launder criminal proceeds through the mixer, referencing tweets and private messages. The mobile application reportedly garnered over 100,000 downloads.
The pair allegedly marketed their services to investors under the premise that participants in dark or gray markets would be among their user base. Marketing materials listed “Restricted Markets” alongside online gambling and asset protection as target demographics.
U.S. Attorney Damian Williams said: “As alleged, Keonne Rodriguez and William Lonergan Hill are responsible for developing, marketing, and operating Samourai, a cryptocurrency mixing service that executed over $2 billion in unlawful transactions and served as a haven for criminals to engage in large-scale money laundering. Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100 million of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns. Together with our law enforcement partners, we will continue to relentlessly pursue and dismantle criminal organizations that use cryptocurrency to hide illicit conduct.”
FBI Assistant Director in Charge James Smith said: “Threat actors utilize technology to evade law enforcement detection and create environments conducive to criminal activity. For almost 10 years, Keonne Rodriguez and William Hill allegedly operated a mobile cryptocurrency mixing platform which provided other criminals a virtual haven for the clandestine exchange of illicit funds, the facilitation of more than $2 billion in illegal transactions, and $100 million in dark web money laundering. The FBI is committed to exposing covert financial schemes and ensuring no one can hide behind a screen to perpetuate financial wrongdoing.”
These arrests coincide with the DOJ’s upcoming trial against Roman Storm, a developer and co-founder of crypto mixing service Tornado Cash, and the recent conviction of Roman Sterlingov, operator of crypto mixer Bitcoin Fog, on money laundering charges by the DOJ’s Washington, D.C. unit.
]]>
DePINs, leveraging blockchain technology and the Internet of Things (IoT), aim to enhance data sovereignty, reduce dependency on centralized models, and improve system resilience against potential failures. The research specifically highlights and evaluates Acurast, a new decentralized serverless cloud network that capitalizes on underutilized resources of smartphones to perform complex computing tasks with enhanced security and efficiency.
Key Findings:
- Enhanced Efficiency: Acurast has shown potential to perform computationally intensive tasks more efficiently than traditional cloud services like Google Cloud Platform and Amazon AWS.
- Power Efficiency: Acurast significantly reduce power consumption, compared to existing centralized server infrastructure, making it an environmentally friendly alternative to existing solutions.
- Empirical Evidence: The study provides empirical evidence supporting the theoretical benefits of DePINs, demonstrating Acurast’s ability to handle computationally intensive applications with reliability and cost-effectiveness.
“The advent of decentralized technologies presents a unique opportunity to rethink how we manage and operate digital infrastructures,” said Jan von der Assen, PhD student and Junior Researcher of the Communication Systems Group (CSG) at the University of Zurich (UZH) on the project. “Acurast not only challenges the status quo but may also present a scalable, secure, and sustainable model for future computing needs.”
This research marks a significant step toward understanding and harnessing the power of DePINs for computing. It opens up a real alternative to existing cloud providers for applications in all industries, especially where confidentiality is paramount.
The full research paper is publicly available and has been accepted at the upcoming DePIN Workshop of the International Conference on Blockchain Technology (ICBC) 2024.
About University of Zürich’s Communication Systems Group
The Communication Systems Group (CSG) at the University of Zurich focuses on research and development in networked systems and communication mechanisms. The group is dedicated to advancing the state of the art in communication systems, network security, and infrastructure development.
About Acurast Association
The Acurast Association is dedicated to breaking up the cloud monopoly with Acurast using mobile hardware, thereby democratizing and decentralizing the cloud. Allowing everyone to become a part of the cloud through their mobile devices. Providing developers with unrestricted, permissionless access to computing resources that are secure, cost-effective, and confidential.
Contact
Co-Founder
Pascal Brun
Acurast
[email protected]
“Yoki Origins,” supported by Bandit Network and Brave Ads, introduces a gamified and rewarding experience for Astar zkEVM users, marking a significant milestone in Web3 adoption.
Bandit Network, a leading provider of White-Labelled Quest solutions with Points SDK, proudly announces its collaboration with Astar Network to power the ongoing “Yoki Origins” journey. Launched on March 8th, this innovative user onboarding journey coincides with the mainnet release of Astar zkEVM, a Layer 2 scaling solution for Ethereum. This collaboration represents a significant milestone in the evolution of Web3 infrastructure.
Astar zkEVM, leveraging Ethereum’s security and the Polygon CDK (Chain Development Kit), offers a secure and scalable platform for Web3 projects and enterprises. As the inaugural zero-knowledge EVM chain, Astar zkEVM unlocks access to Ethereum’s extensive developer resources and industry-standard infrastructure providers.
Yoki Origins Capsule Machine or Yo-Port powered by Bandit Network.
The “Yoki Origins” journey, powered by Bandit Network’s White-Labelled Quest solutions with Points SDK promoted by Brave Ads, introduces users to the world of Astar zkEVM through interactive experiences inspired by Japanese Yokais. Participants engage with Capsule Machines, or “Yo-Ports,” to collect Yokis and artistic creations, fostering engagement and loyalty within the Astar ecosystem.
“Bandit Network is thrilled to collaborate with Astar Network on the ‘Yoki Origins’ journey,” said Sandesh B Suvarna, Founder of Bandit Network. “Our White-Labelled Quest solutions with Points SDK, along with promotion through Brave, provide a seamless and engaging experience for users, allowing them to immerse themselves in the Astar ecosystem while celebrating Japanese culture and heritage.”
Maarten Henskens, Head of Astar Network, commented, “Bandit Network’s platform with Brave Ads has been instrumental in bringing the ‘Yoki Origins’ journey to life. This collaboration underscores our commitment to delivering innovative and engaging experiences to our community as we continue to expand the capabilities of Astar zkEVM.”
Brave Ads for Yoki Origins powered by Bandit Network on Brave Browser.
Luke Mulks, VP of Business Operations at Brave, highlights the integral role of Bandit Network’s solutions in partnership with Brave Ads, “We’re excited for Brave Ads to be collaborating with Bandit Network’s White-Labelled Quest solutions to bring awareness and growth for the Astar ecosystem. With collaborations like ‘Yoki Origins’, Brave Ads demonstrates the ability to use Quests as a growth accelerator.
Brave Ads campaigns will elevate Quests beyond airdrop farmers, introducing Quests to millions of Brave Rewards users. In addition to earning BAT with their attention, Brave Rewards users will now be able to earn even more by participating in Quests through Astar and other participating Bandit Network partners advertising with Brave Ads.”
Brave offers Web3 promotional opportunities through Brave Ads for advertisers that pay with BAT for their campaigns, facilitating growth and adoption within the broader Web3 ecosystem.
Yoki Origins – Japan Airlines Hakuhodo Yo-Port powered by Bandit Network.
The “Yoki Origins” journey invites users to explore Astar zkEVM’s unique characters, participate in quests, and collect digital collectibles. Through interactive Capsule Machines, participants can obtain Yokis and artistic creations contributed by various artists, enterprises, and builders. The user journey aims to foster accessibility for individuals unfamiliar with Web3, incorporating social logins and credit card payments.
Astar Network serves as a conduit for projects spanning enterprise, entertainment, and gaming to enter the Japanese market and beyond. By propelling global adoption of Web3, Astar aims to build an ecosystem fueled by both Polkadot and Polygon, positioning itself as a leading blockchain for the Japanese market.
For more information about Bandit Network and the “Yoki Origins” journey, visit https://yoki.astar.network/en.
About Bandit Network:
Bandit Network is a leading provider of White-Labelled Quest solutions with Points SDK, offering a no-code platform for engaging and interactive experiences. With a focus on fostering user engagement and loyalty, Bandit Network empowers organisations to create immersive campaigns and events across various industries.
Media Contact:
Name: Sandesh B Suvarna
Designation: Founder
Company: Bandit Network
Email: [email protected]
LinkedIn: https://www.linkedin.com/in/sandeshbsuvarna/
Twitter: https://twitter.com/sandeshsuvarna
Telegram: https://t.me/SandeshBSuvarna
Name: Luke Mulks
Designation: VP – Business Operations
Company: Brave
Email: [email protected]
Twitter: https://twitter.com/lukemulks
Twitter: https://twitter.com/brave
Advertisers: https://ads.brave.com/
]]>
Hong Kong’s market regulator has granted official approval to the first batch of cryptocurrency-related spot exchange-traded funds (ETFs), marking a significant milestone for the city and positioning it as Asia’s premier digital-asset hub, fostering further growth in the sector.
The Securities and Futures Commission (SFC) announced on Tuesday the approval of spot-based Bitcoin and ether ETFs managed by Harvest Global Investments, China Asset Management (ChinaAMC), and a consortium comprising Bosera Asset Management and HashKey Capital, as per the regulator’s website.
Trading for these funds could commence as early as April 30, with management fees lower than previously anticipated.
Senior ETF analyst James Seyffart tweeted that a potential fee competition may emerge among issuers, noting that Harvest is waiving all fees for the initial six months, followed by a 0.3% charge for both its spot BTC and ETH funds. This fee undercuts the Bosera-HashKey funds’ 0.6% and ChinaAMC’s 0.99% management fees after the introductory period.
While the Hong Kong-listed spot crypto ETFs represent a pivotal step in making crypto assets more accessible to traditional investors worldwide, analysts suggest that their impact may not replicate the success of their U.S.-based counterparts. The issuers approved in Hong Kong are significant regional players but pale in comparison to their U.S. counterparts, some of whom manage trillions of dollars in assets.
For instance, China Asset Management and Harvest Global Investments had respective assets under management (AUM) of $266 billion and $207 billion at the end of last year, as reported on their company websites.
Window closing for unlicensed VASPs
Meanwhile, the May 31st deadline for non-licensed crypto entities in Hong Kong to close is approaching fast. Hong Kong SAR’s government Financial Services Department previously issued a February 29th deadline for unlicensed Virtual Asset Service Providers (VASP) to make applications to register with the Hong Kong Securities and Futures Commission (“SFC”).
In an official blog post, Christopher Hui Hong Kong’s Secretary for Financial Services and the Treasury, explained the transitionary period for any unlicensed virtual asset service provider who has not yet applied for a license or cannot yet meet the requirements for a license. He said that if existing crypto services cannot apply and meet the requirements of the SFC they will be issued a “no-deeming notice.” Firms who receive the notice either have to cease operations by May 31st (or within 3 months of receiving a notice).
The new exchange regime for crypto in Hong Kong will represent one of the clearest, most black-and-white structures ever for centralized cryptocurrency exchanges and other service providers to operate and offer their products to retail investors. All VASPs in the SAR, now must register and report to the SFC which has laid out its requirements for firms that include investor protections, onboarding processes, governance procedures, insurance, and KYC/AML.
This announcement follows moves in 2023 by Hong Kong authorities to expand retail access to crypto products and allow intermediaries to offer “Virtual Asset-Related “ or VA-related products to retail customers.
Previously these VA-related products products, which can include spot-Crypto and Bitcoin ETFs, could only be accessed by institutional investors. “The policy is updated in light of the latest market developments and inquiries from the industry seeking to further expand retail access through intermediaries and to allow investors to directly deposit and withdraw virtual assets to/from intermediaries with appropriate safeguards,” The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA), wrote in a circular released on October 20th 2023.
There are stipulations, however, for intermediaries to consider. The circular states “An overseas VA non-derivative ETF would very likely be considered a complex product and it should only be offered to professional investors.” This means a product like Blackrock’s spot Bitcoin ETF will not be available to retail investors in HK just yet.
This expansion follows the establishment of a licensing regime for virtual asset trading platforms (“VATPs”) in Hong Kong. The regime sets up a framework for exchanges, brokers, and other crypto service providers to offer their services to investors in a secure, informed, regulated manner.
The need for crypto regulation in Hong Kong has also come under scrutiny following the JPEX scam scandal that has led to a slew of arrests. HK financial regulators have said JPEX operated without a proper VATP license.
Background to Hong Kong Crypto Regulation Updates
On Thursday, the 1st of June 2023, a much anticipated digital asset regulatory regime came into effect in the Hong Kong SAR. To appreciate how fast things have moved in the SAR, the new trading rules and licensing guidelines were only finalized the week before the rules went live, and just eight months after the proposed changes were announced in October 2022.
The new exchange regime for crypto in Hong Kong will represent one of the clearest, most black-and-white structures ever for centralized cryptocurrency exchanges to operate and offer their products to retail investors. This rapid and dramatic shift has caught the attention of market observers because of the size of the Hong Kong financial market.
The Hong Kong public equity market is the 7th largest stock exchange in the world by market capitalization and beats out the national stock markets of India and the UK. Hong Kong has been a global financial center for decades. It has utilized a low tax regime and incredible local human capital, to become a de-facto hub between China and the West. Hong Kong is the historical center of ‘East meets West’ business and financial activity.
What the new Hong Kong crypto laws mean
The legislation that came into play on June 1st is a licensing regime for virtual asset trading platforms (“VATPs”). Platforms that apply to be a part of the regime will be regulated by the Hong Kong Securities and Futures Commission (“SFC”).
The SFC has begun to offer guidance to potential VATPs. The SFC’s ‘Consultation Conclusions on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators Licensed by the Securities and Futures Commission’ was also released on June 1st. It contains some practical takeaways and guidance for hopeful VATPs to try to follow when applying for a license with the SFC. A license will allow successful applicants to offer virtual assets (that are considered securities by the SFC) to retail customers. The consultation is a guideline document for potential Virtual Asset Trading Platform Operators applying for a license with the SFC.
Key aspects of the consultation —
- Platform Operators will only be allowed to provide their services to retail investors if they comply with a range of robust investor protections that cover onboarding, governance, disclosures, token due diligence, and admissions. The SFC says these requirements will broadly be in line with the requirements applied to traditional licensed corporations.
- The SFC notes that it is important for clients of the platform to understand the features and risks of investing in virtual assets. During the onboarding process the SFC says platforms will have to assess an investor’s risk tolerance, conducting an holistic assessment of the investor’s understanding of the nature and risks of virtual assets amongst other assessments. This type of onboarding will apply to both retail and institutional investors.
- Operators will be required to set up robust governance procedures that may include setting up a token admission and review committee that consists of senior management who are principally responsible for managing the key business line, compliance, risk management, and information technology functions.
- The tokens must also be incorporated in at least two cryptocurrency indexes from prominent institutions, one with a background in traditional finance.
- Disclosing information surrounding listed Virtual Assets. The SFC notes that while it understands the potential challenges of obtaining and verifying information provided by the issuer of a digital asset, it will still expect a Platform Operator to conduct due diligence on each virtual asset prior to admission for trading. As such, Platform Operators will still be expected to obtain information for each listed digital asset, reliable and sufficient enough, to base a token admission decision on. This information will need to be disclosed to the SFC.
- Custodian insurance for platforms. Platforms are required to have in place insurance/compensation, approved by the SFC, to cover the risks tied to being custodians of digital assets. An example of how compensation can be set-up is in the form of bank guarantees, along with funds held in the form of demand deposits or fixed deposits with a maturity of six months or less. The SFC has stated that 98% of client’s assets need to be held in cold storage.
- The consultation document states clearly that platforms must not engage in proprietary trading activities of virtual assets from their own accounts or any account connected to the platform.
- There is also a stated ban on VATPs offering any kind of virtual asset derivatives style product. This may include offering, trading, or dealing in virtual asset future contracts or related derivatives.
- The trading of stablecoins is also banned for VATPs. The consultation explains that stablecoins fall under the jurisdiction of the Hong Kong Monetary Authority (“HKMA”). The HKMA is expected to launch a more robust framework around stablecoins in sometime in the next 12 months.
- The consultation has also stated that firms applying for VATP licenses with the SFC should as a matter of prudence, apply for approvals under both the existing SFC licensing regime and the AMLO licensing regime. AMLO is the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). It is designed to bring exchanges that offer crypto-assets that do not qualify as “securities” within the regulatory oversight of the SFC (VATP regime). The SFC states that both licenses should be applied in the instance that some asset listed by a VATP may change to become a non-security and would therefore be regulated under AMLO.
Why Hong Kong is Embracing Digital Assets
It has been reported that the new ‘crypto for retail’ framework by Hong Kong is part of a wider initiative to help the city reclaim its position as a leading, cutting-edge financial hub. Some of this sheen has been lost because of the city’s extended isolation during COVID-19 and a period of social/political unrest before this.
Hong Kong has had crypto regulatory regimes before this latest initiative. There was previously a voluntary license program in Hong Kong run by the SFC but there were only two applicants— OSL and the Hashkey Group. Providers were permitted to offer crypto trading services solely to professional investors with portfolios of at least HK$8 million ($1 million). Notable crypto exchanges Crypto.com and FTX were also founded in Hong Kong but both shifted their base away from the country and were not part of any local licensing regime.
Paul Chan, the Financial Secretary of Hong Kong, has championed digital assets and Web3 in the past. Speaking in January he said “Hong Kong has become a quality standing point for digital asset corporates,” and continued that the city has a robust regulatory framework that matches international standards. He added that it also prohibits free riders and described virtual assets as “unstoppable new financial innovations” and implored that there is a need for Hong Kong to embrace them.
Hong Kong Crypto Licensing Not Without Issues
Likely the biggest issue tied to the new SFC licensing regime for digital assets is its ambiguity. While it seems clear that the trading of what can be understood as larger crypto assets like Bitcoin and Ethereum will fall under the jurisdiction of the SFC, there is no mention of DeFi, NFTs, and many other key components of the wider digital asset sector. They appear to fall outside what is regulated — so is it to be assumed that these aspects of crypto are illegal in Hong Kong? Digital asset derivatives are stated to be outside the scope of the SFC, does this mean that they are also illegal?
Digital asset firms in Hong Kong need to determine if the products they offer constitute securities. If they do, then they may need to apply for a license with the SFC. This will be challenging for firms that operate in gray areas offering services related to staking, NFTs, or play-to-earn blockchain products. Companies based in Hong Kong offering these types of services are still operating in uncertain territory – and will likely have one eye looking over their shoulder expecting one of Hong Kong’s numerous financial watchdogs to come down on them.
The regime shift nonetheless sparks an opportunity to be a part of one of the most exciting jurisdictional crypto projects in recent times. The SFC license program is designed to attract fresh capital and talent to Hong Kong. It will likely do this. The opportunity to offer digital asset products to Hong Kong’s immense retail investor base is immense and it is no surprise that major international crypto firms including Huobi, OKX, and Amber Group have said they intend to pursue licenses with the SFC. International crypto exchange BTSE announced in March that it would seek to apply for a license with the SFC to operate within its planned Virtual Asset License regime.
This interest comes despite the SFC licensing regime including numerous requirements which may put off some potential applicants. It has been reported that companies are wary of the potential costs tied to gaining an SFC license. Information gathering, reporting obligations and KYC/AML infrastructure will need to be set up to obtain an SFC license.
This will take investment, time, care, and skill. Hong Kong, however, may be ahead of the curve. Frameworks like the SFC’s are being implemented, or at least discussed, in major financial hubs including the US and the EU. Thus companies that meet the requirements of the SFC license will likely be well placed to expand and receive licenses in other regions. They will also be more appealing to investors and traders because of assurances that they have to meet high standards of security and transparency.
In comments shared with Brave New Coin, Joey Garcia, Director and Head of Public Affairs, Policy, and Regulation at Xapo Bank notes further challenges with the HKSFC framework. Garcia is a pioneer in the regulation of virtual currency and distributed ledger technology (DLT). He co-chaired the Gibraltar government’s working group on blockchain for three years, which was established to develop the infrastructure to accommodate a DLT regulatory framework.
He notes that while there has been a lot of publications advertising how ‘retail investors’ will now be permitted access to a regulated HK platform. What is less reported is that the retail investor will still be subject to ‘suitability’ requirements. These requirements may include asset training, work experience related to virtual assets, or prior trading experience.
Garcia also notes aspects of the framework that may need adjusting. He tells Brave New Coin “the SFC will not permit 3rd party custodians anywhere in the world, as they will require a direct regulatory handle over the custodians. I see this as quite a negative as there have been years of developments from the most secure custodian providers to arrive at the very tried and tested position of security offered by those platforms.” Specialist custodians will have to register in Hong Kong in order to provide their services which will likely be unappealing. Therefore, regulated platforms will have to develop their own systems and infrastructure.
The China question
On the 1st of July 1997, Hong Kong became a Special Administrative Region of the People’s Republic of China. The city is therefore sometimes referred to as HK SAR. Chinese national law does not generally apply in the region, and Hong Kong is treated as a separate jurisdiction. It is allowed to have its own laws and legal system under the Basic Law, which came into force at the time of the Handover in 1997. The Basic Law was designed as the SAR’s Constitution, both to maintain a high degree of continuity from the common law regime inherited from the UK, and to enable Hong Kong to operate under the “One Country, Two Systems” model with a considerable level of autonomy. As such Hong Kong can continue to be open and encouraging toward digital assets, despite the outright ban on anything related to the industry in mainland China.
There are, however, systems in place like the Office for Safeguarding National Security of the CPG in the HK SAR, that are designed to ensure that Hong Kong remains subordinate to China. While on paper Hong Kong has jurisdictional independence from China, there have been times in the past when Chinese courts and national laws have trumped those local to Hong Kong.
This potential roadblock to the emergence of the new ‘crypto for retail’ regime has been raised in Hong Kong. Regulators in the city have pushed against this assumption stating that the ‘One Country, Two Systems’ model is still valid and Hong Kong is allowed to have its own financial regulations. This confidence from Hong Kong regulators has been seen as a sign that, behind closed doors, China is comfortable with Hong Kong’s open-for-business attitude with regard to its own digital assets policy. There have been rumors circulating that Chinese officials have even been seen at local Hong Kong crypto meetups and have been positive about the space.
The word ‘testing ground’ for Hong Kong has been thrown around. Will China embrace crypto if Hong Kong’s plan for a regulated digital asset registry shows signs of success? Time will tell.
In the early years of Bitcoin, Chinese investors and traders were early adopters of Bitcoin and Chinese mining pools quickly became some of the largest in the world. The availability of cheap electricity and hardware made China an attractive location for Bitcoin mining operations, and the country became a hub for Bitcoin mining activity. This naturally led to the development of several major exchanges in the country including Okex (OKX) and Huobi. Chinese trading hours and trading activity believed to have originated from China, drove the price activity of BTC.
BTC became popular for wealthy Chinese to escape the country’s strict capital controls. This, amongst many other factors, led to the outright banning of anything crypto-related in China.
Hong Kong continues to plow forward with its compliant crypto mission. In a press release shared with Brave New Coin, the HashKey group announced that it had just partnered with Quam Securities and Longbridge Whale to complete the first virtual asset online trade for securities firms in Hong Kong. Livio Weng, COO of HashKey Group, said: “HashKey Group has always prioritized the protection of customers’ funds and assets and adhered to a regulatory-first policy.” The move signals that some digital asset entities in Hong Kong are willing to play ball with the city’s regulators.
Conclusion
The recent introduction of new digital asset regulatory measures by the Hong Kong Securities and Futures Commission (SFC) marks an important step forward in the city’s efforts to provide a structured, secure, and sustainable environment for digital asset trading targeted at retail customers. These measures, which offer clear licensing guidelines and robust investor protections, align Hong Kong’s approach to digital assets with its well-regulated traditional financial markets.
Will investors be more confident in gaining access to a HK-regulated crypto market, or investing in that market? Xapo Bank’s Garcia thinks they will, in the context of knowing that there are not only “high standards being applied to it, but also serious standards for that platform including market misconduct and insider trading which are well reported in the crypto exchange environment.”
There are also a number of unknowns tied to the framework. The potential influence of mainland China’s crypto policies adds another layer of complexity to the issue. What is the legal status of digital asset derivatives, stablecoins, and Defi? Additionally, the high information requirements for retail users will create barriers to entry.
As this landscape unfolds, Hong Kong’s regulatory actions will undoubtedly shape not only its own digital asset markets but potentially, those of other major financial hubs around the globe. The city is taking an exciting step that continues its proud trend of being a financial markets innovator.
]]>
This pioneering platform empowers the community to play a pivotal role in meme coin creation, launch, and protection from scams and rug pulls.
With the meme coin market experiencing unprecedented growth, rising scams, and rug pulls, FOMO BULL CLUB recognized the urgent need for a reliable launchpad that prioritizes community safety while fostering meme coin innovation. The launchpad is meticulously designed to encourage creativity, enable democratic decision-making, and safeguard against fraudulent activities.
In its first phase, the launchpad introduces eight exciting meme coins, each with unique characteristics and potential to disrupt the meme coin landscape. However, the real power lies with its launchpad members, who can vote on which meme coins will be launched, ensuring that community preferences dictate the selection process.
FOMO BULL CLUB’s commitment to community protection is not just a statement; it’s evident in every aspect of the launchpad. Smart contracts undergo auditing, and ownership is renounced to eliminate the risk of rug pulls. Additionally, the decentralized nature of the launchpad minimizes the influence of gatekeepers, ensuring fair and transparent meme coin launches.
“We are excited to introduce the FOMO BULL CLUB meme coin launchpad and empower our community to shape the future of meme coins,” said Jordan Charters, Head of Business Development of FOMO BULL CLUB. “With our decentralized approach and focus on community protection, we aim to revolutionize the meme coin space and foster innovation and creativity.”
Visit https://fomobull.club to learn more.
Contact
FOMO BULL CLUB
[email protected]