Daily News | Crypto Market Flattened as US Equity Plummeted, Silvergate Down 43%, Japan Calls Out China

2023-01-06, 02:22

TL; DR

🥂 Good morning, today is Friday, Jan. 06, 2023.

Macro: Asian equities are expected to perform mixed on Friday as US equity fell on Thursday following data showing labor market strengthening, which could lead the Fed to keep interest rates higher for longer. Meanwhile, Japan’s trade minister says China represents a “clear and present danger” for economies around the world and calls for G-7 economies to prevent China’s “economic coercion”.

Crypto: BTC and Ether remained flat while Cardano, Solana, and The Open Network (TONCOIN) saw the biggest increases among the top 20 coins. In related news, the Open Network launched a decentralized file-sharing and data storage solution called TON Storage. Meanwhile, crypto-related tech stocks plummeted with Silvergate down by 43% after announcing job cuts.

Topic of the Day: TON Foundation Launches TON Storage to Compete with Filecoin and Storj

Notable Headlines: Hong Kong lawmakers are seeking to introduce CBDC e-HKD featuring DeFi compatibility; Three Arrows Capital founders were served subpoenas via Twitter; New York is suing former Celsius CEO Alex Mashinsky…

Macro at a Glance: US Equity Fell as Labor Market Strengthens and Japan Call for G-7 Economies to Address China’s “Economic Coercion”

Asian equities are expected to open mixed on Friday as investors react to positive signs in the US labor market that could lead the Federal Reserve to keep interest rates higher for longer. Equity futures for Japan fell slightly, while those for Hong Kong and mainland China rose, and Australian shares were slightly up.

The policy-sensitive two-year US Treasury yield increased significantly, as did market pricing for US interest rates to peak in June, which rose to above 5%. This follows comments from Fed presidents Raphael Bostic, Neel Kashkari, and James Bullard, who have suggested that rates may rise to as high as 5.4% or be approaching a restrictive zone, respectively.

European equity futures also fell ahead of the release of eurozone consumer price index data, which is expected to show a decrease in inflation to 9.5% in December from the previous year. Oil prices have risen after a series of declines, while gold has remained steady.

In other news, Japan has called for the G-7 economies to take a coordinated approach to prevent the “economic coercion” that China has applied to some of its trading partners. Japan’s trade minister stated that actions taken by China in recent years, such as halting imports of Taiwanese pineapples and Australian wine and lobsters, represent a “clear and present danger” for economies around the world.

Beijing has accused G-7 members of protectionist moves designed to prevent China’s economic rise.

💡 Today’s Markets at Jan. 06 00:00 UTC

BTC -0.22% at $16,823; Ether -0.50% at $1,249.

Asia: Australia +0.35%; Japan -0.13%; Hong Kong +1.25%; China +1.01%; India -0.28%.

Europe: London +0.84%; Paris +0.22%; Frankfurt -0.38%.

US Spot Indices: Dow -1.02%; S&P -1.17%; Nasdaq -1.47%.

US Index Futures: Dow -0.13%; S&P -0.20%; Nasdaq -0.21%.

US Two-year Treasury up 11bps at 4.467%.

US Ten-year Treasury up 4bps at 3.735%.

UK Ten-year Gilt Bond up 4bp at 3.546%.

US Dollar Index +0.83% at 104.80.

FX in 24hrs: GBP: -1.15%; EUR: -0.74%; JPY: -0.65%; CNY: Unchanged.

Gold -1.26% at 1,830; Light Crude +0.63% at 73.94.

🧠 Catalysts this week

Thursday: Japan Consumer Confidence, Germany Balance of Trade, Italy Inflation Rate, Canada Balance of Trade, US Balance of Trade

Friday: Eurozone Inflation Rate, US Non Farm Payrolls, US ISM Non-Manufacturing PMI

Crypto Daily Digest: Volatile Crypto Market Saw a Mixed Thursday, Silvergate Suffers Heavy Losses

Among the top 20 coins, Bitcoin (BTC) saw a slight increase of 0.01% to reach $16,848, while Ether (ETH) decreased by 0.05% to $1,254.

The top three winners were Cardano (ADA), which saw a strong increase of 2.93% to 0.274 following yesterday’s 6% ascent, Solana (SOL), which increased by 1.98%, and The Open Network (TONCOIN), which increased by 0.32%.

In related news, the TON Foundation, the group behind The Open Network blockchain, has launched a decentralized file-sharing and data storage solution called TON Storage, taking on similar projects like Filecoin and Storj. Meanwhile, Solana NFT marketplace Magic Eden has offered refunds to users affected by the posting of unverified NFT collections on its marketplace.

On the other hand, the top three losers were Ripple (XRP), which decreased by 1.95%, Uniswap (UNI), which decreased by 2.73% to $5.38, and Avalanche (AVAX), which decreased by 2.03% to $11.77.

The S&P 500 and Nasdaq 100 both saw declines of over 1%. Coinbase (NASDAQ:COIN) fell 11%. MicroStrategy (MSTR) shares fell 5.2%, while Galaxy Digital (OTC:BRPHF) was down 5.1%, and Jack Dorsey’s Block (NASDAQ:SQ) was down 2.4%.

Silvergate (NYSE:SI) saw a significant drop of 43% after announcing job cuts and an $8.1 billion drop in deposits in Q4 due to a “crisis of confidence across the eco.”

Investment Bank Needham & Co.’s John Todaro noted that trading volume declines at Coinbase have likely already been accounted for by the market and that the bigger impact is the issues at Silvergate, which has been a key infrastructure provider for exchanges and has seen $8 billion in withdrawals and a 40% reduction in its workforce. Todaro also noted that investors have been concerned about contagion risks in the industry, and any issues with one company can weigh on the whole industry, particularly with liquid public companies.

🌐 Top 20 Coins Performance

BTC +0.01% at 16,848; ETH -0.05% at 1,254.

BNB +0.10% at 257; XRP -1.95% at 0.340; DOGE -1.76% at 0.0720.

ADA +2.93% at 0.274; MATIC -1.45% at 0.791; DOT +0.53% at 4.65.

TRX -1.46% at 0.0539; SHIB +0.67% at 0.00000841 LTC -1.01% at 74.56.

SOL +1.98% at 13.45; UNI -2.73% at 5.38; AVAX -2.03% at 11.77.

TONCOIN +0.32% at 2.20; GT -1.92% at 3.20.

Topic of the Day: TON Foundation Launches TON Storage to Compete with Filecoin and Storj

The TON Foundation has launched TON Storage, a decentralized file-sharing and data storage solution that uses the TON blockchain network to transfer data files of any size, which are backed-up and encrypted without the need for centralized web servers.

TON Storage aims to offer financial incentives to node operators on the network through the use of smart contracts, which will ensure users pay a fixed amount in toncoin to host files for a certain amount of time.

TON Storage will also allow TON-secured sites to be hosted on the network, which TON Foundation founding member Anatoly Makosov said marks “the next step in realizing our vision of a decentralized, open internet.”

TON Storage competes with similar projects such as Filecoin and Storj.

The Open Network (TONCOIN) $2.1894 (+0.50%)

TONCOIN Overview:

Closest daily support zone: 2.165 - 2.133
Closest daily resistance zone: 2.210 - 2.237
Key Level: 2.017 (Monthly Close of Feb. 2022)

Toncoin has remained relatively unchanged since the beginning of 2023 and is trading at a 25% discount from its December high: Chart Link

TONCOIN Daily Resistance zones

2.210 - 2.237
2.277 - 2.293
2.390 - 2.413

TONCOIN Daily Support zones

2.165 - 2.133
2.107 - 2.081
2.066 - 2.040

If you’d like us to cover any specific token or macro data, feel free to reach out to us by dropping a message in our Reddit community.

Notable headlines

🔹 The Hong Kong authorities are considering issuing a CBDC in the form of a stablecoin, called the e-HKD, which would be backed by the government. The e-HKD stablecoin could be connected to decentralized finance (DeFi) for better access in Web3 ecos.

🔹 Animoca Brands chair Yat Siu said it is now looking to raise around $1 billion for Animoca Capital this quarter, according to a Bloomberg report. In November he originally wanted to amass $2 billion for the fund. He spoke of a “challenging market” in a Twitter Spaces interview on Jan. 5.

🔹 Holders of Illuvium’s land NFTs will be able to access Illuvium: Zero starting today. It is the third title the company has released. But it has plans for six more over the next two decades.

🔹 Trader Joe is expanding its DeFi trading platform and NFT marketplace to BNB Chain. The integration with other chains, including its integration with Arbitrum last month, follows the trend of decentralized finance (DeFi) protocols deploying on multiple chains.

🔹 NFT protocol Collection launched an NFT DEX protocol for instant buying and selling of NFTs. It allows people to create pools based on the type of NFT they wish to trade.

🔹 Crypto exchange Gemini is over three months late in filing its UK subsidiaries’ 2021 accounts. The exchange, which is currently facing scrutiny over its Earn program, also filed its 2020 accounts late.

🔹 Silvergate customers withdrew $8.1 billion in digital assets in the fourth quarter. Shares in the bank were trading around $12 shortly after the open, down around 43%. The bank announced it was laying off 40% of staff due to “economic realities” facing the industry.

🔹 Marathon Digital said that it ended the year with a total of $103.7 million unrestricted in cash, after paying down all of its revolver borrowings last month. Marathon also brought the company’s unrestricted Bitcoin holdings from 4,200 to 7,815 BTC.

🔹 New York’s attorney general is suing Alex Mashinsky, former CEO of the now-bankrupt crypto lender Celsius, seeking damages and a ban on the utive from leading another company in New York. Celsius offered high interest rates on its users’ crypto deposits while advertising them as analogous to bank accounts. But those accounts were not insured, and the firm collapsed amid the stablecoin crash last year.

🔹 Three Arrows Capital founders Kyle Davies and Zhu Su were served subpoenas using their “frequently-used Twitter accounts.” The unusual tactic comes after liquidators struggled to reach the leaders of the defunct crypto hedge fund.

🔹 Aurelien Michel, the founder of the “Mutant Ape Planet” NFT project, allegedly defrauded customers of $2.9 million. Michel purportedly promised NFT holders would receive rewards and that the token would increase in value, but ended up pocketing the funds for personal use.

Author: Peter L., Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

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