Crypto Gains Ground: Will the Positive Trend Continue?

January was a month of remarkable recovery in the financial markets with the S&P 500 gaining 6%, the Dow Jones climbing 2.6%, and BTC rebounding an incredible 40% YTD. Whether this uptrend will continue into the new month is still uncertain, but most assets are currently testing monthly resistance levels with BTC having just climbed above the $23,500 wall at the time of writing this.  

And as most analysts predicted, the Fed hiked interest rates last week by 25bps. Jerome Powel noted during the announcement that more confidence is still needed to bring back inflation to the magical 2%, but generally spoke about rate hikes in a softer tone than previously; something that was likely a big contributor to the markets rising after the call.

On a general note, everything continues to be a macro play but the outlook is gradually improving.  

Crypto Lense 

After a tumultuous Q4 in 2022, crypto prices have climbed back above their pre-FTX-collapse levels, which in itself is astonishing given exactly how much negativity has been present in narratives since November. A few analysts are even speculating that FTX was potentially putting pressure on the markets given investor holdings were potentially being sold on the market to prop up FTT, generating selling pressure on a wide number of other assets.

On-chain Activity Looks Promising

What's more? on-chain volume for BTC and ETH increased by a notable 8.1% and 24.1%, respectively, over the last month. BTC miner revenue saw a significant 26.1% surge, reaching $601.2M, while ETH stakers also enjoyed a 26.7% revenue increase, up to $101.8M.

But despite the improvement in these metrics, BTC is yet to get a clean breakthrough past the $25,000 resistance levels. And while all of the above spells positivity for markets, there’s little evidence of actual inflows into the markets, as the positivity is most likely due to internal rotations among participants.

Worth Noticing

One Step Closer to Regulation of the Crypto Ecosystem
Regulatory movements for crypto are difficult to follow and quite frankly also quite lengthy to cover in our weekly letters. We have composed an article that’s currently trending on Hackernoon regarding regulatory developments concerning crypto.

Notable Shakers 

Alameda sues Voyager Digital for $446 million 

Alameda Research, the sister company of the collapsed crypto exchange FTX, has filed a lawsuit against crypto lender Voyager Digital to reclaim $446 million in loan repayments. Alameda is looking to retrieve up to $445.8 million that FTX made before filing for chapter bankruptcy 11 in November 2022. The lawsuit follows Binance.US's proposed deal to purchase Voyager's assets worth roughly $1 billion, which was granted initial court approval last month.

UK Treasury publishes crypto framework paper

The UK treasury recently released a much-awaited consultation paper for the United Kingdom's upcoming crypto regulation. The 80-page document covers a broad range of topics, from the issues faced by algorithmic stablecoins to Non-Fungible tokens (NFTs) and initial coin offerings (ICOs). These proposals are meant to put the UK's financial services sector at the cutting edge of crypto and avoid extreme control measures that have been gaining traction worldwide amid the ongoing crypto winter.

SBF Shenanigans Continues? 

Judge Lewis Kaplan of the Southern District of New York ruled on Feb. 1 that Sam Bankman-Fried must be prevented from communicating with any current or former employees of FTX or Alameda Research, except in the presence of his lawyer, in order to remain free on bail prior to his trial. Additionally, a hearing is set for Feb. 7 to consider if Bankman-Fried should be restricted from accessing FTX and Alameda funds as part of his bail conditions. The FTX saga continues.. 

Apple, Amazon and Google report losses in Q4 earnings 

Tech giants Apple, Amazon, and Google-parent Alphabet all reported lower-than-expected earnings for the holiday quarter, leading to their shares falling by more than 3% in after-hours trading on 2nd February. Apple reported a rare revenue decline, caused by a Chinese factory shutdown, while Google saw a sharp drop in profits due to increased competition and advertisers cutting spending. Amazon also forecasted slower-than-expected sales growth for the current quarter.

Also published here.