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Weekly Commentary January 12th

Summarising weekly developments: Macro, TradFi, Crypto and Regulation...

Published in: One Trading · 5 min read
Summarising weekly developments: 1T, Macro, TradFi, Crypto and much more...

Happy Friday One Traders!

We hope you’ve had a great week! If you're not already, connect with us on our community channels Discord and Telegram for more regular updates.

In case you missed the announcement last week, we are excited to announce the launch of our next-generation trading platform, F.A.S.T., soon. This will be the fastest and most scalable trading venue in the world. If you want to learn about super-fast High-Frequency Trading Technology, read our blog here - the data was provided independently by Amazon Web Services (AWS)

Let’s look at what’s been happening in the world over the past week.

General Macro News

Beat from the street…(Tech/Business/Finance/Economy)

  • Elon Musk’s SpaceX launched its first six satellites capable of offering mobile phone service. SpaceX is working with T-Mobile US ($TMUS) on the “Direct to Cell” partnership in the US (StockMKTNewz).
  • Google’s Bard Advanced is coming, and it may represent the company's first attempt to charge for an AI chatbot (Engadget).
  • Microsoft Adds an AI Key in the First Change to a PC Keyboard in Decades in order to activate its AI Copilot service. The first devices that will have the new AI key will be available this month (Bloomberg).
  • Apple's mixed-reality headset, the Vision Pro, is set to debut in the US on February 2, with pre-orders starting on January 19. Priced at $3,499, the headset introduces spatial computing, allowing seamless interaction through eye, hand, and voice commands. Tim Cook, Apple's CEO, has revealed that pre-orders for the device will commence on January 19. (The Economic Times).
  • Emirates Airlines President Tim Clark says Boeing's latest 737 Max accident highlights "long-running quality control programs." The US FAA has temporarily grounded the 737 Max for safety checks as a result. Boeing stock ($BA) is down 8%, erasing over $12 billion in market cap (The Kobeissi Letter).
  • Nvidia found itself at the center of the AI boom last year as its expensive server graphics processors, including the H100, became essential for training and deploying generative AI, such as OpenAI’s ChatGPT. Now, Nvidia is playing up its strength in consumer GPUs for so-called “local” AI that can run on a PC or laptop from home or an office (CNBC).
  • Volkswagen just announced that it's bringing ChatGPT into its cars and SUVs (Tech Crunch).

We covered this at the end of 2023, but there is a fresh (official) update that X will launch peer-to-peer payments in 2024. It will also have a focus on: 

  • Improve Search/Ads via Artificial Intelligence.
  • Launch “See Dissimilar Posts” 
  • Continue to invest in creators and content partnerships that attract new users and fuel advertising (X).

TradFi pulse:

Total U.S. Consumer Credit has surpassed $5 Trillion for the first time in history (FinWatch).

Initial US employment reports were overstated by 439,000 jobs in 2023. The government quietly erased 439,000 jobs through November 2023, a closer look at the numbers from the Bureau of Labor Statistics shows. That means its initial job results were inflated by 439,000 positions, and the job market is not as healthy as the government suggests (NY Post).

Since the government wiped out 439,000 jobs after the fact, the total percentage of jobs created by the government last year is even higher. Increased government hiring has been driving the jobs numbers higher. This matters because U.S. jobs reports move the markets and U.S. Treasury yields. Plus, they are a significant factor in the Federal Reserve’s decisions about the path of interest rate hikes and cuts. All that affects U.S. consumers’ pocketbooks. “Time to stop trading off the payroll data,” tweeted David Rosenberg, founder of Rosenberg Research Associates (NY Post).

A record high of 8.69 million people now hold multiple jobs to make ends meet. The economy also lost 1.5 million full-time workers since June of last year, adding 796,000 part-time workers. This means more workers are holding down multiple jobs to pay for a higher cost of living due to a cumulative 17.4% inflation rate (NY Post).

In the UK, National Insurance contributions for employees have been cut from 12% to 10%, which is a £450 a year saving for the average worker making £35,400 a year (HM Treasury). After these NICs changes, the UK's tax rate for those on average salaries is lower than all G7 nations based on the latest @OECD data below:

(HM Treasury)

(NOTE: These figures apply only to an unmarried single earner with no children. It is therefore not the average personal tax rate, as a majority of people in these countries are married. For married households with children, effective tax rates are lower in the US, Japan, and France). 

Unrealized losses now account for ~33% of all bank equity capital in the US. Currently, banks are sitting on nearly $700 billion of unrealized losses (Fin Watch):


Office building prices in the US are down ~40% from their peak just over 2 years ago. Currently, 1 in 5 office buildings in the US are vacant (Fin Watch):

  • Chinese shadow banking giant Zhongzhi Enterprise Group, which oversaw over $140 billion at its peak, has filed for bankruptcy. Chinese officials launched an investigation into "suspected illegal crimes" against the firm in November. It followed reports that ZEG had declared it was insolvent. The struggling group reportedly told investors in a letter in November that its liabilities - up to $64bn (£50.6bn) - had outstripped its assets, now estimated at about $38bn (BBC).
  • In addition to the real estate crisis in China and the bankruptcy of Evergrande in August of 2023 (with debts estimated to total more than $300bn (£235bn)), it was the world's most heavily indebted property developer. Another major Chinese property giant, Country Garden, warned that it could see a loss of up to $7.6bn for the first six months of the year (BBC).
  • Chinese Stocks have fallen to their lowest prices in 5 years and are still searching for a green day in 2024 (Crypto Trading Reports).
  • U.S. Stock Short Sellers lost a combined $195 billion in 2023 (Fin Watch):
  • Saudi Arabia has cut oil prices to Asia as market weakness persists; Aramco cut prices to all regions and cut Arab Light to Asia by $2/bbl for February (Reuters).

Crypto News

​​Digital asset investment products saw inflows totalling $151m in the first week of 2024, bringing the total inflows since the Grayscale vs SEC lawsuit to $2.3bn (Coinshares):

  • Despite the spot-based ETF not being launched by this stage in the US, 55% of the inflows were from US exchanges, with Germany and Switzerland seeing 21% and 17% respectively (Coinshares).
  • Bitcoin saw the largest share of inflows at US$113m with total inflows over the last 9 weeks representing 3.2% of AuM. Conversely, short-bitcoin saw outflows for the first week of the year totalling US$1m (Coinshares).
  • Ethereum saw inflows totalling US$29m, with inflows over the last 9 weeks totalling US$215m, a marked turn-around in sentiment. Solana on the other hand, has not had such a good start to the year, with outflows totalling US$5.3m. Other altcoins that saw notable inflows were Cardano, Avalanche and Litecoin, seeing US$3.7m, US$2m and US$1.4m respectively (Coinshares).
  • Blockchain equites have also had a good start to the year, seeing US$24m inflows over the last week (Coinshares).
  • AQUA by #JAN3 - Have launched “A Revolutionary Bitcoin and Stablecoin Wallet”. JAN3com CEO Samson Mow states, "Our long-term vision is a wallet that helps users ‘leapfrog’ banking, much like users in Africa skipped landlines and went straight to mobile." (Bitcoin News).
  • The United States has taken a significant step in tackling cryptocurrency fraud with the recent arrest of Rodney Burton, also known as 'Bitcoin Rodney.' Accused of orchestrating a multi-million dollar scam through the HyperVerse crypto investment scheme, Burton's arrest highlights the ongoing battle against fraudulent activities in the burgeoning world of digital currencies (Promptbox).

Bitcoin Updates

There has been a huge amount of anticipation about the Bitcoin ETFs this week. This helps to explain the price increase. You can see a breakdown of the ETFs, their fees and seed capital below (via Crypto.News):

76% of Bitcoin supply is held by Long-Term HODLers (holders) - (BTC Archive):

Historically, Bitcoin tends to perform its Pre-Halving rally ~60 days before the Halving (light blue). Which means... If BTC is going to perform a deeper correction during its Pre-Halving period (orange), it should occur over the next 40 days or so according to Rekt Capital:

In other Bitcoin news, Bitcoin developers continue to push the boundaries of what Ordinals are capable of with a new project called Pizza Ninja, which on Monday announced that a Super Nintendo Entertainment System (SNES) emulator had been added to the Bitcoin blockchain (Decrypt).

Some recent price predictions: 

  • Standard Chartered Bank says Bitcoin could reach $200,000 by the end of 2025 as $50-100 billion of capital inflows into Spot ETFs if they’re approved (X).
  • PlanB’s Stock-to-Flow model anticipates $532K/BTC in 2024: $50-60K around the halving in April with ~10X increase following sometime thereafter (X).
  • Mercari, Japan e-commerce giant, plans to accept Bitcoin as payment. Mercari will process BTC payments through its crypto subsidiary Melcoin, which will convert all BTC payments into Japanese yen (The Block).
  • The number of up-to-date merchants accepting BTC cataloged by BTC Map increased 174% in 2023 (ChartsSignalsTrading).
  • Fox Corp., one of the largest media companies in the U.S., has publicly debuted a new blockchain platform called Verify to help media companies track how their content is being used online (Axios). It was developed in-house by the Fox Corp's technology team in collaboration with Polygon Labs and will also help to weed out deep fakes (Cointelegraph).
  • The SEC’s Twitter account was compromised and someone made a post saying all of the ETF’s had been approved on Tuesday. As a result, within an hour, trades worth $84 million were liquidated, with $41 million in shorts and $43 million in longs vanishing (CryptoTradingReports) by Wednesday morning the losses in Bitcoin trading are said to be $750 million (CryptoTradingReports).

Prices (at time of writing)

  • BTC: €42,074.10 ($46,113.00) ↑ +5% change from last week 
  • ETH: €2,396.55 ($2,626.61) ↑ +16.5% change from last week 

Dominance: 

  • BTC: 51.1% ↑ (+2.2%) from 48.9%   last week  
  • ETH: 17.8% ↑(+2.3%) from 15.5% last week 
  • Stables: 6.8% ↑ (+0.03%) from 6.75% last week

Market Cap:

  • Total: $1.85T ↑ (+6%) from 1.74T last week.

Fear and Greed Index:

(Alternative)

We have seen a continuation of the positive sentiment this week with a 8.57% move to 76 from 70 last week. 

Trading Highlights at time of writing (CoinGecko)

Top 3 Gainers and Losers in the last seven days (out of the top 100 by market cap only) - as always, this is not financial advice, and past performance is not a reliable indicator of future results.

(CoinGecko)

Meme of the week

There are a lot of SEC-related memes doing the rounds at the moment, but here are some of our favorites: 

For context, the SEC Twitter account was compromised and put out a fake early approval notice:

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