Sebastian Sinclair

As hedge funds increase bearish bets on US equities, with S&amp;P 500 futures short positions at a roughly 12-year high, experts are pondering the potential impacts on the crypto market.



The S&amp;P 500 COT Index, which represents the difference in net positions between large non-commercial speculators and large commercial hedgers, is now at its lowest point since Sept. 19, 2011.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="2048" height="1018" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=1024&amp;h=1024" alt="" class="wp-image-54542" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/sp500-cot-index.jpg?w=80 80w" sizes="(max-width: 2048px) 100vw, 2048px" /></figure>



A decrease in the index suggests large non-commercial speculators, including hedge funds, have become more bearish about the US stock market compared to large commercial hedgers. This shift in sentiment could indicate a negative outlook or increased uncertainty in the market.



It also opens up an opportunity, according to Ruslan Lienkha, chief of markets at YouHodler: A build-up of short bets in traditional equities could bode well for risk assets, including crypto.



“Due to the fact that there is now an increased correlation between the dynamics of American indices, gold and bitcoin, closing short positions on the S&amp;P500 may also trigger a short squeeze reaction, which will also significantly support the prices of bitcoin,” Lienkha told Blockworks.



A short squeeze occurs when a rapid increase in an asset&#8217;s price forces short sellers to close their positions, causing the price to rise even further due to increased buyer demand.



Bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>) remains little changed over a 24-hour period near $29,100 though its performance for the year is up more than 75% alongside Ether’s (<a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a>) 58%. The S&amp;P 500, by contrast, is up roughly 6% over the same period.



Price action can can be driven by short squeezes or investors getting more constructive and &#8220;taking a swing,&#8221; Owen Lau, executive director at Oppenheimer, told Blockworks.



&#8220;Additionally, the banking crisis makes people think about alternatives and where they can put money into,&#8221; he said.



Markus Thielen, head of research at Matrixport, agrees stating a short squeeze in stocks could push bitcoin higher, especially as <a href="https://blockworks.co/news/macro-in-bitcoin-favor">corporate buybacks are slated to resume</a> next week in the wake of the US corporate earnings season.



Though not all market participants are on the same page.



Brian Fu, co-founder of zkLend, an L2 money-market protocol built on StarkNet, notes that the overall likelihood of a short squeeze is low. The co-founder points to economic fundamentals that have yet to improve, as well as persistently high <a href="https://blockworks.co/tag/inflation" target="_blank" rel="noreferrer noopener">inflation</a>.



“Most other digital assets are being seen closer to traditional equities, with increasing correlation to general market sentiments. Therefore, it is more likely to be [a] downside scenario for these other digital assets,” Fu said.



Even so, there remains a silver lining, Fu suggests. Bitcoin and other key tokens with large market caps could benefit from the diversion of funds from traditional equities markets. Though sentiment remains cautious overall, Fu said.



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Hedge Funds Betting Against S&P 500: Good News for Bitcoin and Crypto?

Many crypto participants have returned to a cautious approach following a sharp decline in bitcoin&#8217;s price late last week.



The velocity of Friday&#8217;s move was “definitely unexpected,” Sam Holman, derivatives analyst at Australian trading firm Zerocap told Blockworks.



The asset fell more than 4.7% on Friday to $22,350, its sharpest single-day decline since Feb. 9. Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) last traded at around $22,400, Blockworks data shows. The total market value of all coins has slumped to just above $1 trillion, as most remain correlated to BTC.



“The market seems hesitant here on direction; Implied Volatility has fallen a lot in recent weeks due to the lack of momentum in price,” Holman said.&nbsp;



CPI data is expected to be released on March 14. Although correlations between crypto and the Nasdaq have <a href="https://blockworks.co/news/stocks-and-crypto-correlation-shows-signs-of-weakening">decreased in 2023</a>, there is frequently an uptick in volatility for crypto when US equities open on Monday, Holman added.



Southeast Asia-based financial services firm Matrixport said in a recent research note its own cautious approach was based on price action retreating to mid-February lows.



“Industry-wide leverage is being cut as the US dollar access and settlement services are being put on hold for many industry players,” Markus Thielen, Matrixport’s head of research, told Blockworks on Sunday.



<h2 class="wp-block-heading">Lagging or leading bitcoin price?</h2>



Select on-chain metrics now also highlight continual pain points for long-term holders seeking to take advantage of this year’s relief rally.



The funding rate for bitcoin perpetual swaps — derivatives similar to futures contracts without an expiration date&nbsp;— has dipped negative for the first time since Feb. 13, <a href="https://cryptoquant.com/asset/btc/chart/derivatives/funding-rates?exchange=all_exchange&amp;window=DAY&amp;sma=0&amp;ema=0&amp;priceScale=log&amp;metricScale=linear&amp;chartStyle=column">CryptoQuant data</a> shows.



A negative funding rate can indicate that market sentiment is bearish and traders are willing to pay a premium to hold short positions to profit from the downward price movement.



Funding rates are more of an indicator of positioning, Dmitry Lapidus partner on the venture unit from crypto-native investment fund Dragonfly told Blockworks.



“If everything is negative that means most of the market is likely short already,” he said, meaning it can also be a counter-trend signal when the market is setting up for a reversal.



It comes as netflow across all exchanges and stablecoins spiked to its highest point this year on Friday, hinting at increasing selling pressure over the short-term.



Netflow measures the difference between coins flowing into and out of a given exchange, which can be measured as Inflow &#8211; Outflow, according to CryptoQuant.



A high value indicates increasing selling pressure across spot markets, while a spike in the value across derivatives exchanges points to increased volatility.



The data follows stablecoin issuer Tether’s <a href="https://twitter.com/Tether_to/status/1631949117399105537?s=20">announcement</a> on Friday that it would work with crypto exchange Binance to transfer Tether&#8217;s supply from the Tron blockchain to the Ethereum.



The transfer involved converting 1.6 billion Tether tokens (<a href="https://blockworks.co/price/usdt">USDT</a>) from Tron&#8217;s native token standard to the Ethereum ERC20 token standard.&nbsp;



While a reason for the chain swap was not given, it could be related to factors such as network congestion, transaction fees or market demand.



Both on-chain metrics can depict specific behavior, but they often don’t paint a clear enough picture, Holman said.



“Funding rates are a lagging indicator to price and rarely leads,” he said. “Depending on the funding rate calculations at each of the venues, these rates can vary quite a lot,” he said.



They’re also heavily dependent on the flows specific to that exchange, he said.



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Investors Tread Cautiously as Bitcoin Price Rally Stalls

Casey Wagner

Bitcoin and ether rallied Tuesday morning on cooler-than-anticipated inflation data ahead of the Federal Reserve’s interest rate decision.&nbsp;



Inflation rose 7.1% year-over-year in November, coming in lower than analysts’ expectations of 7.3%. Month-over-month inflation rose 0.1%, also beating expectations of 0.3%. 



Read more: <a href="https://blockworks.co/news/what-is-an-inflation-hedge-finding-stability-in-todays-market">What Is an Inflation Hedge? Finding Stability in Today’s Market</a>



Bitcoin, ether and stocks all rose following the data release. The S&amp;P 500 and Nasdaq Composite index futures moved into the green, rising 3% and 4%, respectively.&nbsp;



Tuesday’s reading led “to a strong bullish move higher in bitcoin and other digital assets,” Marcus Sotiriou, market analyst at GlobalBlock, said.&nbsp;



“This is because the expected CPI of 7.3% would indicate that inflation is inflecting down convincingly, after decreasing for 2 months in a row, which would signal to the Federal Reserve that it could be time to stop raising rates,” Sotiriou added.&nbsp;



<h3 class="wp-block-heading">Fed expectations</h3>



Markets are still <a href="https://blockworks.co/news/crypto-markets-eye-key-events-this-week">prici</a><a href="https://blockworks.co/news/crypto-markets-eye-key-events-this-week" target="_blank" rel="noreferrer noopener">n</a><a href="https://blockworks.co/news/crypto-markets-eye-key-events-this-week">g in</a> a 50 basis point interest rate increase on Wednesday, <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html" target="_blank" rel="noreferrer noopener">CME Group</a> data shows. If all goes according to plan, major prices moves should be avoided.&nbsp;



&#8220;Past FOMC meeting outcomes have always had the same effect; erratic swings in bitcoin prices,” Daniel Keller, co-founder of Flux, said. “However, considering the current anticipation of a slowdown in the inflation rate, we might look forward to some market gains even as the year runs out.”



“There’s almost certain indication this week’s FOMC meeting will raise interest rates by 50 basis points instead of 75 basis points, which calms the market bears a bit,” Youwei Yang, chief economist at BTCM, said. “More importantly, we should pay closer attention to the final goal of the Fed.”&nbsp;



The Fed is currently on track to reach between 500 and 525 basis points in March or May 2023 and stop rate hikes, Yang said. An earlier stop would be bullish for markets, where a later stop or higher basis point goal could be bearish, she added.



Eyes will still be on employment data in the coming months, though, analysts said. A soft landing at this point is unexpected, Aneta Markowska, chief financial economist at Jefferies, said.



“It needs to convince the healthiest firms to freeze hiring, without pushing the weakest firms to lay off workers,” Markowska said. “If history is any guide, the odds of achieving a positive outcome are low.”



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Cooling Inflation Has Bitcoin, Stocks Heating Up

A key measure of market volatility is pointing to an extended bear market, and it’s bad news for bitcoin, analysts say.&nbsp;



The CBOE VIX Index, which measures volatility based on the S&amp;P 500 options market and generally has an inverse relationship with equities, shows big investors’ demand for hedges.&nbsp;



In the beginning of 2022, traders were thrown when lows in the S&amp;P 500 index were not accompanied by VIX highs.&nbsp;



In recent weeks, the VIX has still increased as stocks have dipped, but not to the expected levels, Tom Essaye, founder of Sevens Report Research said.&nbsp;



“The good news is that the recent S&amp;P lows in mid-October did show a VIX of 34, the same [index low that preceded the 1990 recession],” Nicolas Colas, co-founder of DataTrek Research, said. “The bad news is that every other recessionary market low — even 2002 — coincided with a higher VIX than that.”&nbsp;



The VIX is down about 12% over the past month, while the S&amp;P 500 has rallied around 6%. But, in the past five days, the VIX has shot up nearly 13%, still sitting only at around 22, while the S&amp;P 500 has dropped a modest 2%.



<blockquote class="wp-block-quote">
“We remain in a liquidation phase of the market cycle during which more sophisticated, institutional investors are selling their long-term equity holdings,” Essaye said.
</blockquote>



“Institutional money managers are the biggest players in the options market as they continually hedge their long equity positions during cyclical bull markets and that explains why when stocks go down, the VIX goes up,” he added.&nbsp;



A rising VIX is going to be a warning that stocks are in for a drawdown, Essaye said, and if bitcoin continues trading like Big Tech, the cryptocurrency is in trouble, too. Bitcoin was trading fairly flat at around $17,180 at time of publication.&nbsp;



“With risk appetite not improved, bitcoin continues to trade around $17,000 and await upcoming data,” Craig Erlam, senior market analyst at Oanda, said. “Unfortunately for bitcoin, the timing means it never participated in the last risk rebound and there isn&#8217;t much appetite to make up for lost time.”



Bitcoin’s bear market still has some steam, Galaxy Digital research analysts wrote in a note Friday.&nbsp;



“Bitcoin is currently trading about -75% from its last all-time high. Prior bear markets saw lows at -83.5% on Dec. 13, 2018, -85% on Jan. 14, 2015, and -93.5% on Nov. 18, 2011,” analysts noted.&nbsp;



Even though the S&amp;P 500’s latest rally has seen the index claw back more than 15% of its year-to-date lows, the trend remains bearish, Essaye said.&nbsp;



“Tech and growth stocks have recovered some ground on value recently but we continue to believe that progress in the economic recovery and subsequently higher interest rates will be a headwind for tech and a rotation from growth to value can be utilized to reduce tech overweights,” Essaye said.



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Volatility Index Paints a Gloomy Picture for Bitcoin, Equities

Cryptocurrencies and equities posted significant gains Thursday following several sessions in the red as inflation data came back better-than-expected and digital asset traders digested the fall of FTX.&nbsp;



Bitcoin and ether rebounded Thursday, rallying 12% and 21%, respectively. The bounce back comes a day after both currencies <a href="https://cms.blockworks.co/news/crypto-equities-slide-as-investors-digest-ftx-fall-midterm-results/" target="_blank" rel="noreferrer noopener">extended losses</a> Wednesday when Binance <a href="https://cms.blockworks.co/news/did-cz-really-have-any-intention-of-buying-ftx/" target="_blank" rel="noreferrer noopener">backed out</a> of the deal investors were <a href="https://cms.blockworks.co/news/1-binance-ftx-deal-is-off-unless-ftx-us-is-part-of-the-package-source/" target="_blank" rel="noreferrer noopener">hoping</a> would save the industry. 



“This week’s events also underline the power of bitcoin as a genuinely decentralized cryptocurrency offering financial self-sovereignty to the individual — in stark contrast to supposedly reputable tokens that can be wiped out overnight,” a note from analysts at SatoshiLabs&#8217; crypto hardware wallet, Trezor, read. “These crypto earthquakes stimulate a consumer response.”



Equities also ended the trading session in the green, thanks to lowered fears over inflation and heightening concern over a recession. The S&amp;P 500 and Nasdaq closed 6% and 7% higher, respectively. Thursday’s Consumer Price Index <a href="https://www.bls.gov/news.release/cpi.nr0.htm" target="_blank" rel="noreferrer noopener">came in lower</a> than analysts’ expectations and showed a 7.7% increase in prices year-over-year and 0.4% increase over the last month. 



“As worries of recession and the potential for a financial shock overtake inflation anxieties, bond investors may want to consider ‘lengthening’ maturities, and stock investors should prepare for a renewed and sustained rally,” Jim Paulsen, chief investment strategist at The Leuthold Group, said.&nbsp;



Even Wednesday’s sell-off, which saw the S&amp;P 500 and Nasdaq Composite indexes closing 2.1% and 2.5% lower, respectively, should have been greater, Nicholas Colas, co-founder of DataTrek Research, said.&nbsp;



“The decline should have been worse, given unexpected midterm results and volatile virtual currencies. Investor confidence needs a positive catalyst from here, however,” Colas said.&nbsp;



Cryptocurrencies will still have a long storm to weather, analysts warn.&nbsp;



<blockquote class="wp-block-quote">“It will take weeks to learn the full extent of which firms have exposure to FTX and what percent of customer funds are recoverable,” Tom Nath, chief operating officer at BitOoda, said.</blockquote>



“FTX is still claiming that assets exceed customer liabilities, but that illiquidity is preventing them from unfreezing withdrawals,” he said.



Investor fear can spread across a brokerage account, Colas added. 



​&#8220;While [crypto] is theoretically very different from equities, many investors hold both on the same retail investor trading platforms. A sharp decline in online currency values can therefore spill over into other, unrelated, markets,&#8221; he said. “There’s an old trader’s saying that &#8216;in a crisis, correlations go to 1.’”



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Inflation Cools, Bitcoin and Stocks Bounce

Ben Strack

Crypto and stocks extended their declines Wednesday as investors kept their eyes peeled for pending midterm election results and updates regarding apparently canceled plans for Binance to purchase FTX.



A day after its short-lived comeback above $20,000 Tuesday, bitcoin plunged below $16,000, trading 14% lower as of 4:45 pm ET. Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level Wednesday afternoon. Nearly two months after the Merge, ether turned deflationary Wednesday as the supply decreased thanks to heightened transaction demand and surging gas fees.&nbsp;



The decline does not come as a surprise to analysts, who said volatility is to be expected given the uncertainty around FTX’s solvency and legal standing, plus concerns that Binance’s rescue, which was <a href="https://cms.blockworks.co/binance-buying-ftx-news-enough-to-pull-crypto-back/">initially</a> well-received, <a href="https://cms.blockworks.co/1-binance-ftx-deal-is-off-unless-ftx-us-is-part-of-the-package-source/">may not be coming</a>.



<h3 class="wp-block-heading">Future of FTX in doubt&nbsp;as Binance gets cold feet</h3>



As some predicted, Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of <a href="https://t.co/FQ3MIG381f">https://t.co/FQ3MIG381f</a>.&mdash; Binance (@binance) <a href="https://twitter.com/binance/status/1590449161069268992?ref_src=twsrc%5Etfw">November 9, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Stefan Rust, CEO of immersive web tech agency Laguna Labs, said Tuesday he thought it was “highly unlikely” Binance’s acquisition of FTX would ever come to fruition, adding that Binance CEO Changpeng Zhao was simply “trying to stem the blood flow.”



Sam Dibble, a partner at law firm Baker Botts, also had questions about whether the deal would close. He told Blockworks Wednesday — just before Binance said it would no longer pursue the acquisition — that he looked at the company’s move as “an attempt at market confidence building.”



Dibble had said the intended transaction could turn into more of a financing deal.



“Binance could say, ‘Well we were thinking of acquiring the company, but it turns out really what we want are the assets and not the liabilities,’” he said. “These types of changes in structure of a deal happen all the time in [mergers and acquisitions] when you have a non-binding term sheet like this.”



“I imagine transparency surrounding the size of the hole in FTX&#8217;s balance sheet, and presumably the liquidations and bankruptcies that may follow, will be maximum blood within crypto,” Matt Fiebach, <a href="https://www.blockworksresearch.com/" target="_blank" rel="noreferrer noopener">research</a> analyst at Blockworks, said.&nbsp;



<h3 class="wp-block-heading">Stocks join crypto down sharply ahead of Thursday&#8217;s CPI print</h3>



Outside of the crypto carnage, equities tumbled, too. The S&amp;P 500 and Nasdaq Composite indexes closing 2.1% and 2.5% lower, respectively. Uncertainty about the future of Federal Funds Rates, which Federal Reserve Chairman Jerome Powell hinted could hit 5%, coupled with election results still trickling in after the close, has traders alarmed. Meanwhile, the dollar index (DXY) was up 0.75%, reversing Tuesday’s slide.



“The current situation reflects relative improvement in the outlook as spiking global yields are no longer pressuring stocks,” Tom Essaye, founder of Sevens Report Research said. “But that’s about the only positive we saw over the past month.”



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Bitcoin Price Tanks Below $16K As Binance Pulls FTX Deal

David Canellis

<div id="highlights-block_634568f4d7c18" class="highlights">
 <ul>
 <li>Google has chosen Coinbase to process crypto payments for select customers</li>
 <li>Both companies are seeking to diversify their revenue streams</li>
 </ul>
 
</div>



Coinbase stock jumped during pre-market trade on Tuesday on word that Google will enable some customers to pay for the tech giant’s cloud services with cryptocurrency starting next year.



The deal will see Coinbase shift its data-related applications from its usual Amazon Web Services’ cloud to Google, CNBC <a href="https://www.cnbc.com/2022/10/11/google-selects-coinbase-to-take-cloud-payments-with-cryptocurrencies.html" target="_blank" rel="noreferrer noopener">reported</a>.



Google will accept payment for cloud services from a small group of customers across the Web3 space via a Coinbase Commerce integration.&nbsp;



Coinbase’s ecommerce offering <a href="https://commerce.coinbase.com/" target="_blank" rel="noreferrer noopener">supports</a> 10 digital assets such as bitcoin and ether alongside stablecoins USDC and tether, as well as meme coins dogecoin and shiba inu.&nbsp;



As with the rest of its customers, Coinbase would take a cut of Google-related transactions, although the amount of revenue it could potentially generate is unclear.&nbsp;



Amit Zavery, vice president at Google Cloud, told CNBC it had explored deals with multiple companies before landing with Coinbase. Jim Migdal, Coinbase vice president of business development, said the two companies had been conversing for months.



Coinbase has historically relied on trading fees to generate almost 90% of its revenue and has been working to <a href="https://cms.blockworks.co/coinbase-expects-softer-first-quarter-after-strong-q4/" target="_blank" rel="noreferrer noopener">diversify</a> its income streams to weather the cyclical nature of the crypto sector.&nbsp;



Google has similarly pushed to expand beyond its main revenue source: <a href="https://nymag.com/intelligencer/2019/02/google-earnings-show-it-needs-to-be-more-than-an-ad-company.html" target="_blank" rel="noreferrer noopener">advertising</a>. The Big G is now looking to potentially offer digital asset management services via Coinbase’s custody offering Prime, although those plans appear purely exploratory for now.



<h3 class="wp-block-heading">Coinbase stock buoyed more than Google parent&nbsp;</h3>



While Google has long been <a href="https://cloud.google.com/blog/topics/public-datasets/bitcoin-in-bigquery-blockchain-analytics-on-public-data" target="_blank" rel="noreferrer noopener">receptive</a> to the rise of cryptocurrencies, the firm formally flagged its intention to expand its own blockchain offerings by <a href="https://cms.blockworks.co/google-creates-blockchain-unit-hires-new-founding-leader/" target="_blank" rel="noreferrer noopener">forming a dedicated unit</a> earlier this year.



Sundar Pichai, the CEO of parent company Alphabet, also said the company was “definitely looking at blockchain” in a <a href="https://cms.blockworks.co/alphabet-ceo-says-company-definitely-looking-at-blockchain/" target="_blank" rel="noreferrer noopener">February earnings call</a>, particularly in relation to powering computing and services layers for YouTube and Google Maps.



Alphabet has been one of the <a href="https://cms.blockworks.co/alphabet-poured-1-5b-into-blockchain-companies-over-10-months-study-finds/" target="_blank" rel="noreferrer noopener">most active corporate investors</a> in blockchain firms since as early as <a href="https://www.cnbc.com/2017/10/18/google-goldman-sachs-investors-blockchain.html" target="_blank" rel="noreferrer noopener">2017</a>, alongside the likes of Goldman Sachs and SBI Holdings.



Still, this deal seems far more focused on cryptocurrencies specifically, rather than their underlying technologies. And so far, markets seem responsive to how this could benefit Coinbase — more than Google.



The exchange’s stock, which is down 73% year to date, rose 5% during pre-market trading on news of the deal. The tech-heavy NASDAQ 100, on the other hand, shed 0.25%, alongside Alphabet.





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Coinbase Stock Pops on Google Deal To Accept Crypto for Cloud

Jocelyn Yang

<div id="highlights-block_62c753147bf8f" class="highlights">
 <ul>
 <li>Bitcoin rose 7.62% to $21,800 while ether gained 8.27% to $1,284</li>
 <li>Online gaming firm Roblox&#8217;s stock jumped 16.2% to $39.52 in the past five days</li>
 </ul>
 
</div>



Major cryptocurrency assets traded up Thursday. Bitcoin (BTC) jumped 7.62% to over $21,800 while ether (ETH) gained 8.27% in the past 24 hours up to $1,284 as of 4:00 pm ET.&nbsp;



In the wake of the release of the <a href="https://cms.blockworks.co/fed-officials-expect-slower-growth-imminent-rate-rises/" target="_blank" rel="noreferrer noopener">Federal Reserve’s minutes</a> Wednesday, the US dollar continued to strengthen, closing in on parity with the euro for the first time since <a href="https://www.macrotrends.net/2548/euro-dollar-exchange-rate-historical-chart">the early 2000s</a>. 



US equities also climbed Thursday, emphasizing the current <a href="https://cms.blockworks.co/market-wrap-bitcoin-eth-rise-after-wrapping-up-worst-month/" target="_blank" rel="noreferrer noopener">strong correlation</a> between BTC and the US stock market. Nasdaq jumped 2.3%, while S&amp;P 500 and Dow Jones rose 1.49% and 1.12%, respectively.


[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#7C27D3&#8243; assets=&#8221;BTC-USD,ETH-USD,^GSPC,^DJI,^IXIC&#8221; start_expanded=&#8221;true&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;1mo&#8221; chart_interval=&#8221;1d&#8221;]



Concerns over crypto lenders continue. “There will be no price recovery until the dust has settled and every company at risk has either gone bankrupt, been acquired, or stabilized,” Michael Rosmer, CEO and co-founder of data provider DeFiYield, told Blockworks in an email, referring to the recent spate of failures among <a href="https://cms.blockworks.co/wheres-the-liquidity-crypto-lending-explained/" target="_blank" rel="noreferrer noopener">crypto lenders</a>.



<blockquote class="wp-block-quote">“I think there’s concern about consolidation in the industry, in large part because the industry prides itself as promoting decentralization. So a lot of the actual DeFi [decentralized finance] protocols might see this as a call to action, of sorts, to double down and build out their superior borrow-lend services. After all, DeFi — as opposed to the centralized [centralized finance] lenders — has held up pretty darn well in this mess,” he said. </blockquote>



DeFi protocol Aave today introduced a proposal to launch a decentralized, collateral-backed stablecoin named <a href="https://governance.aave.com/t/introducing-gho/8730" target="_blank" rel="noreferrer noopener">GHO</a>. 



If approved, Aave said GHO would “make stablecoin borrowing on the Aave Protocol more competitive, provide more optionality for stablecoin users and generate additional revenue for the Aave DAO by sending 100% of interest payments on GHO borrows to the DAO,” the proposal read. Aave’s token has climbed 13.82% over the past 4 hours to $71.44.



Online gaming firm Roblox&#8217;s stock jumped 16.2% to $39.52 in the past five days. Analysts expected its continuous growth in 2023, <a href="https://finance.yahoo.com/news/why-roblox-stock-is-on-fire-181849046.html" target="_blank" rel="noreferrer noopener">Yahoo Finance</a> reported. 


[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#8221CC&#8221; assets=&#8221;RBLX&#8221; start_expanded=&#8221;true&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;6mo&#8221; chart_interval=&#8221;1d&#8221;]



Jeffrey Halley, senior market analyst at OANDA, said in a note Thursday that gold appears to be <a href="https://www.monex.com/gold-prices/" target="_blank" rel="noreferrer noopener">wobbling</a> after its price broke under $1,740 per ounce, hitting the lowest of the year. 



Meanwhile, the euro’s further slide still puts a volatility warning for both crypto and equities, according to Rosmer. “Germany, the industrial powerhouse of Europe, is facing a dramatic drop-off in production thanks to the Russian threat to cut off natural gas, and France just nationalized its national utility company to keep energy costs down,” he said.&nbsp;



“Even more investors will flee to safe-haven assets, meaning that without positive news to counterbalance Europe’s economic struggles, investors could be due for further pain,” he added.&nbsp;



<h3 class="wp-block-heading">Top Stories</h3>



<a href="https://cms.blockworks.co/regulators-turn-up-the-volume-on-crypto-messaging/" target="_blank" rel="noreferrer noopener">Regulators Turn Up the Volume on Crypto Messaging</a>



<ul><li>A new report shows regulators around the world have increasingly issued crypto-related regulatory issuances, with over 4,666 in the first four months of 2022. Such messaging have increased by 7,436% since 2018. </li><li>Countries in North America account for 51% of all crypto-related regulatory issuances, followed by 32% in European countries. </li></ul>



<a href="https://cms.blockworks.co/cosmos-based-umee-lines-up-first-ibc-price-oracle/" target="_blank" rel="noreferrer noopener">Cosmos-based Umee Lines Up First IBC Price Oracle</a>



<ul><li>Cosmos-based borrowing and lending platform Umee will soon launch the first price oracle service for Cosmos’ inter-blockchain communication (IBC) protocol, the company announced Thursday. </li><li>Known as “Orion,” the oracle will be provided by Umee blockchain’s validators which run software that will automatically pull pricing data from a set of centralized exchanges, plus the decentralized exchange Osmosis. </li></ul>



<a href="https://cms.blockworks.co/solana-investor-sues-project-insiders-claims-network-highly-centralized/" target="_blank" rel="noreferrer noopener">Solana Investor Sues Project Insiders, Claims Network ‘Highly Centralized’</a>



<ul><li>A Solana investor filed a class-action lawsuit against key parties in the Solana ecosystem, allegedly making misleading statements and profiting from selling unregistered securities to retail customers.</li><li>“These promotional efforts took SOL securities from a relatively obscure crypto-asset to one of the top crypto-assets in the world,” the plaintiff Mark Young wrote.</li></ul>



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Market Wrap: Bitcoin, ETH Jump as Equities Turn Positive Thursday

<div id="highlights-block_62bc8f1cb2be3" class="highlights">
 <ul>
 <li>Bitcoin and ether fell back from previous record-breaking correlations with stock prices</li>
 <li>Traders still have an eye on equities though, and a rebound in stocks is expected to be good news for crypto prices</li>
 </ul>
 
</div>



Bitcoin and ether prices have decoupled from their previous all-time high correlations with equities, but experts say traders shouldn’t write off stock prices just yet.&nbsp;



In May, the correlation coefficient between bitcoin and the tech-heavy Nasdaq broke 0.8 for the first time — bitcoin’s correlation to the S&amp;P 500 also hit similar levels in early May. In June, the correlation between bitcoin and the S&amp;P 500 fell to around 0.5, according to <a href="https://charts.coinmetrics.io/correlations/#435" target="_blank" rel="noreferrer noopener">data</a> from Coin Metrics. A coefficient of 1 means the assets are moving in tandem, while a -1 signals the opposite. 


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh3.googleusercontent.com/o0MhaK6N_M9A14tljOY3FoWyVnz9CU1wtTzlLLWLU_3Szzzv8aWzW8Jr096jug_pU31jlVt3U0-ixEd7z2idLTXz_2PVbtRQoNXLEUJZkVpdNKER-9YJZQWEJH9DuAn2jhlpCfX4GLopRw5psw" alt=""/><figcaption>Source: Kaiko</figcaption></figure></div>


“Previous all-time highs were reached in the aftermath of the March 2020 crash, where all financial assets experienced extreme drawdowns, which saw BTC&#8217;s correlation with the S&amp;P 500 hit 0.76,” said Clara Medalie, strategic initiatives and research director at data provider Kaiko.



<blockquote class="wp-block-quote">“Since May&#8217;s all-time highs, bitcoin&#8217;s correlation has since retraced following a divergence in trading patterns for the two asset classes.” </blockquote>



Ether, which for the past six months has traded almost as one with bitcoin with a correlation coefficient of 0.9, has experienced the same trend. In May, the correlation coefficient between ether and the S&amp;P 500 broke 0.7 before falling to around 0.60 in June, according to <a href="https://charts.coinmetrics.io/correlations/" target="_blank" rel="noreferrer noopener">data</a> from Coin Metrics. 



“This divergence was spurred by a wave of dramatic collapses of some of the industry&#8217;s largest firms, causing crypto prices to tank far faster than equities,” Medalie said.&nbsp;



But even as bitcoin and ether begin to trade more independently from equities, the broader trend is likely to continue.&nbsp;



“Crypto is highly correlated to equities, so if equity markets were to turn around, this would likely have a bullish effect on crypto,” Medalie said.



<blockquote class="wp-block-quote">“It is clear that investors have treated equities and cryptoassets as risky assets over the past few months amid an increasingly fraught macro environment.” </blockquote>



Analysts are not holding their breath for a stock market bounce anytime soon, especially with current inflation levels and increasing uncertainty surrounding the Federal Reserve’s plans for interest rate increases.&nbsp;



“No one wants to buy the dip anymore after seeing a few stock market rebounds get completely faded,” Edward Moya, senior market analyst at OANDA, wrote in a note Wednesday. “Investors removed $10 billion out of equity funds last week and it doesn’t seem likely that sentiment will dramatically improve that the Fed will be able to deliver that soft landing.”&nbsp;



Traders are still keeping a close eye on stocks, Dan Matuszewski, co-founder of investment firm CMS Holdings, said. Invesco’s QQQ Trust, known as the Qs, is one tech-heavy ETF Matuszewski said he’s always watching.&nbsp;



“We mostly do what the Qs are doing,” Matuszewski said. “They’re a pretty good proxy for a while now, at least until things calm. I say this because we come in every day and sometimes we’re really just trading the Qs.”



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Crypto’s Correlation to Equities Dips Following All-time Highs in May

<div id="highlights-block_629fe34a39ecb" class="highlights">
 <ul>
 <li>Leading Australian crypto exchange Swyftx will merge with retirement and equities trading platform Superhero</li>
 <li>Following the completion of the deal, both business&#8217; services are expected to be bundled under one interface for their combined 800,000-strong customer base</li>
 </ul>
 
</div>



Swyftx, one of Australia&#8217;s largest crypto exchanges by total volume, and ASX trading platform Superhero said Tuesday they will merge to create a &#8220;$1.5 billion (US$1 billion) financial services giant.&#8221;



The merger will attempt to forge Australia&#8217;s first crypto &#8220;super app&#8221; that offers access to both decentralized and traditional finance by enabling investment in crypto, retirement funds and equities, according to a statement.



The race is on to create Australia&#8217;s first financial super app, a platform designed to bundle multiple services from existing businesses across various sectors in an attempt to present a seamless customer experience. The country&#8217;s banks are leveraging their extensive customer bases in hopes of claiming the title, sans crypto.



&#8220;The proposed merger represents a significant step for both businesses in terms of their evolution from disruptive tech players into a single, major financial institution that can grow across domestic and international markets,&#8221; Swyftx co-founder Alex Harper said.



Both companies said they have experienced explosive growth over the last 12 months with Brisbane-based Swyftx clocking a 1,200% increase in users while the online share trading platform has witnessed a 600% rise.



The $1 billion figure is an agreed valuation by Swyftx and the Superhero board of directors based on various business fundamentals including past revenue and forecast revenue, a spokesperson told Blockworks.



&#8220;There’s confidence among both parties that the combined business easily justifies the valuation,&#8221; the spokesperson said. &#8220;This is two private companies coming together in a transaction with a significant equity component, so the key is relative valuation.&#8221;



Over 800,000 customers are expected to be counted at the completion of the deal, with 200,000 being tacked on to Swyftx via the superannuation and trading platform&#8217;s existing customers. Like a 401(k) in the US, <a href="https://www.investopedia.com/terms/s/superannuation.asp" target="_blank" rel="noreferrer noopener">superannuation</a> is Australia&#8217;s retirement pension fund plan designed to deduct a portion of an employee&#8217;s income into a long-term savings account.



Both platforms will continue to operate their separate platforms while plans are made to offer both service offerings to investors. Following the deal&#8217;s wrap up, customers of both platforms will be able to log in via a unified interface under a single account.



The combined business will serve investors across Australia and New Zealand with offices in Sydney, Brisbane, London and Vancouver. The merger is expected to be completed early next year.



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Australian Crypto Exchange Swyftx, Trading App Superhero Reveal ‘$1B’ Merger

<div id="highlights-block_628660a831e1b" class="highlights">
 <ul>
 <li>Currently in private beta stage, FTX Stocks will be available to residents in all 50 states</li>
 <li>Allows retail brokerage accounts to be funded with fiat-backed stablecoins</li>
 </ul>
 
</div>



FTX US unveiled its stock platform on Thursday, allowing retail investors to trade traditional exchange-listed stocks and ETFs alongside crypto and non-fungible tokens (NFTs).&nbsp;



The company — the US affiliate of Bahamas-based crypto exchange FTX — will now offer trading and investing in hundreds of US stocks and ETFs within its existing crypto trading app.



<a href="https://ftx.us/" target="_blank" rel="noreferrer noopener">FTX US</a> President Brett Harrison noted the company’s growing retail user base and the demand for diversified investing.



“On any given day, a person might want to buy some bitcoin or they might want to buy some Tesla,” he told Blockworks. “They’re not going to want to open two different accounts…and move their savings around between two different applications to do this sort of investing.”



Called FTX Stocks, the offering will initially route all orders through Nasdaq in an effort to provide transparent trade execution and fair pricing, according to the company. It is set to begin in a private beta phase for select US customers chosen from a waitlist.



FTX Stocks will have no-fee brokerage accounts, zero-commission trading, and free market and company data. The company is not requiring minimum customer balances.&nbsp;



The launch also marks the first time that retail brokerage accounts can be funded with fiat-backed stablecoins, as well as with traditional USD deposit methods such as wire transfers and credit card deposits, the company said.



FTX US is currently offering a majority of stocks in the S&amp;P 500 and Nasdaq 100, as well as several ETFs, Harrison said, adding that the company would seek to “rapidly expand” that universe over time.



“We have a theory that we feel is pretty well substantiated by the success of Robinhood, for example, that by having more options in one app, we can help attract and retain our customers and give them a better experience,” Harrison said. FTX’s founder and CEO, Sam Bankman-Fried, <a href="https://cms.blockworks.co/ftxs-sam-bankman-fried-spots-opportunity-in-troubled-markets/" target="_blank" rel="noreferrer noopener">acquired a 7.6% stake</a> in Robinhood last week. 



The launch comes as FTX US has focused on financial inclusion beyond crypto. The company recently selected Chicago as its headquarters and <a href="https://cms.blockworks.co/ftx-rolls-out-program-to-support-underbanked-chicago-communities/" target="_blank" rel="noreferrer noopener">announced a program</a> focused on supporting the city’s underbanked communities.



As part of its partnership with nonprofit organization Equity And Transformation, FTX US’s one-year program offers $500 per month in supplemental income, financial literacy education, a zero-fee bank account and a Visa debit card to 100 Chicagoans.



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FTX US Launches Zero-commission Stock Trading

Macauley Peterson

<div id="highlights-block_d53364dddebbf7b82d4e9bb9bd5f0b6c" class="highlights">
 <ul>
 <li>The S&#038;P 500 ended the day -1% lower after initially trading up 1.5%, which has only occurred 8 times since the 2009 GFC, according to Bianco Research</li>
 <li>Bitcoin is now at its lowest point since Aug. 5, when it traded as low as $37,316 intraday</li>
 </ul>
 
</div>



All major digital assets are trading lower, following a sharp decline Thursday into Friday, and <a href="https://blockworks.co/price/btc">BTC</a> is currently testing the lows at $38,150, echoing weakness in US equity markets futures. Around $750 million in long crypto derivatives positions were liquidated, according to data from <a href="https://www.coinglass.com/LiquidationData" target="_blank" rel="noreferrer noopener">Coinglass</a>.



The Nasdaq 100 ended Thursday down about -2.2%, and has fallen nearly 11% over the past 15 trading days, now approaching its early-October lows of around 14400.



The S&amp;P 500 also closed down roughly -1%, after initially rising 1.5%. <a href="https://twitter.com/biancoresearch/status/1484283297010262017">According to Jim Bianco</a> of Bianco Research, that has occurred “only 8 times since the Global Financial Crisis in 2009.”&nbsp;



Bitcoin&#8217;s correlation with the tech-sector has been on an uptrend since the middle of 2019 and is near its all-time peak, on a monthly timescale, of about 0.8, as measured by the correlation coefficient (a 1.0 reading would be perfectly correlated, while -1.0 would be inversely correlated).



Positive correlation with the Nasdaq 100 has been the predominant condition for bitcoin throughout its history, particularly since 2017, a counterpoint to the narrative of BTC as a risk-off asset more akin to gold. Gold, meanwhile, has been significantly less correlated with the Nasdaq, although most assets moved in tandem throughout the stimulus-fueled uptrend in equities after the March 2020 crash.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="388" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png" alt="" class="wp-image-15826" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-21-BTC-Nasdaq-correlation-1024x388.png?w=1708 1708w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Above: BTC correlation with the Nasdaq from 2013-present; Source: TradingView Below: Gold correlation with the Nasdaq 2013-present<meta charset="utf-8">; Source: TradingView</figcaption></figure>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="434" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png" alt="" class="wp-image-15827" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-13.55.03-1024x434.png?w=1712 1712w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



“[The] market is catching a risk-off momentum due to [a] spike in supply side inflation fear as well as geopolitical concern over Russia/Ukraine situation,” William Fong, Treasurer at Australian trading firm Zerocap told Blockworks.



<blockquote class="wp-block-quote">
“Safe haven portfolio flow has shifted from stocks, credit and cryptocurrency markets into treasury bonds today in search of risk protection.”&nbsp;
</blockquote>



Fong also pointed to the unwinding of bullish leveraged positions in the market for crypto derivatives. The global open interest for bitcoin — a measurement of derivatives activity — has indeed fallen to about $11.4 billion in the wake of the sell-off, down from a peak of around $13.6 billion in late December.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1019" height="482" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg" alt="" class="wp-image-15828" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=1019 1019w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-21-at-14.04.08.jpg?w=50 50w" sizes="(max-width: 1019px) 100vw, 1019px" /><figcaption class="wp-element-caption">Global Open Interest, the total number of outstanding contracts across all exchanges; Source: KrownTrading.net</figcaption></figure>



However, there is hope for bitcoin bulls. By some metrics, such as the daily <a href="https://www.investopedia.com/terms/s/stochrsi.asp">stochastic RSI</a>, both equities and bitcoin are in oversold territory. And both remain in a primary uptrend on the monthly timeframe, with higher lowers and higher highs. For bitcoin, that remains the case so long as BTC ends the month above about $35,000.



Some bitcoin-specific indicators such as the Net Unrealized Profit/Loss (NUPL) — comparing BTC sales at a profit with those at a loss — show similarities with the summer 2021 sell-off, which found a bottom around $32,000, after intra-week moves as low as the $29,000 area.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> Net Unrealized Profit/Loss (NUPL) presents the magnitude of <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a> holder unrealized profit and loss, as a proportion of the Market Cap. NUPL is currently trading at 0.43, the lowest level of network profitability since July 2021. Live chart: <a href="https://t.co/QlJUY5K6eW">https://t.co/QlJUY5K6eW</a> <a href="https://t.co/Zzge8fTUwZ">pic.twitter.com/Zzge8fTUwZ</a>&mdash; glassnode (@glassnode) <a href="https://twitter.com/glassnode/status/1484307499704807427?ref_src=twsrc%5Etfw">January 20, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



European equity markets are trading lower, with the EURO STOX 600 index down -0.68%. The S&amp;P futures market points to a similar down open for US equities, and the Nasdaq 100 futures are down about -1%.




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Sebastian Sinclair contributed reporting.



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$750M Longs Liquidated in Thursday Sell-off Alongside US Equities

<div id="highlights-block_60c9fc7f1690b" class="highlights">
 <ul>
 <li>US closed higher Tuesday after Monday&#8217;s turbulent session</li>
 <li>Second quarter earnings season continued with largely better-than-expected results </li>
 </ul>
 
</div>



US stocks closed higher Tuesday as second quarter earnings continued to come in above expectations, mostly overshadowing concerns over the Delta variant and additional restrictions. 



The S&amp;P 500 rallied as companies largely beat on earnings estimates. Shares of Under Armour rose 7% after the athletic appeal company beat on second quarter profit expectations. Zillow Group and Moderna are among the companies set to report later this week.



Chinese tech giant Alibaba also reported higher-than-expected second quarter results, but shares lost 1.57% as China&#8217;s regulatory crackdown intensified. Similarly, Marriott International earnings showed a significant rebound from last year, but shares fell 1.82% as Delta variant concerns grow. 



Investors and analysts are awaiting Friday&#8217;s jobs data. The non-farm payroll report will reveal when traders may start to see tapering from the Federal Reserve. Chairman Powell has indicated that there will only be a pullback in the easy-money policies when employment numbers start to improve. 



<h3 class="wp-block-heading">Equities</h3>



<ul><li>The Dow rose 0.8%.</li><li>S&amp;P 500 rallied 0.82%.</li><li>Nasdaq gained 0.55%.</li></ul>



<h3 class="wp-block-heading">Insight</h3>



Jim Paulsen, chief investment strategist at The Leuthold Group, weighed in on inventory liquidation and what we can expect in markets going forward. 



&#8220;Dwindling inventories have held back real-GDP growth, and widespread shortages of numerous products have led to the recent spike in the inflation rate. These undercurrents have, in turn, set off a raging debate at the Federal Reserve and among investors as to whether this inflation is, in fact, transitory or incessant? But, overall, the inability of companies to keep pace with an explosive revival in consumer demand has become the primary economic problem.&#8221; 



<h3 class="wp-block-heading">DeFi</h3>



<ul><li>Uniswap is trading at $21.21, down 5.26% in 24 hours at 4:00 pm ET.</li><li>Chainlink is trading at $23.36, gaining 1.65% in 24 hours at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Crypto</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>Bitcoin is trading around $38,052.15, down 2.1% in 24 hours at 4:00 pm ET.</li><li>Ether is trading around $2,474.83, falling 4.69% in 24 hours at 4:00 pm ET.</li><li>VIX is down 8.17% to 17.87 at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Fixed Income</h3>



<ul><li>US 10-year Treasury yields 1.17% as of 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Commodities</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Brent crude is at $72.49 per barrel, losing 1.02%.</li><li>Gold fell 0.11% to $1,810.84.</li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul><li>The US dollar gained 0.01%, according to the Bloomberg Dollar Spot Index.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



Tomorrow the Ethereum blockchain is set to undergo a significant transformation, or <a href="https://cms.blockworks.co/ethereum-hard-fork-means-lower-gas-fees-and-higher-eth-pricing/">“hard fork”</a> as it’s called in the open source world. A hard fork is a split in the underlying base code of the software that takes it a different direction than before. Changes expected include lower gas fees and potentially higher prices for ETH.



That&#8217;s it for today&#8217;s markets wrap. I&#8217;ll see you back here tomorrow.



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.

Earnings Push Equities Higher, Delta Concerns Linger: Markets Wrap

<div id="highlights-block_60c9fc7f1690b" class="highlights">
 <ul>
 <li>US stocks erased gains made earlier in the session and closed mostly lower following slower-than-expected manufacturing data</li>
 <li>59% of S&#038;P 500 companies have reported so far and 88% of these have beaten Wall Street earnings estimates</li>
 </ul>
 
</div>



US stocks erased earlier gains late in the trading session Monday and Treasury yields continued to slide following disappointing manufacturing data. 



Equities started off strong Monday morning, largely paring losses from the prior session, before closing mostly lower. Monday&#8217;s July manufacturing data showed that there was some growth in July, but pace slowed for a second straight month as supply chain and bottleneck issues persist. 



10-year Treasury real yields, which reveals the expected inflation impact over the next decade, continued declines and fell to minus 1.16%. 



Second quarter earnings continue this week with better-than-expected data. 59% of S&amp;P 500 companies have reported so far. 88% of these have beaten Wall Street earnings estimates, according to research from DataTrek. Uber and Lyft are scheduled to report earnings this week. 



Earnings growth rate for S&amp;P 500 companies is on track to hit an expected 85.1%. If met, this would be the biggest jump since the fourth quarter of 2009, according to data from FactSet. 



<h3 class="wp-block-heading">Equities</h3>



<ul><li>The Dow fell -0.28%.</li><li>S&amp;P 500 declined -0.18%.</li><li>Nasdaq gained 0.06%.</li></ul>



<h3 class="wp-block-heading">Insight</h3>



Nicholas Colas, co-founder of DataTrek Research, weighed in on second quarter earnings reports. 



&#8220;Back in 2019, the S&amp;P 500 earned $163/share. We’re running 23 percent higher right now ($50/share in Q2, $200/share annualized) which, given everything that happened, is nothing short of astounding.&#8221; 



<h3 class="wp-block-heading">DeFi</h3>



<ul><li>Uniswap is trading at $22.40, down -2.21% in 24 hours at 4:00 pm ET.</li><li>Chainlink is trading at $23.18, declining -1.79% in 24 hours at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Crypto</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>Bitcoin is trading around $38,831.15, down -5.48% in 24 hours at 4:00 pm ET.</li><li>Ether is trading around $2,595.83, falling -2.23% in 24 hours at 4:00 pm ET.</li><li>VIX is up 1.22% to 19.46 at 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Fixed Income</h3>



<ul><li>US 10-year Treasury yields 1.18% as of 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">Commodities</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Brent crude is up to $76.39 per barrel, advancing 0.08%.</li><li>Gold fell -0.53% to $1,813.22.</li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul><li>The US dollar lost 0.1%, according to the Bloomberg Dollar Spot Index.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



<a href="https://www.investvoyager.com/" target="_blank" rel="noreferrer noopener">Voyager Digital</a> is set to acquire crypto payment platform <a href="https://www.coinify.com/" target="_blank" rel="noreferrer noopener">Coinify</a> in an <a href="https://cms.blockworks.co/voyager-digital-acquires-crypto-payment-platform-coinify/" target="_blank" rel="noreferrer noopener">attempt to accelerate</a> its international expansion and bolster capabilities in the payment space. The buy will give Voyager’s customer base of about 1.8 million users a way to make payments from their Voyager accounts.



That&#8217;s it for today&#8217;s markets wrap. I&#8217;ll see you back here tomorrow.



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.