Market deep dive: Macro-economic, monetary policies & market this week

The market was not really driven by crypto news at all this week. Instead, macro-economic and monetary policy dominated the market once again.

There were also some interesting headlines:

– US officials have seized 94k of 120k BTC from the Bitfinex hack of 2016. According to the whitepaper and FAQ, 80% of the stolen BTC would have been used to burn Leo tokens over the course of 18 months. This has driven up the price of LEO$, Bitfinex’s exchange token (+100%).

– The market has been concerned that Russia will ban crypto. In contrast to what was expected, Russia is now taking the path of regulation, following a similar path to that of India.

– It was also reported this week that Blackrock could potentially offer crypto trading through its market-dominating platform Aladdin. This would provide access to crypto for many institutional market participants in one shot.

Yesterday, the driving news came from the traditional market. The US inflation figures were higher than expected and currently mark a 40-year high. Also hawkish comments from Fed members (and even the White House) set the tone for the hiking cycle. Based on the developments of the last few days, the market is pricing in a 75% chance of 7 rate hikes for this year. Also, the odds for March exploded, and are now pricing in a 50 bps rate hike. Therefore, I think the volatility will remain above average in all markets until the decision is made.

Our opinion on the current monetary policy developments and possible implications will be covered in detail in a market commentary at the beginning of March.

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