On May 22, the New York stock market in the United States, the Dow Jones Industrial Average fell by US$140 (0.42%) from the previous trading day, and the Nasdaq Index closed up 62.8 points (0.5%).
Regarding the Federal Reserve's (Federal Reserve) tightening monetary policy, while speculation about pausing interest rate hikes continues to heat up, St. Louis Fed President Bullard, known as a hawk, said on the 22nd, "We should raise interest rates and cut interest rates two more times this year. times 0.25%."
Jamie Dimon, chief executive of JPMorgan Chase & Co., said U.S. interest rates could rise further to 7 percent from the current 5 percent. Right now, the June meeting of the US Federal Open Market Committee (FOMC) is likely to be in focus.
Regarding the debt ceiling issue, President Biden and the Speaker of the US House of Representatives Kevin McCarthy are continuing to negotiate on raising the debt ceiling, but it is still difficult to reach an agreement.
Treasury Secretary Janet Yellen has sent a letter warning that the US is at risk of defaulting as early as 10 days.
Past experience could shake confidence in the US (government bonds) if talks tangled to the last minute of the deadline.
If it leads to a sharp increase in short-term borrowing costs or a downgrade of credit ratings, it may spread to the financial and economic world outside the United States, and private enterprises such as banks will be affected. From financial instability, will be severely affected.
2. Virtual Currency Market
In the encrypted asset (virtual currency) market, bitcoin rose 1.3 percent from the previous day to $27,020.
There has also been some solid price action against the bears who expect a sharp decline against the backdrop of technical weakness, such as lower highs. Ethereum (ETH), the second largest market capitalization, also rebounded 1.95% from the previous trading day, and is in a stalemate.
With the decline in interest of market participants, the weekly trading volume of BTC and ETH has hit a record low since September 2019, and the thin trading volume continues.
According to the latest weekly report of the asset management company CoinShares, the capital flow of institutional investors in cryptocurrency investment products has seen a net outflow of 32 million US dollars for the fifth consecutive week.
** Weekly trading volume on major exchanges fell to $20 billion, the lowest level since late 2020. **
That's in stark contrast to Tokyo's stock market, where safe-haven funds from foreign investors are flowing into Tokyo amid fears of credit crunch risks such as bank instability in the wake of the coronavirus crisis.
According to data from Japan Exchange Group (JPX), overseas investors have net bought Japanese stocks for seven consecutive weeks, with a cumulative net purchase of 3 trillion yen. The Nikkei 225 index reached the highest level in 33 years since the bubble economy.
Bloomberg Intelligence strategist Mike McGlone is among the bearish forecasters amid drying up liquidity in the cryptocurrency market and rising interest rates. Amid a further deterioration in the macro environment, he expressed a pessimistic view that the price level in 2019 (1 BTC = $7,000), which was the starting point of the previous bull market, may decline.
III. DCG Fails to Repay Its Possible Debt
Bankrupt and insolvent lender Genesis Global Capital had debt due as of last week, according to a statement from cryptocurrency exchange Gemini.
Genesis has lost more than $35 billion to multiple creditors, hit by the default of venture capital firm Three Arrows Capital (3AC), which went bankrupt last year, and the collapse of major cryptocurrency exchange FTX, according to court documents.
**Gemini and the Unsecured Credit Committee are considering a moratorium, but if Digital Currency Group is found to be in effective default, it will become more difficult to raise funds due to declining credit and there are concerns of bankruptcy risk. **
If DCG, the leading conglomerate in the crypto asset (virtual currency) industry, goes bankrupt, it will face the sale of assets such as the investment trust "GBTC" of the affiliated company Grayscale as part of the debt consolidation, which will have a wide-ranging impact on the market. It may lead to the forced sale of assets such as Grayscale's investment trust "GBTC", which will trigger a large-scale sell-off, which may have a huge impact on the entire encrypted asset market.
In addition, DCG also owns well-known cryptocurrency-related companies such as CoinDesk, CoinMarketCap, and Grayscale, and the future of these companies will also be affected. If DCG goes bankrupt, the confidence and stability of the entire cryptocurrency industry will also suffer. Therefore, the risk of DCG’s bankruptcy is not only affecting the company itself, but may also have a ripple effect on the entire cryptocurrency market.
View Original
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Crypto markets are thinnest since September 2019
Author: Sister Shen
1. Macroeconomics and Financial Markets
On May 22, the New York stock market in the United States, the Dow Jones Industrial Average fell by US$140 (0.42%) from the previous trading day, and the Nasdaq Index closed up 62.8 points (0.5%).
Regarding the Federal Reserve's (Federal Reserve) tightening monetary policy, while speculation about pausing interest rate hikes continues to heat up, St. Louis Fed President Bullard, known as a hawk, said on the 22nd, "We should raise interest rates and cut interest rates two more times this year. times 0.25%."
Jamie Dimon, chief executive of JPMorgan Chase & Co., said U.S. interest rates could rise further to 7 percent from the current 5 percent. Right now, the June meeting of the US Federal Open Market Committee (FOMC) is likely to be in focus.
Regarding the debt ceiling issue, President Biden and the Speaker of the US House of Representatives Kevin McCarthy are continuing to negotiate on raising the debt ceiling, but it is still difficult to reach an agreement.
Treasury Secretary Janet Yellen has sent a letter warning that the US is at risk of defaulting as early as 10 days.
Past experience could shake confidence in the US (government bonds) if talks tangled to the last minute of the deadline.
If it leads to a sharp increase in short-term borrowing costs or a downgrade of credit ratings, it may spread to the financial and economic world outside the United States, and private enterprises such as banks will be affected. From financial instability, will be severely affected.
2. Virtual Currency Market
In the encrypted asset (virtual currency) market, bitcoin rose 1.3 percent from the previous day to $27,020.
There has also been some solid price action against the bears who expect a sharp decline against the backdrop of technical weakness, such as lower highs. Ethereum (ETH), the second largest market capitalization, also rebounded 1.95% from the previous trading day, and is in a stalemate.
With the decline in interest of market participants, the weekly trading volume of BTC and ETH has hit a record low since September 2019, and the thin trading volume continues.
According to the latest weekly report of the asset management company CoinShares, the capital flow of institutional investors in cryptocurrency investment products has seen a net outflow of 32 million US dollars for the fifth consecutive week.
** Weekly trading volume on major exchanges fell to $20 billion, the lowest level since late 2020. **
That's in stark contrast to Tokyo's stock market, where safe-haven funds from foreign investors are flowing into Tokyo amid fears of credit crunch risks such as bank instability in the wake of the coronavirus crisis.
According to data from Japan Exchange Group (JPX), overseas investors have net bought Japanese stocks for seven consecutive weeks, with a cumulative net purchase of 3 trillion yen. The Nikkei 225 index reached the highest level in 33 years since the bubble economy.
Bloomberg Intelligence strategist Mike McGlone is among the bearish forecasters amid drying up liquidity in the cryptocurrency market and rising interest rates. Amid a further deterioration in the macro environment, he expressed a pessimistic view that the price level in 2019 (1 BTC = $7,000), which was the starting point of the previous bull market, may decline.
III. DCG Fails to Repay Its Possible Debt
Bankrupt and insolvent lender Genesis Global Capital had debt due as of last week, according to a statement from cryptocurrency exchange Gemini.
Genesis has lost more than $35 billion to multiple creditors, hit by the default of venture capital firm Three Arrows Capital (3AC), which went bankrupt last year, and the collapse of major cryptocurrency exchange FTX, according to court documents.
**Gemini and the Unsecured Credit Committee are considering a moratorium, but if Digital Currency Group is found to be in effective default, it will become more difficult to raise funds due to declining credit and there are concerns of bankruptcy risk. **
If DCG, the leading conglomerate in the crypto asset (virtual currency) industry, goes bankrupt, it will face the sale of assets such as the investment trust "GBTC" of the affiliated company Grayscale as part of the debt consolidation, which will have a wide-ranging impact on the market. It may lead to the forced sale of assets such as Grayscale's investment trust "GBTC", which will trigger a large-scale sell-off, which may have a huge impact on the entire encrypted asset market.
In addition, DCG also owns well-known cryptocurrency-related companies such as CoinDesk, CoinMarketCap, and Grayscale, and the future of these companies will also be affected. If DCG goes bankrupt, the confidence and stability of the entire cryptocurrency industry will also suffer. Therefore, the risk of DCG’s bankruptcy is not only affecting the company itself, but may also have a ripple effect on the entire cryptocurrency market.