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  • Writer's pictureVimal Gor

18th April 2023 - Weekly Market Commentary

Updated: Feb 15

Macro Overview

  • The MSCI world equity index went up 1.31% for the week and is up a similar amount for April. Three of the largest US banks (JPM, Citi and Wells Fargo) kicked off quarterly earnings season by beating expectations Friday. Equity indices are now back toward their highs of the last year’s range.

  • US yields went up 10bps across the curve and the US rates market is pricing in another 25bp hike at the May FOMC meeting. Last week’s CPI, PPI and other economic indicators were in line with forecasts and toward a moderating inflation path.

  • Since the mid-March banking crisis and the dramatic drop in US yields, markets have stabilised and implied volatilities have dropped to yearly lows in Equity and FX, and declined to pre-March levels in US rates. The below charts show multi-asset class implied volatility over the last year.

  • Earnings reports begin in full this week and will be a crucial data piece in showing how tightening credit conditions are affecting corporates and how they are influencing expectations through the end of year.

Digital Asset Overview

  • The total crypto market cap (as calculated by TradingView) finished the week higher, up 8.1% with Ethereum and other Altcoins leading the market following previous weeks of Bitcoin outperformance.

  • ETH surged 14.0% and gained 6.6% against BTC following the successful implementation of staking withdrawals via the network’s “Shapella” upgrade.

  • The market has largely shrugged off the newly enable ETH staking withdrawals, with mostly rewards (not the 32 ETH principal) withdrawn since the upgrades. The below chart shows the breakdown of redemptions between principal (red) and rewards (grey).

  • The majority (over 65%) of the staked ETH redeemed following the upgrades was from crypto exchange Kraken. This was not a surprise to the market as the exchange was required to redeem US staking offerings as part of its recent settlement with the SEC.

  • Coinbase also saw around 35k cbETH redeemed to ETH following the upgrades, however liquid staking protocol Lido, which accounts for 31% of the total ETH staked, will not enable withdrawals until May.

  • As covered previously, Trovio believes the enabling of withdrawals “de-risks” Ethereum staking and may pave the way for further institutional adoption.

Key Digital Asset Articles

  • London Stock Exchange's LCH SA to Clear Bitcoin Futures and Options on GFO-X Through New Service (

  • 2023 State of Crypto Report: Introducing the State of Crypto Index (a16z)

  • Twitter partners with eToro to let users trade stocks, crypto as Musk pushes app into finance (CNBC)

  • Bankrupt crypto exchange FTX has recovered $7.3 billion in assets (Reuters)

  • The ‘crypto winter’ didn’t slow down Aussie investors. Here’s the next step (SMH)

  • MicroStrategy’s Bitcoin Bet Is Profitable Again After Price Surge (Bloomberg)

  • BIS prefers tokenized deposits over stablecoins for private digital currency (Ledger Insights)

  • Hong Kong officials reiterate commitment to cryptocurrency, DeFi regulation at Web3 Festival (SCMP)

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