A highlight from MARKETS DAILY: Crypto Update | Championing Crypto Causes and the Latest DeFi Breach With Host Noelle Acheson
This episode of Markets Daily is sponsored by Kraken. It's Wednesday, September 20th, 2023, and this is Markets Daily from Coindesk. My name is Noelle Acheson, Coindesk collaborator and author of The Crypto's Macro Now newsletter on Substack. On today's show, we're talking about crypto activism and another DeFi hack. And just a reminder, Coindesk is a new source and does not provide investment advice. Now, a markets roundup. Crypto assets were mixed today. At 10 a .m. Eastern time, Bitcoin was up almost eight -tenths of a percent over the past 24 hours, trading at $27 ,164. Ether, on the other hand, was down four -tenths of trading at $1 ,631. Ether's underperformance could be a market reaction to a series of reports from blockchain sleuths of large transfers of the asset to exchanges. While it is hard to know exactly what is behind on -chain movements, the reports could be enough to spook some investors into getting out ahead of what might be potential sell pressure. Meanwhile, Bitcoin trading volume continues to fall. A report from K33 Research published yesterday shows that Bitcoin spot volumes dropped a further 8 % over the past seven days. This has been driven largely by sharp declines in activity on Binance, the world's largest crypto exchange in terms of trading volume. The seven -day spot volume average on Binance is down 57 % since the beginning of the month. Most other exchanges are flat over the same period, with Coinbase registering a 9 % increase. It remains to be seen where the volumes leaving Binance will end up, if anywhere. Much of the drop could be from more liquidity providers leaving the platform in the face of intensifying legal pressure on the exchange from US regulators. This is likely to have a further dampening effect on liquidity, which could further delay the entrance of large investors. Institutions generally need a certain amount of liquidity to be assured that their orders won't unduly distort the market, and that they could exit easily if necessary. In traditional markets, US stocks are heading up this morning as traders brace for the FOMC rates decision later today. The S &P 500 was up over 0 .3%, the Nasdaq up 0 .2%, and the Dow Jones up almost 0 .5%. While the market is pricing at a pause, attention is now focusing on the likelihood of another hike before the end of the year. CME futures show odds swinging in favour of no more hikes this year, implying that the peak is already in. This would be good news for stocks which are already looking ahead to the likely timing of rate cuts. The bond market, however, is signalling that it expects US rates to be higher for longer. This morning, the yield on the 10 -year US Treasury reached its highest point since 2007. The updated FOMC summary of economic projections due to be published today should shed some light on the Fed's expectations for rate cuts next year. In Europe, the FTSE 100 jumped this morning on news that UK inflation came in lower than expected. The year -on -year increase for August was 6 .7%, notably better than the consensus forecast of 7%, and the lowest level in 18 months. Tomorrow, we hear from the Bank of England as to the outlook for UK interest rates. Odds for another hike tomorrow have dropped to below 60 % after being an almost sure thing just a few days ago. Earlier this morning, the FTSE 100 and the German DAX index were up almost 0 .09%, while the Euro stock 600 was up just over 1%. In Asia, Japan's Nikkei index was down almost 0 .07%, as data out earlier today showed the country's exports dropping for the second consecutive month. In China, the Shanghai Composite fell more than 0 .5 % after Chinese banks left their benchmark loan prime rates unchanged in line with the central bank's oil prices finally seem to be taking a breather, with the Brent crude benchmark down almost 1 .5 % over the past 24 hours, trading at $94 a barrel. This comes as Goldman Sachs raised its forecast for crude to $100 a barrel, citing strong consumption coupled with production cuts. Gold saw a sharp bounce this morning, with the price jumping over 0 .5 % in half an hour, trading as high as $1 ,943 per ounce. This has led to speculation of a large buyer entering the market. It could also be a reaction to a decline today in the DXY dollar index. Stay tuned. After the break, we'll take a look at investor trust in DeFi platforms and efforts to mobilize crypto Meet voters. the all new Kraken Pro, the powerful, customizable, beautiful way to trade crypto. It's Kraken's most powerful trading platform ever, packed with trading features like advanced order management and analytics tools, all in a redesigned modular trading interface. So head to pro .kraken .com and trade like a pro. Welcome back. In this section, we're going to look at crypto activism. But first, another DeFi attack hits crypto. This morning, decentralized trading protocol Balancer said that its web front end was suffering from an exploit and urged users not to interact with the website. According to data platform DeFi Llama, Balancer has a total value locked of about $700 million, making it the fourth largest decentralized exchange. The attack comes roughly a month after Balancer warned the public about an unrelated vulnerability in the protocol's pools. On -chain data show that, so far, over 200 ,000 has been stolen in this exploit. This is not a large amount by crypto hack standards, but it is significant in that it could further weaken investor trust in DeFi platforms. Crypto exploits have caused losses of over $1 billion so far this year, according to blockchain security firm Certik. Recent hacks have highlighted that there are many potential vectors of vulnerability. It's not just the core application code. This further complicates DeFi utility for investors looking for yield, especially given the high yield available now in traditional markets with much lower risk. On a more uplifting note, Coinbase is rallying grassroots activism. Yesterday, the crypto exchange published a blog post urging crypto's 52 million users, according to the company, to call their congressman. The company's Stand with Crypto Alliance will be organizing events across nine states. Coinbase is also launching a paid media campaign that aims to show how powerful the crypto lobby can be. On December 27th, Stand with Crypto Day will convene entrepreneurs and developers from around the country in Washington DC to meet with government officials. And the platform has also launched an app to make it super easy for users to reach the right people in Congress. This could have an impact. After all, if only 10 % of the reported 52 million users make a call, that's a lot of collective phone time. It should also send a strong signal that crypto users have political opinions and that pro -innovation candidates are likely to win their support as the US elections approach. That's it for today's show. You can reach us at podcasts at coindesk .com. Do also please send us questions you'd like us to address on the Spotify Q &A. Follow us and if you like the show, please leave us a five star rating on whatever platform you're listening to us on. Markets Daily is produced and edited by Michelle Musso with executive production by Jared Schwartz. I'm Noa Latcheson for Coindesk. We're back tomorrow with more market news and insight.