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Introducing Most Influential 2023
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This episode was hosted by Noelle Acheson. “Markets Daily” is executive produced by Jared Schwartz and produced and edited by Eleanor Pahl. All original music by Doc Blust and Colin Mealey.
Audio Transcript: This transcript has not been edited and may contain errors.
It’s Tuesday, December 5th, 2023 and this is Markets Daily from CoinDesk. My name is Noelle Acheson, CoinDesk collaborator and author of the Crypto is Macro Now newsletter on Substack. On today’s show we’re talking about market moves, crypto influencers, Federal Reserve projections and more. So you don’t miss an episode, be sure to follow the podcast on your platform of choice, and turn on notifications. And just a reminder, CoinDesk is a news source and does not provide investment advice.
Now, a markets roundup.
Crypto markets seem to be holding within a new range after the weekend’s astonishing climb. Yesterday, the bitcoin price climbed to above $42,000, then it pulled back, then it climbed again and is now hovering not far from its year-to-date high. According to CoinDesk Indices, at 9 a.m. Eastern time today, bitcoin was trading up almost two tenths of a percent over the past 24 hours, at 41,826 dollars. Ether was down 1.8%, trading at 2,200 dollars.
One significant indicator of crypto market sentiment worth keeping an eye on is the market cap of key stablecoins. The largest in the market by far is Tether’s USDT stablecoin – this is also the main trading pair for most crypto assets, including bitcoin and ether. Over the past month, roughly 4 billion dollars has flowed into USDT. That’s an increase of almost 5%, and suggests that traders are getting ready to get more involved in crypto markets.
In macro matters, I want to point out something strange going on with U.S. rates expectations. Last week we heard several Federal Reserve officials, including Fed Chair Jerome Powell, push back on the idea that rates might be heading down soon. But markets weren’t buying it, and rallied on the back of the prospect of lower rates within the next few months. I talked a bit about this in yesterday’s episode, if you want to go back and give that a listen.
Well, yesterday both U.S. stocks and treasuries dropped as traders started to think maybe they were overdoing the rates expectations a bit. But bond futures went the other direction, pricing in an even higher likelihood of rate cuts by the end of March – it’s now over 60%, with a more than 40% probability of TWO rate cuts by June.
And get this, the futures market is now pricing in a more than 70% probability of FIVE rate cuts by the end of 2024. Meanwhile, the Federal Reserve's official projections of the federal funds rate for the end of 2024 suggests there will be only one. By now, we’re used to the market not believing the Federal Reserve. But this level of disconnect feels extreme.
To be fair, the Federal Reserve’s projection of the fed funds rate for the end of 2023 is too high. The latest official forecasts released in September have U.S. interest rates ending this year at 5.6%, higher than the current 5.3%. But another hike at next week’s FOMC meeting, the final one for the year, is pretty much off the table going by recent comments from central bank representatives.
We get new official forecasts next week, including a presumably revised expected level of interest rates for the end of 2024. But it’s very unlikely we see the Fed coming around to the market’s view. Whether we do or not, it might not matter, since the market recently seems to hear from Fed officials what it wants to hear, and disregards the rest.
But, sentiment can turn quickly, as we have seen. So far this morning, bond prices are climbing again, which is bringing down yields – earlier today, the U.S. 10-year yield was back down to 4.2%, close to its lowest level since early September.
In stocks, U.S. indices were down yesterday, with the S&P dropping half a percent, the Nasdaq losing eight tenths and the Dow Jones falling one tenth. Futures today are pointing to continued losses.
In Europe, the main indices were largely flat yesterday, and so far today are mixed, with the FTSE 100 down six tenths, the German DAX up four tenths and the broader Eurostoxx 600 up one tenth.
Asian stocks fell again in today’s trading. Japan’s Nikkei index was down 1.4%, the Shanghai Composite lost 1.7%, and the Hang Seng dropped 1.9%, reaching a new low for the year.
In commodities, oil prices continue to head down despite Saudi Arabia insistence that the announced OPEC+ production cuts would be honored in full and could be extended well into next year. Earlier today, the Brent crude benchmark was down three tenths of a percent on the day, trading at $78 dollars and 10 cents a barrel.
After retracing from its all-time high yesterday, gold is holding steady this morning, trading at 2,030 dollars per ounce.
Stay with us – after the break we’re going to take a brief look at a project that CoinDesk has been working on for months, and that is sure to generate some debate.
Welcome back!
Today I want to highlight the CoinDesk Most Influential list – this is a list of the 50 characters that CoinDesk believes have most contributed to the evolution of the crypto industry over the past year.
These are not necessarily heroes – some of them are people who have actively conspired to hurt the crypto industry, or who through arrogance or ignorance have hurt its reputation. For instance, SEC Chair Gary Gensler is on the list. I wonder how he feels about that. Also on the list is Caroline Ellison, former CEO of FTX’s Alameda Trading. And, of course, the industry’s arch enemy Senator Elizabeth Warren.
Most on the list are positive forces for the industry, however.
Some are developers that have pushed the envelope on functionality, such as Casey Rodarmor, the creator of Ordinals which brings data inscription and digital collectibles to Bitcoin. Or Ogle, who is attempting to professionalize the business of recovering hacked funds.
Some are crypto industry executives such as Coinbase CEO Brian Armstrong, who spent the market winter navigating regulatory rapids while helming the build-out of new services, products and even a new blockchain. Or Jeremy Allaire, steadfastly advocating for responsible stablecoin regulation.
Some on the list come from legacy finance, such as Franklin Templeton’s CEO Jenny Johnson, Paypal’s crypto lead José Fernandez da Ponte, and BlackRock’s Larry Fink. Also featured are crypto natives with influential voices and tireless stamina, such as Messari’s Ryan Selkis.
There’s a lot to think about in this list. Of course, you’re not going to agree with the whole selection, and of course there are many deserving names that didn’t make it this year. The underlying point of the exercise is for us all to think about what we expect from our industry and its participants, even those who are adjacent rather than directly involved.
We’ll put a link to the full list in the show notes, be sure to check it out, and take a look at the original artwork that CoinDesk commissioned for each entrant. And I’d love to hear which of CoinDesk’s selections you most agree with.
