Bullish Insights – Weekly Market Recap

The Bullish Insights Weekly Market Recap includes curated industry news and analysis from the Bullish team for the week of October 31, 2022.

Bullish Exchange

This week’s peak trade volume (24h): November 3, 2022, $782,543,151 (38,452 BTC)

Crypto market highlights

• Stablecoin deposits on Aave, Compound, and Curve that were once earning yields upwards of 2% have since plummeted to below 1.5%. US 10-year Treasury yields on the other hand have been rising nearing 4%.
• Last week, digital asset investment total flows saw $6.1mn worth of inflows. Bitcoin saw the majority of inflows at $13.4mn while Ethereum saw outflows of $2.1mn. Short Bitcoin saw outflows of $2.4mn, while other assets like Ripple, Solana, and Binance saw flows of +$0.5mn, -$0.1mn and -$0.2mn respectively.
• Bitcoin miner revenue has seen a 7.2% increase in the month of October to $589.9mn. The month of September also marked the worst month for miners in terms of revenue since November 2020.
• Layer-2 scaling protocol Arbitrum which focuses on rollups on the Ethereum network has seen a significant acceleration in weekly transactions as well as active users. The transaction count of the week ending October 24, reached over 4mn on the network versus July figures which were less than half of that. Since October 10, the protocol has also seen a 125% growth in active users and in the week ending of October 24, Arbitrum saw that figure reach an all-time high of 282,000. The increase in activity coincides with trader speculation of an airdrop for its native token.
• A chart by CryptoCompare measuring the 30-day annualized volatility across Bitcoin, Ethereum, Cardano, and Solana, revealed that volatility in these layer-1 chains has fallen to low-points year-to-date in the month of October. On October 22, Bitcoin and Ethereum's volatility reached a YTD low of 26.8% and 31.9% respectively. The dip in volatility coincides with negative price action across the crypto market along with a decline in hype of the asset class.

Macro market highlights

• A strong rebound in US equity markets during last Friday's trading session with the S&P 500 up by 2.5%, the Dow rose by 2.6% and the Nasdaq Composite advanced by 2.9%.
• US equity markets slid in Monday's trading session as the market prepares for the Fed's rate decision on Wednesday this week. The S&P 500 was down by 0.8%, the Dow dipped by 0.4%, and the Nasdaq Composite retreated by 1.0%.
• US equity markets closed lower in Tuesday's trading session, as US employers added ~196,000 workers to payrolls in October, increasing concerns of the Fed's willingness to tighten further. The S&P 500 was down by 0.4%, the Dow, dipped by 0.2% and the Nasdaq Composite retreated by 0.9%.
• US equity markets saw a sharp sell-off in Wednesday's trading session after the Fed announced a 75bps rate hike, maintaining a dovish tone. Powell maintained that the Fed still had "some ways to go" in its tightening campaign and that it would be premature to think about pivoting now. The S&P 500 was down by 2.5%, the Dow dipped by 1.6%, and the Nasdaq Composite retreated by 3.4%.
• US equity markets saw another tumble in Thursday's close with the S&P 500 down by 1.1%, the Dow dipped by 0.5%, and the Nasdaq Composite retreated by 1.7%. The yield on 10-year Treasuries advanced four basis points to 4.14% reaching a four-decade extreme in treasury-yield curve inversion.

Other updates

• Major derivatives exchange Deribit has suspended withdrawals after it tweeted that its hot wallet suffered a $28mn hack. The hack occurred before UTC midnight November 1.
• In Robinhood’s 3Q2022 earnings report, the firm noted a 12% dip in its crypto revenue as well as a 12%QoQ fall in Monthly Active Users (MAU). Despite this, a conference call with Vladimir Tenev, CEO of Robinhood revealed that the company intends to support the expansion of its Robinhood Wallet to international retail customers soon. (Source: COINTELEGRAPH) 
• Binance launched its own cryptocurrency index dubbed Bluebird Index that tracks the performance on BNB, DOGE, and MASK. At the time of writing, $MASK saw a ~40% rally in the past 24h. (Source: Binance)
• Circle commenced its movement of USDC reserves into a SEC registered fund, the Circle Reserve Fund, managed by BlackRock Advisors. The fund is a government money market fund that was registered back in May 2022. (Source: Coindesk)
• In partnership with CoinMetrics and the MSCI, Goldman Sachs announces a new data service, called Datanomy, aimed at sector classification of cryptocurrencies. The new classification system will break down tokens into classes, sectors and subsectors. (Source: CNBC)

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