Market Watch – 3 October 2020

  • Bitcoin has held up in week of flurry negative news 
  • Altcoins Struggle
  • Stablecoins grew almost 10X to $20 billion

Bitcoin has held up in week of negative news while stablecoin continue to gain momentum.

Bitcoin tumbled from $10,900 to about $10,450 in a matter of hours. The drop came after news broke that the US CFTC charged the owners of the large cryptocurrency derivatives exchange BitMEX for illegally operating the platform and anti-money laundering violations.

The ripple effects hit most markets. US President Donald Trump said on Twitter that he and his wife Melania Trump tested positive for COVID-19. Although the price dip this time was not that vigorous, BTC still bottomed beneath $10,400.

The cryptocurrency markets have matured to the extent that negative news no longer provokes wild price swings like they once did in crypto’s early days.

In the following hours, the primary cryptocurrency started its gradual recovery. Bitcoin price accelerated towards $10,500 and even broke above it. As of now, BTC trades at just shy $10,550.

Altcoins Struggle

The altcoins also felt the adverse impact mentioned above with some notable price dips. Ripple has also stayed at a similar level as yesterday and trades above $0.23. However, Polkadot (-2.5%), Chainlink (-1.5%), Crypto.com Coin (-0.5%), and Bitcoin SV (-1.5%) are all in the red from the top 10.

The only exception comes from Binance Coin. BNB has jumped by 2.5% since yesterday and nears $28. 

DFI.Money (YFII) has lost the most value – 10%. Uniswap’s governance token UNI follows (-9%) 

Stablecoins grew almost 10X to $20 billion

Ethereum, the second-largest cryptocurrency by market capitalization, was down Friday trading around $344 and slipping 2% in 24 hours.  

The total market capitalization of stablecoins has grown from $2.6 billion in 2019 to $20 billion by September this year. USDT (Tether) at $16 billion leads the pack with USDC in second at $2.5 billion followed by TUSD with a $507 million market cap.

Traditional markets: 

  • September Disappoints. Last month’s 3.9% decline in the S&P 500 snapped a string of five monthly gains in a row. In September, energy was the weakest sector, with a decline of 14.6%; materials was the strongest, with a 1.1% gain.
  • Back on Track. The major U.S. stock indexes rose 1% to 2%, snapping a string of four consecutive weekly declines. At Friday’s close, the S&P 500 was down 6% from its early September record high, the NASDAQ was down 8%, and the Dow was 4% lower.
  • Coronavirus Relief. The U.S. House of Representatives on Thursday narrowly passed a Democratic bill that proposes a $2.2 trillion coronavirus relief package. However, the bill failed to win backing from House Republicans, and prospects in the Republican-led Senate remained uncertain. 
  • Oil Slipping. A recent modest run-up in crude oil prices stalled, as U.S. crude fell about 8% for the week, trading at around $37 per barrel on Friday. Soft demand for transportation fuels is one of the key factors that has recently weighed on broader oil consumption, putting pressure on prices.
  • 6 month Surge.  The performance of the NASDAQ from April through September was the index’s best two-quarter result since 2000, while the S&P 500’s performance was the best since 2009. The NASDAQ surged 45% over the past six months, while S&P 500 gained more than 26%.
  • Earnings Worries.  With earnings season just around the corner, expectations are low, but not as low as they were a few weeks ago. On average, analysts surveyed by FactSet are expecting third-quarter profits of companies in the S&P 500 to drop by 21% compared with the same period a year earlier. That’s down slightly from the 22% decline that had been forecast in early September. 

Philip Tam

Co-founder & CEO

Sources/Reference

OSL, coindesk, CoinMarketCap, Coincodex, Cointelegraph

John Hancock Investment, Bloomberg

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