Coinbase Institutional Market Call

We explore why bitcoin has outperformed ether and many altcoins recently in the context of the current macro environment and the most likely path for the Federal Reserve. Meanwhile, our institutional team discusses the implications for markets from recent regulatory actions. Plus, the long-anticipated ARB airdrop has brought a lot of excitement to the Arbitrum (layer-2) ecosystem, but how should users think about its value going forward? Finally, on DeFi, we saw the launch of zkSync Era to general users and Polygon’s zkEVM mainnet beta go live with both networks seeing an increase in transactions. Tune in for an in-depth analysis on all of this and more and their potential impact on institutional investors.

This week, our institutional team discusses the news from UBS & CS and the continued weakness in certain regional banks despite significant support. They also explore the outperformance of crypto, the upcoming Fed meeting, and the differences between the new BTFP facility and QE. Additionally, they discuss the latest updates on DeFi including an update on the Euler hack, the Uniswap V4 delay, the Arbitrum airdrop and where that is trading. Lastly, they cover flows on the exchange and the recent increasing dominance of BTC. Tune in for an in-depth analysis on all of this and more and their potential impact on institutional investors.

It’s been a busy week and while Bitcoin is up sharply, it has traded in a 35% range, wide even by Bitcoin’s standards. Georg and Greg saw flows that they never thought they’d encounter and Sid talks through how DeFi protocols had their fundamental principles questioned. We talk about what’s next and how we in crypto can rely less on the frailties of a legacy banking system. On CPI, David runs us through what this means to markets and what he’s looking out for in next week’s FOMC. Most importantly, what does the Fed think about the financial stresses of last weekend? Finally, Sid runs us through the potential bear case for ETH ahead of the Shanghai (+Capella) upgrade and the supply that may hit the market.

In a relatively quiet market since the move down on March 3, we discuss perp funding rates turning negative ahead of the Mt Gox unlock and what we’re seeing on the trading and financing teams ahead of this. David shares key insights from his Asia client trip in the context of easing crypto regulations in HK and takes us through the upcoming macro events. Sid provides an update on the controversial Maker governance proposal.

The institutional trading team runs through the launch of Base and what they’re excited for in the coming months. Lido staking nears 75% with some very large transactions this week. The question of blockchain immutability is challenged in a court of law. The team also runs through their latest macro thoughts, the varied flows that they’re seeing on the desk and the re-orientation of stable coins as BUSD market share reduces by 33% over the last month.

This week the team talks through how well crypto has held up in the face of higher rate expectations, possibly buoyed by flows from the Far East. They also cover Blur’s launch and incentive programs which helped it 4X OpenSea’s volumes last week and push them into a platform fee holiday. Lastly, the team provides an update on Ordinals and talks through the potential for L2s on Bitcoin.

Following the January inflation print, our institutional trading and research teams talk about the current state of crypto markets, the macro landscape, Bitcoin ordinals, and the Sepoelia testnet on February 28.

A less hawkish Fed spurred the risk rally to continue last week, but recent economic data has created confusion among investors. Powell speaks to the Economic Club of Washington on Tuesday. Plus, our trading desk and research teams talk about digital artifacts on bitcoin, a controversial proposal on Uniswap, and recent market inflows.

This is a big macro week for markets with the Federal Reserve, ECB, Bank of England, and US payrolls data on tap. Ahead of those events, our trading and research team discuss the factors moving prices, the slope of the rates curve, and where the surprise might be to markets.

This week the team discusses the positive market performance despite Genesis filing for Chapter 11 and take a closer look at BTC & ETH futures. They also review the macro situation, looking ahead to the Fed meeting on January 31/February 1 and the US debt ceiling. Lastly, they review the Electric Capital report on developer activity in 2022 as well as recent news on Uniswap and Ethereum.