3/18 (Sat) morning market trends (compared to the previous day)
- Bitcoin: $27,733 +10.8%
- Ethereum: $1,787 +6.8%
- NY Dow: $31,861 -1.1%
- Nasdaq: $11,630 -0.7%
- Nikkei Stock Average: ¥27,333 +1.1%
- USD/JPY: 131.8 -1.4%
- USD Index: 103.8 -0.5%
- 10-year US Treasury yield: 3.4 +1.2% per annum
- Gold Futures: $1,993 +3.6%
The New York Dow fell sharply today, closing at $384. Other indexes, including the Nasdaq, also fell across the board. Investor sentiment deteriorated again, and the stock market fell back, led by financial stocks.
SVB Financial Group filed for bankruptcy
Last night, SVB Financial Group, the parent company of the failed Silicon Valley Bank (SVB), revealed it had filed for Chapter 11 bankruptcy protection in New York. Silicon Valley Bank was taken under the control of the FDIC last week and is now part of the Federal Reserve, making it exempt from bankruptcy law.
First Republic Bank
Second-tier bank First Republic Bank is reportedly in talks to issue new shares and raise money from other banks or private equity firms to boost its finances.
The day before, US medium-sized bank First Republic, which was facing growing concerns about the chain reaction from the bankruptcy of US SVB Bank and Signature Bank, announced that it would seek financial stability by the US government’s arbitration. The agreement by 11 major banks, including Japan, to implement $30 billion (about ¥4 trillion) in deposits gave the market a sense of relief, but concerns about the banking system as a whole seem to persist.
connection: U.S. stocks/NY Dow rebound Recession of concerns about financial risks | Financial Tankan on the 17th
Monetary easing in disguise?
Following the bankruptcies of Silicon Valley Bank and Signature Bank, the amount of funds used by the US Federal Reserve Board (FRB) for financial institutions, which has been implementing emergency loan measures since last weekend, has reached a record high. This was revealed in the Federal Reserve Bank lending statistics released on the 16th.
The Fed’s discount window lending service to banks totaled $152.9 billion in the week ending March 15, surpassing the $112 billion recorded during the 2008 financial crisis. In addition, the Fed’s new Bank Term Funding Program (BTFP) accounted for $11.9 billion in spending. BTFP is a system that evaluates eligible collateral such as US Treasuries and mortgage-backed securities at face value and lends them for a maximum of one year. measures.
Analysts at JPMorgan Chase & Co. said Wednesday that the maximum amount of liquidity that could ultimately be injected into the financial system through the Bank Term Funding Program (BTFP) is $2 trillion. expected to reach
Arthur Hayes, former CEO of crypto derivatives exchange BitMEX, has described the Fed’s massive lending measures as “penetration in disguise”, which could have a significant positive impact on Bitcoin’s performance. I spread my argument.
“Kaiseki” is an essay about how the #banktermfundingprogram is Yield Curve Control by another name. Get ready for infinite money printing and $BTC $1 million. https://t.co/nQ5G2dlg1G pic.twitter.com/R5ZkoI0OUC
—Arthur Hayes (@CryptoHayes) March 16, 2023
U.S. Treasury Secretary’s Public Hearing Remarks
U.S. Treasury Secretary Janet Yellen testified before the Senate Finance Committee on the 16th that the protection of all depositors at Silicon Valley Banks and Signature Banks was an exceptional measure to prevent the risk of bank failures.
Yellen stressed that the banking system is still healthy, but some members of the Senate Finance Committee are concerned that deposits are flowing from midsize banks to big banks, accelerating their market monopoly. bottom.
In response to a lawmaker’s question, “The bank failures have highlighted how fragile the economy is, but do you still think that raising interest rates is good for society?” It is an economic issue and it is extremely important for the Fed to deal with it.”
The interest rate futures market is pricing in a rate hike of 0.25% at next week’s FOMC meeting by about 60%.
Economic indicators from this week onwards (Japan time)
- March 23, 3:00 (Thursday): US Federal Open Market Committee (FOMC) interest rate announcement, chairman’s regular press conference
- March 30, 21:30 (Thursday): U.S. October-December Quarterly Real Gross Domestic Product (GDP, Final Value) (Quarterly Change Annual Rate)
- March 31, 21:30 (Friday): U.S. February Personal Consumption Expenditure (PCE Core Deflator) (MoM/YoY)
connection: What is the CPI (Consumer Price Index) that attracts attention in the virtual currency market?
U.S. bank stocks tumbled sharply on worries about First Republic’s weakening profitability and SVB Financial Group’s bankruptcy filing. In particular, sales of JPMorgan Chase and Citigroup, which announced their support for First Republic on the 16th, were strong. First Republic -32.8%, JP Morgan -3.7%, Citi -3%, Bank of America -3.9%, Wells Fargo -3.9% (vs. previous day).
IT/tech stocks are mixed. Compared to the previous day for individual stocks, NVIDIA +0.7%, c3.ai +2.2%, Big Bear.ai +7.9%, Tesla -2.1%, Microsoft +1.1%, Alphabet +1.3%, Amazon +1%, Apple -0.5% , meta-4.5%.
connection: Stock investment recommended for virtual currency investors, representative virtual currency stocks of Japan and the United States “10 selections”
Cryptocurrency/Blockchain-related Stocks (Year-on-Year Change/Year-to-Week Change)
- Coinbase｜$74.9 (+10%/+40%)
- MicroStrategy | $267.6 (+11%/+39%)
- Marathon Digital Holdings｜$8.1 (+7%/+53%)
Virtual currency-related stocks continue to rise as bitcoin continues to rise.
Bitcoin Reaches $270 Million, Gold Rises
Bitcoin (BTC) continued to rise in response to the acceleration of bank credit risk, returning to the $270 million level for the first time in nine months since June last year. Since the birth of bitcoin was triggered by the financial crisis of 2008, distrust of banks and governments is increasing, so bitcoin with an issuance limit and decentralized finance that does not require government bailout are showing their true potential. It is said to be a place of practice.
Stacks (STX), which is Layer 2 of Bitcoin, and DeFi stocks based on Stacks are also rising. STX+29%, ALEX+31%, DIKO+18.9%, etc.
connection: Why did the Japanese government start promoting “Web3 policy”?Summary of important points and related news
The dollar-yen exchange rate is 131.8 yen per dollar, down 1.4% from the previous day. Investor sentiment worsened by SVB Financial Group’s bankruptcy filing, the Credit Suisse scandal, and the First Republic stock market crash seems to have accelerated dollar selling.
Also in the US bond market, the 10-year bond yield fell 16.8bp to 3.416% (price increase), and the 2-year bond fell below 4% again.
Gold futures continue to rise +3.6% as investors become more averse to investment risk. Silver (silver) also rose +4.8% from the previous day.
In addition, it seems that new demand has emerged in the diamond market, which has been tokenized as a safe haven for assets.
connection: Interest in Tokenized Diamonds Increases Amid U.S. Bank Troubles
connection: Commentary on the relationship between government bonds and interest rates, and the impact on the cryptocurrency market
GM radio of the week
GM Radio was held yesterday. We invited Evan Cheng, co-founder and CEO of Mysten Labs, the developer of the L1 blockchain “Sui”, to talk about the progress of Sui’s development and the merits of the MOVE language.
Click here for last week’s radio archive.
— CoinPost Global (We’re hiring!) (@CoinPost_Global) March 9, 2023
— CoinPost Global (We’re hiring!) (@CoinPost_Global) March 8, 2023