Bitfinex Alpha | Bearish Sentiment Sweeps Market, But Tether Shines Feb 13, 2023 in Bitfinex Alpha
The worry of inflation is not going to beat the love this Valentine. The survey results show that Americans expect to spend a lot on Valentine’s Day, despite the fact that prices will be very bad during this week. According to the National Retail Federation, Valentine’s Day sales are expected to reach nearly $26 billion in 2023, the largest ever. We’ll be keeping a close eye on spending patterns this week, and let February 14th serve as an indicator of the US consumer’s resilience as they navigate higher prices, shrinking savings and higher credit card interest rates.
In fact, a reduction in inflation expectations appears to have not only boosted consumers’ willingness to spend on special occasions, but also increased the RSM financial condition index, which measures the risk involved in financial asset values across the board. is a comprehensive measure of level. Money, bonds and the stock market.
However, this market sentiment is clearly at odds with those who are more visible to the real economy: corporate treasurers. Corporate debt issuance is declining, with corporate treasurers clearly spooked by last year’s series of jumbo rate hikes.
On the face of it, consumers seem to be in the positive camp, with expectations of easing inflation and a strong labor market, according to the University of Michigan consumer survey, which climbed to a 13-month high for January. , But look deeper, and levels of positive sentiment are still well below pre-pandemic levels. The uncertain long-term economic picture has many consumers still worried about the future, and this is reflected in declines in consumer expectations for the economy over one-year and five-year time horizons.
And while the job market looks resilient, there’s no escaping the big headlines of job losses. Big tech companies that flourished during the bull market are now reining in their spending. Microsoft reported last week that it laid off its Industrial Metaverse team. The company said it would make changes that would reduce its workforce by 10,000 jobs.
Meanwhile, bitcoin felt its first on-chain losses in two weeks, erased by profit-taking from early buyers and selling pressure from leveraged longs. However, BTC net-weighted derivatives funding rates remain bullish despite the pullback.
Crypto companies are now finding their way through the evolving regulatory landscape as some seek to rise again after falling in price last year. Genesis and its parent company DCG eventually reached a settlement with creditors. Meanwhile, Kraken agreed to pay a $30 million penalty to settle the SEC charges.
Investors who see their crypto assets falling in 2022 due to the FTX collapse, however, are still wary, and this week Binance announced that it has temporarily suspended US dollar deposits and withdrawals through bank accounts. .
On a more positive note on the industry, however, Tether showed a profit of $700 million for the fourth quarter of 2022, despite the downturn. This news isolated the bad actors in the industry and proved the resilience of those who survived the bear market and black swan events of 2022. As news emerges, the SEC may now turn its attention to Paxos, the company that issued the BSD stablecoin. , and initiating legal action there, Tether has seen significant inflows, as it further solidifies its position as the leading stablecoin.
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