Coinsquare Market commentary March 9th 2023

Market Commentary – February 2nd, 2023


At the time of writing, Bitcoin is trading at $23,800 USD and Ethereum at $1,676 USD. Cryptocurrencies were having a relatively quiet week up until the Federal Reserve meeting yesterday. The price of BTC was having a bit of trouble at around the $24,000 level after finding sellers twice there. However, the price is also not falling and is merely consolidating just under the $24,000 level after the Fed raised rates by only 25bps (more on that in the Macro section).

ETH also had a relatively quiet week coiling between a 3% range but was able to break out to new 2023 highs after yesterday’s Fed meeting. While both leading cryptos have not yet managed to break significantly higher at the time of writing, it has to be noted that buyers kept their prices supported as every small dip has been bought back in earnest. This shows that there is strong underlying demand for these cryptos even after having risen by more than 40% over January. 
It also seems that institutional participation in BTC is picking up. Market experts would not deny that an institutional-led upswing in price has traditionally had more longevity as compared with retail investor-led rallies. The good news regarding the recent BTC price rally is that data is suggesting that the rally could be institutional-led. This can be seen in both the CME futures and Grayscale discounts, which are showing that institutional participation has increased ever since the November 2022 FTX-led selloff. The CME futures, after declining for about 11 months since December 2021, spiked much higher in December 2022 and began an uptrend in January 2023. The Grayscale discount, which has traditionally been used to gauge institutional demand for cryptocurrencies, has also staged a rebound after falling deeper into the negative in December 2022.


The Federal Reserve did what was expected, raising rates by 25bps yesterday. Federal Reserve Chairman Jerome Powell mentioned a few set of future signals the market should watch for during his post FOMC commentary. For instance, rates would continue to rise but the Federal Reserve was not going to challenge the markets’ dovish expectations. Since the June 2022 policy errors trashed forward guidance, markets have been inclined to emphasize the Fed’s actions rather than words.

The Fed’s favorite inflation gauge, the Personal Consumption Expenditures (PCE ) index, came in-line with expectations, confirming that the rate of inflation has eased again to its lowest point since November 2021.  The PCE index slowed to 4.4% on a year-over-year basis from 5% in the previous quarter.

Q4 2022 US GDP figures came in better than expected, rising 2.9% versus expectation of 2.8%. However, the growth rate was slightly slower than the 3.2% pace set in 3Q 2022, which could mean that the economy was slowing down. While the better GDP number put off fears of recession for some investors, the fact that the economy slowed down gave others a reason to be cautious.

The Bank of England (BOE) and the European Central Bank (ECB) raised rates by 50 bps. Markets’ focus will likely be on the nature of the bank’s divisions. Both the BOE and ECB mentioned that if there were to be evidence of more persistent inflationary pressures, then further tightening in monetary policy would be required. 

Equities, Fixed Income, FX and Commodities


Expectations of lower rate hikes buoyed stocks, with all the major US stock averages putting in another positive week and posted a month of gains in January. Tech stocks were the outperformers, with the Nasdaq rising 4.32% to carve out its fourth week of gains after better-than-expected results from Tesla and Meta, while the S&P and Dow added 2.47% and 1.81% respectively. Tonight is another massive day for earnings as Amazon, Apple, and Alphabet are all expected to report their earnings. 

Fixed Income, FX & Commodities

USD consolidating its post FOMC loses. The greenback was weaker after the Fed hinted that it has turned a corner in the fight against inflation. Dealers increasing its confidence that the end of the central bank’s rate-hike campaign was near. The mixed showing of the USD led to some profit-taking on precious metals, which saw Gold and Silver lose about an inch, even though their rising trends appear to remain intact.

As for oil, prices rose early last week on expectations that global demand will strengthen as top oil importer China reopens its economy and as US crude inventories rose less than expected. However after yesterday’s FOMC meeting ,it pulled back along with precious metals.

News we’ve been reading

  • Tether CTO Paolo Ardoino said the company never borrowed from Celsius. In an independent examiner’s report of the bankrupt lender’s activities, it was stated that ‘the Tether exposure eventually grew to over [USD 2B],’ which was considered an ‘existential risk.’ Ardoino added that the report contained a typo, or that it is a mis-characterization. – link – @PaoloArdoino
  • Former People’s Bank of China (PBOC) advisor Huang Yiping said the government should reconsider its ban on crypto trading in the long run. During a speech in December, Yiping described the ban on the activity as ‘practical’ at the moment, but that a permanent ban could result in missing opportunities associated with novel technology. – link – @SCMP
  • BlockFi has been approved to auction off assets including its mining business. During a court hearing, the bankrupt lender’s legal counsel said it plans to expedite the bidding process to capitalize on current market conditions. Bids are due by February 20, the lawyers also mentioned. – link – @Bloomberg
  • Gemini is reportedly being investigated by the New York Department of Financial Services, according Axios. Sources said the agency is determining whether Gemini’s claims of being FDIC-insured violated the law by misleading investors of its Gemini Earn product. Earn customers are owed USD ~765M from the product’s bankrupt lending partner Genesis. – link – @Axios
  • US prosecutors are looking to prevent Sam Bankman-Fried from accessing encrypted messaging platforms. In a court letter, the prosecutors argued that Bankman-Fried has reached out to former colleagues and potential witnesses via Signal in order to obfuscate the communication from law enforcement. – link – @FT

The fine print


This confidential presentation has been prepared by Coinsquare Ltd., together with its respective affiliates  (the “Company”) solely for information and/or educational purposes. It shall not be construed as investment advice. Information contained herein does not purport to be complete and is subject to certain qualifications and assumptions and should not be exclusively relied upon for the purpose of making any investment or entering into any transaction in relation therewith. Neither the Company nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this presentation by you or any of your representatives or for omissions from the information in this presentation. The information and opinions contained in this document are provided as at the date hereof and are subject to change without notice and, in furnishing this document, the Company does not undertake or agree to any obligation to provide recipients with access to any additional information or to update or correct the document. This document has not been reviewed or approved by any securities administrator in any jurisdiction. This presentation or the information contained herein is not to be given to any person other than the person or group that was provided with the presentation directly  by the Company or their advisors and is not to be reproduced in any manner whatsoever. Any further distribution or reproduction of this presentation in whole or in part, or the disclosure of any of its contents by the recipient, is unauthorized. Interested investors are not advised to rely solely on this document in forming investment decisions and are strongly advised to conduct further due diligence by requesting additional information from the company before making any such investment decisions. Unless otherwise noted, all figures expressed herein are in Canadian dollars. Coinsquare Wealth advisors cannot provide investment advice.

Forward-Looking Information

Certain of the information contained in this confidential presentation may contain “forward-looking information”. Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of the Company, or the assumptions underlying any of the foregoing. In this presentation, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”,  “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. The actual results of the Company could vary from the forward-looking information contained herein, including as a result of such risks as a collapse in the market for cryptocurrencies, adverse regulatory developments and competition from other cryptocurrency custodians. Forward-looking statements and information are based on information available at the time and/or management’s good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the company’s control. The forward-looking information contained herein was developed based on assumptions related to, among other things, the continued growth of the cryptocurrency market, the company’s ability to obtain a license from the Alberta Treasury Board and Finance to operate a trust company or to receive a license from  the applicable securities commissions as a clearing agent, grow its market share and the viability of the Company’s intended future product offerings. The Company does not intend, nor does it undertake any obligation, to update or revise any forward-looking information or statements contained in this presentation to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws. The Company is a new company with no operating history; and it may not actually achieve its plans, projections, or expectations. Important factors that could cause actual results to differ materially from the Company’s expectations include, consumer sentiment towards the Company’s products and blockchain technology generally, litigation, global economic climate, equipment failures, increase in operating costs, decrease in the price of cryptocurrency, security threats, government regulations, loss of key employees and consultants, additional funding requirements, changes in laws, technology failures, competition, and failure of counter-parties to perform their contractual obligations. Neither the Company nor any of our representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency or completeness of the information in this presentation. Certain information contained herein is based on, or derived from, information provided by independent third-party sources. The Company believes that such information is accurate and that the sources from which it has been obtained are reliable. The Company cannot guarantee the accuracy of such information, however, and has not independently verified the assumptions on which such information is based. The Company does not assume any responsibility for the accuracy or completeness of such information.

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