🌳 The US Economy Slows As GDP Falls Short Of Economists’ Expectations; The House Committee Suggests That A Stablecoins Bill May Be Coming Soon

26 Apr 2024, Friday

2:22 AM

🌳 The US Economy Slows As GDP Falls Short Of Economists’ Expectations; The House Committee Suggests That A Stablecoins Bill May Be Coming Soon

BTC

ETH

S&P Futures 500

$64,250.35

$3,143.90

$5,123.25

(-0.47%)

 (-0.45%)

(+0.77%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)


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Our Daily View

What We Are Covering Today

  • US GDP grew at 1.6%, below economists' expectations; Alphabet's stocks surged 14% on results exceeding analysts' projections (More in Macro & TradFi)
  • House Committee member hints at stablecoin bill; Stripe reintroduces crypto payments with stablecoin (More in DeFi & CeFi)
  • A whale and Justin Sun have been purchasing large amounts of BTC and ETH respectively over the past few weeks (More in On-Chain)
  • ATM IVs continue this week’s decline; the 25-delta skew continues to hover at zero levels (More in Crypto Derivatives)
  • BTC consolidates with $65K resistance; ETH tests support near the $3.1K threshold (More in Crypto Technical Analysis)

Macro & TradFi

The US economy experienced a sharper slowdown than expected in the last quarter, with GDP advancing at a 1.6% annualized rate, below economists' projections. However, underlying demand remained resilient, as reflected in final sales to private domestic purchasers, which rose at a 3.1% rate after adjusting for inflation. This sustained demand contributed to faster inflation, with a closely watched measure of underlying price pressures increasing at a greater-than-expected 3.7% clip. The Federal Reserve, already expected to maintain interest rates at a two-decade high, may face renewed pressure to delay rate cuts further. Despite the headline miss in economic growth, personal spending increased healthily, particularly in services and residential investment. However, spending on goods declined for the first time in over a year. Chair Jerome Powell's remarks at the upcoming Fed meeting will be closely watched for insights into the central bank's policy stance. 

On the other hand, despite the worrying macroeconomic signs, Alphabet's shares jumped 14% as its latest earnings report exceeded expectations, with earnings per share at $1.89 and revenue reaching $80.54 billion, driven by robust performance in key segments like YouTube advertising and Google Cloud. The company announced its first dividend of 20 cents per share and authorized the repurchase of an additional $70 billion in shares, underlining its commitment to shareholder value. Net income surged 57% to $23.66 billion, with Google's core advertising business witnessing significant growth and Google Cloud reporting improved profitability. CEO Sundar Pichai emphasized Alphabet's leadership in AI research and infrastructure, positioning the company for future innovation. Overall, Alphabet's strong financial results underscore its resilience and strategic focus on long-term growth and value creation for shareholders.

Lastly, on Thursday, U.S. stocks closed lower as Meta's AI spending plans and GDP data raised concerns among investors. The Dow Jones Industrial Average dropped by 1%, while the Nasdaq Composite slid by 0.6% and the S&P 500 slipped by 0.4%. Meta's shares plummeted after the company increased its full-year capital expenditure forecast, citing infrastructure investments to support its artificial intelligence (AI) roadmap, despite posting better-than-expected first-quarter profit. Treasury yields surged after Thursday's GDP report, with the yield on the 10-year Treasury reaching over 4.73%, its highest level all year. In individual stock movements, Merck (MRK) rose 2.9% after beating first-quarter earnings estimates, while Intel (INTC) climbed 1.8% ahead of its earnings report. Conversely, Meta (META) tumbled 10.6% after increasing its full-year capital expenditures forecast, and Bristol Myers Squibb (BMY) fell 8.6% after reporting a loss in the first quarter and announcing job cuts. Investors will be looking out for labor data next week, with JOLTS Job Openings data due next Wednesday at 22:00 SGT.

CeFi & DeFi

  • A ranking member of the House committee has indicated that a stablecoin bill may be forthcoming soon
  • Stripe reintroduces crypto payments with a stablecoin
  • Square merchants can now convert up to 10% of sales to Bitcoin via Cash App
  • Consensys files lawsuit against SEC and commissioners over Ether regulation

Amidst negotiations with Republican lawmakers and the Senate, a House committee member has suggested that they are making progress on passing stablecoin legislation, with a few amendments left to make. Despite the Clarity for Payment Stablecoins Act passing the House Financial Services Committee in July 2023, it has yet to be presented for a full vote on the House floor. However, recent developments suggest that lawmakers are addressing regulatory concerns surrounding Digital Asset entities to ensure the protection of investors and users.

In other news, payment service provider Stripe is re-entering the cryptocurrency space by facilitating payments using stablecoins. Specifically, Stripe customers would be able to pay for services with USDC on the Solana, Ethereum, and Polygon blockchains beginning this summer. Being a leader in the Digital Asset space by first introducing a program to allow creators on X to receive payments in USDC and polygon, this move to reintroduce stablecoins as a medium of exchange on their platform indicates the growing trust in stablecoins as a store of value. This could also have a broader positive impact on the Digital Asset industry as a whole with wider adoption of cryptocurrency and increased trust.

On-Chain

In an analysis by Lookonchain, they have identified that Justin Sun has been buying up large amounts of Ethereum over the past few weeks. Just yesterday, he bought 21,527 Ethereum worth $67.6M, bringing his total accumulation of 176,117 Ethereum to a total value of $559.7M since April 8. This suggests that despite the recent depreciation in the price of Ethereum, whales have been purchasing it, potentially for use within the digital asset ecosystem. This may include activities such as staking, liquid staking, and restaking, which are trending in the current market.

In another analysis by Lookonchain, a BTC whale has been noticed to be buying BTC after the BTC price diminished. Just yesterday, he purchased 620 BTC worth $39.8M when BTC price was at a low. In total, he purchased 4,380 BTC worth $282.38M at an average price of $64,471 on March 21. This potentially suggests that these whales have a positive sentiment towards BTC, but traders should be cautious in their approach towards BTC and look out for the developments in the BTC ecosystem before making any decisions.

Crypto Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remain relatively flat at 58.81% and 66.64%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC increased to -0.94%, while ETH also dropped to -5.93%.
  • The futures market witnessed $195.84M in liquidations, with longs representing 68.1%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

22.64%

AVAX

OKX

dYdX

15.02%

DOGE

ByBit

dYdX

12.99%

AVAX

ByBit

dYdX

Notes:

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, and DOGE vs. USDT perps. 

2) CEXs observed include Binance, Bybit, OKX & dYdX.

3) Lookback period is 24 hours.


Today's BTC implied volatility (IV) chart shows a continued downward trend, with the 7-day IV decreasing further, indicating that immediate-term volatility expectations are waning. The 30-day IV is also trending lower, suggesting a broader market sentiment of stabilization. This pattern of decreasing IV across both time frames indicates that the market is settling into a more predictable phase after the recent volatility during the halving.

Today's BTC term structure continues to show a contango shape. The relatively flat slope of the curve past the short-term maturities suggests that there’s a general expectation for higher future volatility.

Today's BTC skew chart illustrates a relatively stable 7-day skew, maintaining proximity to zero, which indicates a neutral sentiment. The 30-day skew also shows stability with a minor negative value, suggesting a slight concern for future price drops but no strong bias towards bearishness. Overall, the skews imply that the market remains composed with no immediate directional pressures continuing the trend of market equilibrium we've observed in the previous days.

@Paradigm reported that BTC options activity today included a purchase of 800x $59K Puts for 3-May-24, a sale of 293x $75K/$100K Call Spreads for 27-Sep-24, a purchase of 200x $62K Puts for 31-May-24, and buying of 155 Inverse Call Spreads for $80K/$85K for the same date. A Call Calendar was also bought with 125x contracts for 10-May-24 at $68K and 31-May-24 at $71K. On the ETH front, there was a purchase of 4,000x Call Spreads for 26-Apr-24 at $3.1K/$3.2K, 3,000x $2.9K Puts for 31-May-24 were bought, and 1,000x $3.6K Puts for 26-Apr-24 were sold.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC’s price continues to consolidate, with a clear rejection at the $65K resistance level. The rejection indicates that the market is experiencing resistance at this price point, which if breached, could lead to a test of the subsequent resistance at around $70K, marking an approximate 9.91% increase from the current level. Meanwhile, the price finds immediate support near the $64K region. A break below this could expose BTC to lower support levels, potentially around $60K, a decrease of about 6.84%.

On the other hand, ETH reveals a retreat in price, returning close to its support level. Currently oscillating near $3.1K, ETH demonstrates a testing phase of this critical support zone. Should this level fail to hold, the next significant support lies in the vicinity of $3K, translating to a potential decrease of roughly 3.7%. On the flip side, immediate resistance is established around the $3.3K mark. A decisive move upward through this resistance could pave the way for a surge towards the $3.6K region, approximately a 14.75% increase from current prices.

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