Is the ‘crypto winter’ melting in the spring?

Is crypto winter thawing in spring?

The beleaguered cryptocurrency industry is still reeling from the humiliating market crash earlier this year. The price of many heavily traded tokens fell, while popular narratives about the benefits of digital coins as a hedge against inflation or a store of value were abandoned.

At the same time, some once-prominent firms in the sector – including crypto-lending platform Celsius and hedge fund Three Arrows – collapsed in the wake of relentless market pressure.

But in recent weeks, prices have plateaued.

The world’s flagship cryptocurrency bitcoin has largely hovered around $20,000 to $25,000, after falling from a peak of just under $69,000 in November. The Merge – the name given to ethereum’s transition to a greener, less energy-intensive blockchain system – has so far failed to propel the respective coin to previous highs of nearly $5,000.

Overall, the volume of crypto futures has also failed to take off. Data shared with the Financial Times from the analysis platform Crypto Compare shows that total futures volumes have remained flat over the past three months.

Still, the relative stability of the industry’s most popular tokens in recent weeks has led to debate among speculators about when the so-called “crypto winter” can be considered to have melted into spring. Scott Chipolina

Did US consumer prices cool in September?

Inflation in the US is expected to have risen slightly lower in September than last month, helped by a fall in energy prices.

Economists polled by Reuters expect the headline US consumer price index to register a reading of 8.1 percent in September year-on-year, compared with 8.3 percent in August. The CPI is expected to have risen 0.2 per cent on a monthly basis, compared to 0.1 per cent in August.

The drag in the headline CPI is likely to be partly attributable to a fall in energy costs, said Barclays analyst Jonathan Hill, who expects the data to show a roughly 6 percent drop in gasoline prices.

But forecasts show that the core CPI – which strips out the effects of the volatile food and energy sectors – could be boosted by the continued rise in shelter costs.

The CPI is expected to have reached 6.5 percent year-on-year in September, and 0.5 percent month-on-month, from 6.3 percent and 0.6 percent respectively in August. House prices in the US have fallen in recent months as higher interest rates have driven up mortgage rates. This has in turn strengthened the rental market, with Barclays expecting the inflation data to show an increase in rental prices of 0.6 per cent month-on-month.

The CPI data is due one day after the publication of the minutes from the Federal Reserve’s September meeting. Both data and minutes will likely inform the market’s expectations for the Fed’s November meeting.

Futures markets are currently pricing in expectations for a fourth consecutive rate hike of 0.75 percentage points next month. The tone of the minutes and the state of inflation may cement that view. Kate Duguid

Did UK GDP fall in August?

The UK economy is expected to have contracted somewhat in August, after stagnating for most of this year, as soaring prices hit household demand and business activity.

Economists polled by Reuters expect data on Wednesday to show GDP fell 0.1 percent between July and August, after flatlining in the three months to July.

The data is also expected to show that industrial production shrank by 0.2 per cent month on month, while production in the service sector rose 0.1 per cent.

In the three months to August, the economy is estimated to be 0.2 percent smaller than in the previous three months.

Britain’s economic outlook has not brightened, economists say, despite government plans to help with rising energy costs and proposed tax cuts.

The government has frozen household energy bills and cut taxes to boost growth. However, some economists expect a deep recession in the UK economy as the “mini” budget resulted in rising interest rate expectations, adding a cost-of-borrowing crisis to a cost-of-living crisis.

Sanjay Raja, economist at Deutsche Bank, said the UK economic outlook “has weakened further” following the policy announcement on 23 September. He expects that household spending and business investment will be weaker than before the government announced tax cuts with an expected increase in unemployment. from next year.

Despite fiscal measures that should support real disposable income, “tighter economic conditions will offset much of the gains in fiscal policy,” Raja said.

He now expects the UK economy to recover to pre-pandemic levels only in 2024. This is in stark contrast to all other G7 countries which have already regained the ground lost during the health crisis.