Financial markets rallied on Tuesday following the announcement by the US Trade Representative office that certain items were being removed from the new tariff list, while duties on others would be delayed until mid-December. Specifically, as per the announcement, some of the 10% tariffs will be delayed until December 15 – this includes cell phones, laptops, video games, certain toys, and certain shoes/clothes. CNBC cited comments from one of the most influential voices on Wall Street, Jim Chanos, who hinted that Chinese President Xi Jinping may take this as a sign that the US may cave if China applies enough pressure. He tweeted - “So then tell me why Xi should not continue to wait out The World’s Greatest Negotiator, who keeps ‘dealing’ with himself?”
As ever, the market for digital assets remains in a state of flux. On the one hand, market participants are contending with never-ending political drama, be it in the form of trade talks, Brexit or the standoff in HK, and on the other hand, there is a growing unease surrounding the DeFi market. The total amount of ETH locked in the Maker credit ecosystem may have stabilized for the time being, but the outflows from other platforms are yet to find a floor. The total amount locked in Dharma, which had nearly $30mln at its peak, currently stands at $11.1mln and the trend lower has yet to abate.
Given the outflows, it is worth keeping a closer eye on the shape of the futures curve, in case the structure flips from contango back to backwardation. The delta spreads have narrowed recently and are off the widest levels observed earlier this summer. Another metric worth watching are lending and borrowing rates. The lending rates for DAI are now near 1-month lows, but the lending rate for USDC is yet to show a similar downward trajectory.
In other news, Barclays, the London-based global bank, is no longer working with cryptocurrency exchange Coinbase, industry sources told CoinDesk. And while Coinbase found a replacement in U.K. upstart ClearBank, according to people familiar with the situation, the change has indirectly inconvenienced the exchange’s users. That’s because, aside from the prestige of working with a household-name bank, Coinbase was connected to the U.K. Faster Payments Scheme (FPS) via Barclays, enabling users to instantly withdraw and deposit British pounds at the exchange.
Elsewhere, Charles Hoskinson, a co-founder of the Ethereum Network and current CEO of IOHK, has announced that IOHK-created project Cardano will be rolling out version 1.6 within a few days’ time. As per IOHK’s website, Cardano is a blockchain platform that uses the proof of stake algorithm Ouroboros. Its native cryptocurrency, ADA, is based on the functional programming language Haskell. Daedalus, for its part, is the only cryptocurrency wallet that supports ADA. Additionally, the website states that Daedalus can also be used as a wallet manager to organize and provide backup for other wallets and their assets.
Thank you for reading,
The BeQuant’s Analytics team