Big Tech Pain

Crypto Market Week in Review (28 October 2022)

Markets

This week the markets were mixed. Bonds bounced from oversold levels on the back of the positive political news in the UK and the looser-than-expected monetary policy decision of the European Central Bank. Stock index moves were indecisive as positive macro background collided with negative quarterly reports of some of the largest US technology companies. Microsoft, Amazon, and Alphabet (Google) disappointed investors due to slower growth, and Meta (Facebook) was slaughtered, plunging by 25% on the day of the report, ending back at 2016 levels. Jim Cramer of CNBC nearly cried on TV, apologizing for his recommendation to buy the stock (see more about the story at www.forexlive.com ).

Meta (Facebook) stock price

Cryptocurrencies rallied, and altcoins outperformed. Ethereum shot up about 20%. That was a change compared with the sleepy trading of the last few weeks, but not a big one so far. Bitcoin remains more or less in the recent range.

Cryptocurrencies' stability and resilience to market moves are not enough for miners, facing higher energy bills. On Thursday, shares of Bitcoin miner Core Scientific plunged by 78% as the company warned of a liquidity crunch and likely insolvency. Core Scientific is one of the world’s largest miners of Bitcoin, so the news shows the degree of stress in the crypto mining industry. “Operating performance and liquidity have been severely impacted by the prolonged drop in the price of Bitcoin, a rise in electricity costs, increased competition, and litigation with bankrupt Celsius Networks,” – Bloomberg cited the company regulatory filing.

Implied volatility of Ethereum attempted to break out this week on the back of a 20% spot rally while implied volatility of Bitcoin was firmly stuck in the range and even fell to its lower bound.

Bitcoin DVOL index

Ethereum DVOL index

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