Weekly Market Highlights - 26 August, 2022
Happy Friday! The Weekly Market Highlights is an initiative from the Binance Research team to round up the week, summarizing key market events and views from the team.
🔎 Macro / Tradfi
- U.S. Fed chairman Jerome Powell will speak on Friday morning EST at the Federal Reserve’s annual Jackson Hole, Wyoming, symposium. Fed watchers expect from Powell a tougher and more hawkish version of the Central Bank’s promise to slow inflation by raising interest rates. Probability of a 0.75% rate hike has increased over the past week - traders are now pricing a 62.5% chance of a 0.75% hike in Sep.
- Power prices rose to records around Europe. To date, European gas prices have surged almost 40% this month and nearly 300% this year. The energy crisis further haunts the Euro as it tumbles to a 20-year low against the dollar. Concerns among investors are growing as the U.S. Central Bank seems to be laying the ground for more aggressive rate hikes than previously anticipated.
- The Ethereum Merge now has a confirmed activation date. The Bellatrix upgrade will activate on September 5, and the Merge itself will be completed between September 10-20. Meanwhile, Ethereum 2.0 client Teku has released version 22.8.1, which includes required upgrades for all mainnet users. We observe a weakening correlation between ETH and equities, which might imply that the Merge is driving ETH prices, causing a decoupling of ETH and stocks.
- Most trades today are still conducted on centralized exchanges. The DEX/CEX ratio rose from 6.8% to 15.3% in 2021 but has declined from its peak of 16.5% in January 2022 to 13.0% in July 2022. The year-to-date fall is likely contributed by an overall decline in DeFi activity this year. Nonetheless, the DEX/CEX ratio today is still nearly double that of the beginning of 2021. More details can be found here.
🔎 Latest Binance Research Publications
Check out our latest publications:
- Tokenomics - Deep Dive
- Uncovering DeFi Fundamentals: Decentralized Exchanges
- The Rise of Decentralized Autonomous Organizations
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