Week of Apr 5, 2022

Big Banks Are Getting More Active in Crypto

Bitcoin’s Biggest Conference Kicks Off This Week. Central Banks Discuss DeFi And Stablecoins. United Kingdom To Make Stablecoins Legal For Payments.

💬 Market Commentary


Bitcoin’s largest annual conference kicks off this week in Miami. Ledn will have 16 representatives down in Miami, manning a stunning booth. Ledn’s co-founder and CEO, Adam Reeds will also be participating on a panel to chat about the Bitcoin Mortgage. Make sure to stop by and say hi if you’re at the conference.

Big conferences are usually accompanied by big announcements - and sometimes big surprises. 

This could be a big week for bitcoin for several reasons:

  1. Potential product, investment or partnership announcements from the conference. There will be a lot of big personalities taking the stage, and as we have learned from previous Bitcoin conferences, anything can happen. 

  2. The Luna Foundation Guard seems to continue with its plan to accumulate up to $3 Billion worth of bitcoin, and there seems to be a sustained bid in the price. 

  3. We are starting to see some large institutional players in traditional finance continuing to get more active in crypto. Last week it was Galaxy and Goldman, this week the news came from Citigroup.

Last week Zerohedge published an allegedly leaked Citigroup report on “how to value Bitcoin”. The report included 12-month price targets ranging from $26k - $121k. While the report is yet to be confirmed, it likely foreshadows a lot more research and activity to come from Citi, and other big banks around crypto. 

Citi’s crypto efforts have been a long-time in the making, and it is part of a strategy to get more business from its clients. Let’s review how we got here.

Back on August 24th, 2021 - Citi announced that it was considering offering bitcoin futures trading for some institutional clients.

The pilot must have been successful, as shortly after, on November 23rd, 2021, Citi announced plans to hire 100 new roles for its new digital asset division. 

Looking back to last week’s report - this type of market intelligence is typically produced as a result of client demand. They want to better understand the asset class.

Expect this trend to continue, as Bank of America, Goldman Sachs, and JP Morgan have all been making significant hires and are openly making a push to offer bitcoin to their clients.

Interestingly, the leaked bitcoin report was not the only news out of Citi last week. It also published an estimated price tag on “The Metaverse”, saying it could be worth up to $13 Trillion.

Looking at the markets, bitcoin funding rates remain slightly positive and within normal ranges. The shape of the futures curve is showing a healthy contango. There are not too many indicators of high leverage or short interest in the markets.

It’s shaping up to be a great week for bitcoin.

S&P 500

The end of last week brought investors and the Fed some happiness. The S&P 500 rose for the third consecutive week after the March jobless report went on to reinforce the Fed’s rate hike expectations - 431, 000 jobs were created. Additionally, unemployment fell to 3.6% vs the economists expectations of 3.8%. The numbers show a healthy economy but also highlight the Fed’s expectations to increase rate hikes as it attempts to rein inflation. The Labor Department showed that hourly base pay increased 5.6% over the last 12 months, the highest rate since the 1980’s.

The S&P 500 has regained lost ground since the end of February when Russia invaded Ukraine. The index is now just ~5.00% shy from reaching its January all-time high. The S&P 500 index reversed a bear market head and shoulders pattern. These types of patterns are referred to as a chart formation baseline with three peaks, where the outside (outter) peaks are approximate in height but the middle peak is the highest. Technical analysts use the head and shoulders pattern to predict a bullish-to-bearish trend reversal. Why is this important? Based on the pattern, market analysts believe that the market will continue to rally and potentially see a new S&P 500 index high. 

Oil prices rose as much as 3.00% as Saudi Arabia raised prices. Oil prices rose to a 14-year high due to Russia’s invasion into Ukraine. The invasion casted uncertainty around global oil supply. Russia is the second largest oil exporter. The increase in oil will have an effect on consumer goods, services, transportation and derivative products.  


Gold prices continue to trend upwards. Over the weekend, more civilian casualties were reported in Ukraine as Russia continues to show lethal force against civilians, sparking a global outrage that could bring on additional sanctions to the Kremlin. Coupled with these news, the rising inflation conundrum, and Wednesday’s FOMC minutes, investors have continued to buy gold. In parallel, the dollar has strengthened relative to other global currencies and U.S. Treasury yields have risen amid expectations that the Fed will hike interest rates faster than expected. 

As international macroeconomic tailwinds continue to be present, international conflict and supply-chain backlogs, investors have flocked to safe-haven assets like gold. In March, the U.S. Mint had its best performance since 1999. According to the latest sales data, the United States mint reported sales of 155.5k oz of various denominations of gold bullion coins, this represents a 73%increase from February. From the beginning of the year until the end of the first quarter of 2022, the U.S. mint has sold 426.5k oz of gold, representing a 3.5% increase from 1Q21. 

With potential new international sanctions, the Kremlin looks for new markets to sell its gold - such as exporting to China and the Middle East. The world’s second largest bullion miner has been closed off from European and U.S. markets after the invasion of Ukraine. Now the Kremlin must venture into new territories as it looks to sell the roughly 340 tons of gold mined in the country, which is worth close to $20 billion. The government granted miners and lenders licenses two year ago to be able to directly export gold to buyers (mostly foreign banks). The Bank of Russia used to be the biggest sovereign buyer of gold, purchasing most of the country’s mined gold, but it paused purchases at the beginning of 2020. Now, the Bank of Russia has pledged that it will start buying gold to help absorb some of the supply that can’t be exported due to international sanctions. Producers and lenders have started conversations with Chinese and Middle Eastern financial institutions and buyers to begin transactions on the precious metal.


Decentralized Finance (“DeFi”) protocols have a total value locked (“TVL”) of $233.38 billion currently, only ~8% shy of the all-time-high (“ATH”) of $254.02 billion as per Defillama.com data, dated March 4, 2022. Stablecoins are cryptocurrencies where the price is designated to be pegged to a cryptocurrency, fiat, or exchange-traded commodities. Currently, there are $183.71 billion stablecoins in circulation. Stablecoins are a key component and play a crucial role in the DeFi ecosystem. Stablecoins over-collateralize an existing digital asset in order to maintain a consistent market price and provide a buffer against market price fluctuations caused by the underlying collateral asset.

The Finance and Economic Ministries of the United Kingdom announced they have the intention to amend the country’s existing regulatory framework to incorporate stablecoins as a means of payment. Additionally, the U.K.’s government will create a Cryptoasset Engagement Group which will be tasted with working closely with industry participants to find solutions to implement and explore how the tax system in the U.K. could promote the development of the crypto market and attract talent into the country. 

The Bank for International Settlements (“BIS”) is having a virtual conference that examines “safe DeFi” and the role of Central Bank Digital Currencies (“CBDCs”)/ stablecoins. BIS, an institution owned by central banks. The conference comes at a time the industry has been under intense scrutiny from multiple governments, central banks, and regulators.


Over the weekend, the overall amount of Bitcoin mined reached a milestone of 19 million. There are only 21 million Bitcoins that could ever be mined, so to date ~90.5% of all Bitcoin has been mined. Soon after the 19 millionth Bitcoin was mined, the mining difficulty reached new all-time highs. Approximately every 10 minutes, is the timeframe between each block reward. Every two weeks, the difficulty adjusted algorithm (DAA) adjusts according to network activity. 

The higher the hash rate goes, the higher the mining difficulty becomes. As the hash rate increases, the DAA adjusts mining difficulty to match the rate, thus making it more complex for Bitcoin miners to find a block in the network. With only two million Bitcoins left to be mined, more miners are expected to join the network as Bitcoin becomes more valuable and more businesses seek to earn Bitcoin rewards. The remaining Bitcoins are expected to be mined by around 2140.

What's Ahead


On Wednesday, the market will keep a close eye on the Fed minutes as they will provide important guidance into the monetary policy outlook as well as additional details on the Fed’s plan to shrink the central bank’s $9 trillion balance sheet. Fed officials are scheduled to make appearances during the week to update the public about their view on the economy, jobs, and expected inflation. 

Investors will continue to look closely at the U.S. Treasury yield curve since the yield curve inverted at the end of last week. When a shorter-dated yield rise above longer-dated yields, it is called an inverted yield curve. Inverted yield curves tend to signal recessions.

The market will monitor the oil price volatility. Saudi Arabia has announced that it will be increasing its pricing of oil exports. Additionally, the on-going war in Ukraine has investors on edge as the conflict continues. 

Lastly, the European Central Bank (“ECB”) will also publish its minutes from their March meeting. At their last meeting, the ECB announced that it would speed up the plans to withdraw stimulus measures, shocking investors. Eurozone inflation has reached a record high of 7.5% for the month of March. Just like in the U.S., this put pressure on the ECB to take the necessary measures to contain inflation. 

We hope you enjoyed reading and as always, we wrap up with a summary of the upcoming economic data and earnings reports for the week:


9:30 AM EST - Philadelphia Fed President Patrick Harcker speaks on the economy

2:00 PM EST - FOMC minutes


8:30 AM EST - Initial jobless claims and continuous jobless claims 

9:00 AM EST - St. Louis Fed President James Bullard speaks on the economy

2:00 PM EST - Fed bank presidents Charles Evans and Raphael Bostic speak on inclusive full employment 

3:00 PM EST - Consumer credit  


10:00 AM EST - Wholesale inventories (revision) 

11:00 AM EST - Ledn’s co-founder and CEO Adam Reeds participates on Bitcoin Mortgages panel at the Bitcoin 2022 conference.


11:00 am EST - NY Fed median 1-year and 3-year expected inflation 

It's a big week coming up, and as always, we'll keep you posted on any relevant news throughout the week right here and from our Twitter account.


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About the author

Mauricio Di Bartolomeo

Mauricio is the co-founder and Chief Strategy Officer of Ledn.io. He grew up in Venezuela where he and his family learned about Bitcoin. Now based in Canada, Mauricio holds HBA and MBA degrees from the Richard Ivey School of Business in London, Ontario in Canada.