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Weekly: Disassociation

Crypto trading volumes ticked higher this week, and US CPI data rattled traditional risk assets but didn’t affect crypto markets

September 14, 2023

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Key takeaways

  • Crypto trading volumes ticked higher this week, as market players were partly reacting to FTX’s plans to liquidate around $3.4B in digital assets
  • US headline and core inflation data surprised economists’ expectations slightly to the upside in August

Written by

  • David Duong, CFA, Head of Institutional Research

Market View

Crypto trading volumes ticked higher this week, with daily spot activity for BTC and ETH up 37% over September 11 to 13 compared to the rest of the month. In part, market players were reacting to FTX’s plans to liquidate around $3.4B in digital assets, alongside $2.6B in (debtor and non-debtor) cash and $1.3B in brokerage and government recovered assets. That adds up to $7.3B total, valued as of August 31. On September 13, the US bankruptcy court in Delaware formally approved FTX’s motion to sell these assets.

According to the court filing, the firm holds around $1.16B in SOL (Solana), $560M in BTC, $192M in ETH and $1.49B in various other tokens. After some selling pressure early this week, markets later recovered, which we believe implicitly recognized that there are several mitigating factors that should reduce the risk of market shocks when these tokens are eventually sold:

  • First, it’s unlikely these tokens will flood the market because liquidations are bound by weekly sell limits of $50M per week across digital assets in the initial phase, before increasing to $100M in subsequent weeks. Approval from two committees representing FTX debtors is required to later permanently increase this to a maximum limit of $200M.
  • Second, there are strict controls in place for selling certain “insider-affiliated” tokens that require 10 days advance notice to these same committees.
  • Third, a major part of FTX’s SOL holdings are locked up until around 2025 due to the token’s vesting schedule, as are some other tokens up for sale.
  • Fourth, FTX will be able to hedge its sales of BTC and ETH as well as other debtor-identified assets through an investment advisor, assuming it receives prior committee approval.

Macro outlook

US headline and core inflation data surprised economists’ expectations slightly to the upside in August (at 3.7% YoY and 4.3% respectively), but the resulting choppy price action in traditional risk assets had almost no noteworthy impact on crypto markets. Correlations between digital asset returns and changes in exogenous macro factors have risen of late but remain very low, indicating no significant relationship has re-emerged. The coefficient between daily bitcoin vs S&P 500 returns is 0.19 based on a 90-day window, for example.

Although CPI isn’t reflecting the disinflationary momentum of previous months, the Wall Street Journal had reported (prior to the data release) that the Federal Reserve is more likely to pause at its FOMC meeting on September 20-21, which we believe is still the most likely outcome. However, August’s inflation data may affect the board’s dot plot, which may be scrutinized by market participants and add to volatility more broadly in the next two weeks. Already Fed funds futures are pricing in a 50% probability of a hike in November.

That said, we still expect the Fed to ease monetary policy in late 1Q24/early 2Q24, which should support crypto markets as this will coincide with some important idiosyncratic catalysts. As we said in our August Monthly Outlook, we believe expansionary fiscal policy is pro-cyclically keeping the US economy preternaturally strong for the time being. But underneath the seemingly healthy top-level indicators, labor markets have peaked, credit conditions have tightened, loan delinquencies are rising and student loan repayments will restart in October. We think a dual expansionary fiscal and monetary regime should be very supportive for bitcoin in particular as an alternative to the traditional financial system.

Crypto & Traditional Overview

(as of 4pm EDT, Sept 14)



Mkt Cap

24 hour change

7 day change

BTC correlation



















Gold (Spot)






S&P 500


















Coinbase Exchange & CES Insights

The CES desk saw dip buying late Monday and through the week after the potential pace of sales from the FTX debtors became clear (see Market View) and fears of outsized liquidations subsided. While the majority of the flow was in BTC and ETH, we saw interest in a number of the harder hit altcoins such as SOL. Option traders are keeping a close eye on BTC and ETH skew given the FTX estate may look to hedge their holdings in those tokens with puts and calls. As of late Thursday, skew in both tokens show 25D calls trading a premium to comparable puts.

Coinbase Exchange & CES Insights 2023-09-21

Financing Rates







5.00% - 10.75%


USD - 1m


5.25% - 11.00%

USD - 6m


5.50% - 11.50%


2.00% - 6.00%


3.00% - 7.50%


Notable Crypto News


  • New DCG plan could see Gemini Earn users get back all their crypto (The Block)
  • PayPal PYUSD stablecoin is 100% backed: Paxos transparency report (Cointelegraph)


  • Three Arrows Founders Hit With 9-Year Trading Ban in Singapore (Coindesk)
  • Wyoming stablecoin: Are state digital currencies even possible? (Cointelegraph)


  • Lido’s Staked Ether Tokens Can Soon Be Used on Cosmos, IBC Blockchains (Coindesk)
  • Binance.US cuts staff, CEO departs (The Block)
  • BNB Chain’s Layer 2 Network opBNB Goes Live (Coindesk)


  • Coinbase Prime launches Web3 Wallet (Coinbase Blog)
  • Coinbase to integrate Bitcoin Lightning Network: CEO Brian Armstrong (Cointelegraph)
  • Just the facts: A regulation by enforcement only approach is hurting American leadership, jobs, and innovation (Coinbase Blog)
  • Coinbase Cloud and Kiln unlock native ETH staking without minimum stake requirements on Coinbase Wallet (Coinbase Blog)

Views From Around the World


The G20 leaders have endorsed the FSB's “high-level recommendations for the regulation, supervision, and oversight of crypto-assets activities and markets and of global stablecoin arrangements” emphasizing “the effective and timely implementation of these recommendations in a consistent manner globally to avoid regulatory arbitrage.” also said they “welcomed several reports by standard-setting organizations.” (

London Stock Exchange Group (LSEG.L) is “looking into using blockchain to build what it described as ‘an end-to-end digital market ecosystem to raise and transfer capital across asset classes’” according to Reuters. (Reuters)


Taiwan's Financial Supervisory Commission for Virtual Currency Management is “set to issue 10 guiding principles for virtual asset providers in September” to make sure that such crypto entities “establish review mechanisms, keep customers payments separate from their own tokens and comply with anti-money laundering laws (AML),” according to CoinDesk. It also plans to set out that “unregistered overseas firms should not solicit business in the country.” (CoinDesk)

Southeast Asia's ride-hailing app giant Grab has integrated web3 services, enabling users to set up crypto wallets, win blockchain-based rewards and pay with NFTs. (Yahoo Finance)

The Week Ahead

Sept 18

Sept 19

Sept 20

Sept 21

Sept 22

Notable Macro


FOMC Rate Decision


BOJ Rate Decision

BoE Rate Decision

BOJ Rate Decision

Notable Earnings


Messari Mainnet 2023 Starts


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