GB Market Commentary 03/10/2022
by Marcus Sotiriou
Optimism in global markets has decreased further as there are concerns around the solvency of banking giant Credit Suisse. Their stock price has dropped by over 60% this year alone. Most of the recent fears have arisen after a report released from ABC Australia, which said, "a major international investment bank is on the brink".
Many have speculated that they are indeed referring to Credit Suisse. Credit Suisse's credit default swaps (CDS) costs, which is the cost of insurance against a default, have reached the highest level since 2008, the year of the Global Financial Crisis. This means that investors are truly concerned about the potential for Credit Suisse, the largest bank in Switzerland, to default.
The reason this is so significant is because Credit Suisse are considered to be G-SIB (Global Systemically Important Bank) partly due to their total assets under management.
The uncertainty around Credit Suisse is an advert for the need for decentralised financial systems and cryptocurrency. This could be why decentralised exchanges are taking up a larger market share than centralised exchanges.
Data from CryptoCompare shows fiat exchange volume fell in September by 3.8%, resulting in a fifth consecutive decline in volume. However, CryptoCompare data tells us that total crypto volume (involving crypto brokers and decentralised exchanges) increased in September by 16% (from $630 billion to $733 billion).
This was the first notable rise in volume since April and May of this year – could this mean smart money have been preparing for a trend reversal? The termination of Bitcoin’s current trading range, between $17,600 and $22,800, should give us the answer.