Newsletter Volume 34
Article 1: The Market This Week.
Welcome to the weekly crypto market update. In this report, we will provide you with the latest news and analysis on the cryptocurrency markets, including Bitcoin, Ethereum, and other major altcoins. We will discuss the current market trends, price movements, and other factors affecting the crypto market. Stay tuned to stay updated on the latest developments in the exciting world of cryptocurrencies.
The cryptocurrency market saw a decline on Monday, with Bitcoin falling by 2% to $30,221 and Ethereum trading below $1,900. Despite positive investor sentiment, the challenge for Bitcoin is to maintain its position above the crucial level of $30,000. Mudrex CEO, Edul Patel stated this as the key challenge. The market cap of Bitcoin, which is currently around $586bn, was trading lower around $1.18tn, leading to a decrease of 2% in the global cryptocurrency market cap in the last 24 hours. Other top cryptocurrencies like Litecoin, Cardano, and Polygon also saw a decline, with each falling over 3%. Apple is set to remove Damus, a decentralized social media platform similar to Twitter, from the App Store for violating in-app purchase guidelines. Damus runs on the Nostr protocol, which is popular with Bitcoiners due to its support for payments over the blockchain's Lightning Network. The app allows users to send small amounts of Bitcoin to content creators using a feature called "Zaps". Apple identified this feature as violating its App Store Review Guidelines, which prohibit the sale of digital content. Founder William Casarin, suggested a compromise that would remove the Zap button from note sections, but Apple was not satisfied.
Switzerland's Central Bank is to issue a wholesale digital currency in a pilot project on the SIX digital exchange, according to Swiss National Bank Chairman, Thomas Jordan. The currency will be "real money equivalent to bank reserves" and will facilitate transactions with market participants, Jordan said at the Point Zero Forum on 26 June. The pilot project comes as more than 100 Central Banks explore what their own Central Bank Digital Currency (CBDC) might look like, with the Bank of International Settlements and a working group of Central Banks arguing that the introduction of a CBDC could offer an innovative opportunity for the monetary system. The IMF is working on a worldwide infrastructure for CBDCs to allow for interoperability of the currencies and prevent their underutilization. Each of the G7 economies has shifted from the research phase of a CBDC to the development stage. However, to get past the development or piloting digital payment stages, participating banks need to focus on design decisions as they relate to technology, end-user preferences and business models, "within a final-decision-agnostic testing environment", according to a report by pymnts.com.
Jeremy Allaire, CEO of Circle, has stated that he expects the new wave of Bitcoin Exchange-Traded Funds (ETFs) to be approved, as regulators’ past concerns are being addressed. Allaire’s comments come as the crypto markets remain volatile, with Bitcoin hovering around the $30,000 mark. Edward Moya, senior market analyst at the OANDA’s, has provided his analysis of the current state of the market, stating that the recent sell-off was due to concerns over tighter regulation and the potential for a crackdown on mining in China. Meanwhile, Eric Snyder, a partner at law firm Wilk Auslander LLP, has discussed a new report from the FTX team that delves into the financial details of the failed exchange. Finally, CoinDesk has ranked the top crypto hubs for 2023, with Abu Dhabi making the list.
The regulatory landscape for crypto companies is shifting towards the East, away from the perceived unfriendly North American market. Dubai established the Virtual Asset Regulatory Authority (VARA) in the past year, and Abu Dhabi is seeking to pass its own crypto-friendly regulatory framework this year. The European Union passed the Markets in Crypto-Assets regulation in April, and Hong Kong's Securities and Futures Commission began accepting license applications for crypto exchanges this month. The lack of a global regulatory framework for crypto has made it necessary to practice regulatory arbitrage. The International Monetary Fund’s (IMF) Monetary and Capital Markets department called for a global framework to “bring order to the markets, help instill consumer confidence, lay out the limits of what is permissible, and provide a safe space for useful innovation to continue.”
Maxine Waters, Chair of the House Financial Services Committee, has reached out to regulators in an attempt to get a crypto-focused bill passed. The bill would allow US-based digital asset exchanges to register with the SEC. In a letter to SEC Chairman Gary Gensler, Waters asked him to explain how the Digital Asset Market Structure proposal would impact the SEC's "existing authorities." This includes its ability to protect investors and maintain fair, orderly, and efficient markets. A similar letter was sent to Treasury Secretary Janet Yellen, asking her to explain how the bill would impact the Treasury Department and its mission to promote economic prosperity and ensure financial stability. The letters come as regulators are grappling with how to regulate the growing cryptocurrency market.
KEY METRICS
Total Crypto Market Cap: $1.22 T
Ethereum Market Cap: $225.61 B
ETH/BTC Ratio: 0.06
Ethereum Gas Price: 26 gwei
DeFi TVL: $72.92 B
Fear and Greed Index: 56 (Greed)
Federal Reserve Balance Sheet: $8.36 T
Article 2: Weekly Spotlight on IC15.
The global cryptocurrency market traded higher amid growing interest from institutions and BlackRock's Bitcoin ETF filing with the US SEC. The IC15 Index was up 1867 points to 39,046 at 4 pm, on Monday. All the coins in the Index were positive, with Litecoin, Bitcoin, Avalanche, and Cardano being the major gainers in the 7-10%. Five US enforcement agencies formed a new organization called Darknet Marketplace and Digital Currency Crimes Task Force to tackle crimes related to the darknet and digital currency, such as money laundering, child exploitation, etc. The University of Nicosia (UNIC) launched the world's first Master of Science (MSc) in Metaverse program for students to grab the skills of the metaverse. The Cryptocurrency market saw an increase in trading as institutions showed growing interest and BlackRock filed for a Bitcoin ETF with the US SEC.
The Monetary Authority of Singapore (MAS) has partnered with the Bank for International Settlements (BIS) and other financial institutions to introduce a framework aimed at developing interoperable networks and exploring the tokenization of various financial assets. This move is expected to enhance the efficiency and transparency of financial markets.
Additionally, the Swiss National Bank (SNB) has recently revealed its plans to launch a wholesale Central Bank Digital Currency (CBDC) pilot project. The SNB's CBDC will be issued on the Swiss SIX digital exchange, further highlighting Switzerland's growing interest in digital currencies.
In a bid to establish itself as a crypto hub, HSBC, the largest bank in Hong Kong, has launched crypto services for its customers. This new offering allows customers to purchase and sell Bitcoin and Ethereum ETFs listed on the Hong Kong exchange. By embracing cryptocurrencies, HSBC aims to cater to the increasing demand for digital assets and position itself as a leader in the crypto space.
These developments reflect the growing acceptance and adoption of digital currencies and blockchain technology within the global financial industry. The collaboration between MAS, BIS, and other institutions underscores the importance of creating interoperable networks to facilitate seamless transactions across different asset classes. This initiative has the potential to revolutionize traditional financial markets and streamline processes.
Similarly, the SNB's pilot project demonstrates Switzerland's commitment to exploring the potential benefits of CBDCs. By issuing a wholesale CBDC on a digital exchange, the SNB aims to gain insights into the practicality and feasibility of digital currencies on a larger scale.
HSBC's decision to offer crypto services highlights the bank's recognition of the significant role cryptocurrencies play in the modern financial landscape. By providing customers with access to Bitcoin and Ethereum ETFs, HSBC aims to tap into the growing demand for digital assets and establish itself as a leading player in the crypto market.
Despite positive economic data from the US, the global cryptocurrency market experienced a significant decline. The IC15 Index, which tracks the performance of various cryptocurrencies, dropped by 223 points to reach 40,097 at 4 pm, on Wednesday. This decline affected all the coins included in the Index, with Polygon, Uniswap, Avalanche, and Shiba Inu being the major losers, experiencing losses in the range of 3-5%.
In the meantime, regulators from Japan and Singapore have joined forces to test cryptocurrency projects and collaborate on developing regulations for the industry. This initiative falls under the Project Guardian program of Singapore's Monetary Authority of Singapore (MAS), which aims to ensure the integrity and security of the cryptocurrency market.
Furthermore, the UK Law Commission is advocating for the establishment of laws governing digital assets within the country. The goal is to position the UK as a global hub for cryptocurrencies and non-fungible tokens (NFTs). By creating a clear regulatory framework, the UK aims to attract businesses and investors in the crypto space, fostering innovation and growth in the industry.
In Latin America, crypto firm Ripio has received approval from the Bank of Spain, the country's financial regulator, to operate as a cryptocurrency exchange and provide digital wallet custody services. This license approval signifies a significant step forward for Ripio, as it expands its operations into the European market.
Additionally, financial services giant Fidelity Investment has entered the race for a Bitcoin Exchange-Traded Fund (ETF) following BlackRock's recent ETF filing. Fidelity Investment plans to file for a spot Bitcoin ETF in the coming days, becoming the second company to do so this month. This move highlights the growing interest and competition among major financial institutions to offer regulated investment products tied to cryptocurrencies.
Article 3: The Battle of Bulls and Bears.
The cryptocurrency markets were a mix of gains and losses. Bitcoin, XRP, and Polkadot saw gains, while BNB, Polygon, and Solana experienced losses. Bitcoin rose slightly by 0.02% to $30,405, while Ethereum remained below the $1,900 mark. The trading volume for Bitcoin reached approximately $16.68 billion, with a 9% increase in the last 24 hours, on Monday. The overall sentiment was positive, driven by the possibility of a Bitcoin ETF and positive economic indicators from the US. Bitcoin has remained above the $30,000 threshold for five consecutive days, but faces resistance at the $30,680 and $30,950 levels, with support at $30,000.
BlackRock, the world's largest asset manager, has filed for a spot bitcoin exchange-traded fund (ETF) despite the Securities and Exchange Commission's (SEC) history of rejecting such applications. This news has helped bitcoin recover from its recent losses and shows the growing interest in regulated exposure to cryptocurrency. An ETF would allow investors to gain exposure to spot Bitcoin on a regulated U.S. stock exchange without the need for custody. This is seen as a major advantage, as custody has been a significant challenge for investors looking to enter the bitcoin market.
Bitcoin's market value has recently reached nearly half of the overall $1.1 trillion crypto market, its highest share in over two years. This growth is significant, as at the start of the year, Bitcoin's market share was around 40%, up from a low of 34% in 2018. The filing by BlackRock for a spot Bitcoin ETF indicates a growing acceptance and interest in cryptocurrencies by institutional investors. BlackRock's involvement in the crypto market could bring more legitimacy and stability to the industry, as the asset manager has a strong reputation and influence in the financial world. While the SEC has rejected previous applications for Bitcoin ETFs, the filing by BlackRock may have a better chance of approval due to the company's reputation and influence. If approved, a spot Bitcoin ETF could attract a significant amount of capital from institutional investors, further driving the growth of the cryptocurrency market.
The global cryptocurrency market cap has experienced a slight decrease of 0.03% in the past 24 hours, on Wednesday, currently trading at around $1.18 trillion. This indicates a relatively stable market, with minimal fluctuations in value. Within the crypto market, the decentralized finance (DeFi) sector has seen a total volume of $2.14 billion in the past 24 hours on the same day. Although this only represents 6% of the overall crypto market's 24-hour trading volume, it is still a significant amount and highlights the growing popularity and adoption of DeFi platforms. Stablecoins, which are cryptocurrencies pegged to a stable asset like the US dollar, have contributed a substantial volume of $33.22 billion. This accounts for 92% of the total crypto market's 24-hour trading volume, indicating the widespread use of stablecoins for trading and transactions within the crypto ecosystem. Stablecoins provide stability and reduce volatility, making them an attractive choice for traders and investors.
Bitcoin, the largest cryptocurrency by market capitalization, currently has a market cap of approximately $590 billion. Its dominance in the market stands at 50.16%, representing a slight increase of 0.16% over the day. This indicates that Bitcoin continues to maintain its position as the leading cryptocurrency, despite the presence of numerous altcoins and the growing popularity of other blockchain projects.
Overall, the cryptocurrency market remains robust, with a total market cap of $1.18 trillion. The slight decrease in market cap and the relatively low fluctuations in value suggest a stable market environment. The DeFi sector and stablecoins continue to play significant roles in the crypto market, with DeFi platforms gaining traction and stablecoins dominating the trading volume. Bitcoin's dominance remains strong, demonstrating its continued importance and influence within the crypto ecosystem.
Article 4: Weekly Spotlight.
German investment bank Berenberg has stated that Bitcoin may soon regain its popularity and enthusiasm within the crypto industry. The bank believes that more investors are recognizing Bitcoin as a sensible alternative not only among other crypto tokens but also within the global financial context. This recognition is seen as a result of Bitcoin's decentralization and the design of its blockchain protocol, which has led regulators to characterize it as a commodity rather than a security. Berenberg's report suggests that this regulatory advantage, combined with increasing interest from investors, could enable Bitcoin to regain attention and enthusiasm in the coming months. The recent price appreciation of Bitcoin is seen as a sign that more investors are recognizing its value proposition. Additionally, concerns over the Federal Reserve's interest-rate policies and the recent banking crisis in the US have led some countries to reduce their exposure to the US dollar, fueling the concept of de-dollarization. This could further highlight Bitcoin's value proposition as an alternative to traditional currencies. The report also highlights the upcoming Bitcoin halving in May 2024 as a potential positive catalyst for cryptocurrency, as historical trends have shown that Bitcoin tends to rally ahead of and after halving events.
The price of Bitcoin has experienced a 0.5% increase in the past 24 hours, reaching a value close to $30,450. Despite breaching the key psychological level of $30,000 last week, the largest digital asset remains below recent highs of around $31,500. This stability above $30,000 has been attributed to the filing of a Bitcoin ETF by financial giant BlackRock (BLK), which has generated positive momentum for cryptocurrency.
Craig Erlam, an analyst at broker Oanda, noted that Bitcoin has been trading between $30,000 and $31,000 recently, displaying good momentum following the ETF filings. This has led to speculation within the crypto community about whether this development could reignite enthusiasm for cryptocurrencies.
The next significant event that could potentially drive a more substantial movement in digital assets is the release of the U.S. Personal-Consumption Expenditures (PCE) index for May, which is scheduled for Friday. The PCE index is the Federal Reserve's preferred measure of inflation and is closely monitored by investors. Its impact is expected to extend to the Dow Jones Industrial Average, S&P 500, and Bitcoin.
Investors will be closely watching the PCE index as it could provide insights into the state of inflation in the United States. Any significant changes in inflation could have implications for monetary policy decisions made by the Federal Reserve. This, in turn, could influence the performance of various asset classes, including Bitcoin.
The recent stability and modest price increase of Bitcoin suggest a positive sentiment among investors. The filing of a Bitcoin ETF by BlackRock has played a role in boosting confidence in cryptocurrency. As the market eagerly awaits the release of the PCE index, there is anticipation that it could act as a catalyst for more significant movements in digital assets.
Overall, the cryptocurrency market is experiencing a period of relative stability, with Bitcoin maintaining its position above $30,000. The upcoming release of the PCE index will provide valuable insights into the state of inflation and could have far-reaching effects on various asset classes, including Bitcoin.
