**Note: BTC Markets is unaffected by the announcement made by Binance earlier today. Our payment rails are open, and everything is business as usual for your account. We offer 24/7 free and instant AUD deposits and withdrawals. If you need assistance with your account, please raise a 

 and our Client Support Team will assist you.**

Sui (SUI) is now live and available to trade on BTC Markets.

RBA raises the cash rate by 25 basis points to 3.85%.

Bitcoin continues to dominate, up 63.23% while 1 million wallets hold 1 BTC.

Ethereum sees an unprecedented surge in Ethereum staking returns.

Westpac shuts down customer transactions with Binance Australia.

We are delighted to inform you that Sui (SUI) has been launched on BTC Markets. Sui is an innovative blockchain that focuses on enabling the development of decentralised applications (dApps) with speed, affordability, and user-friendly attributes.

It utilises its unique MOVE programming language and Narwhal-Tusk consensus algorithm. With a maximum token supply of 10 billion SUI, its primary objective is to establish a secure and transparent network for developers and users to engage in the creation and exchange of value. To delve deeper into the Sui project, we invite you to explore our 

: United Kingdom Consumer Confidence and Japan Inflation Rate reports due out.

:United Kingdom Inflation Rate and Germany Ifo Business Climate Index to be released.

: United States Fed Funds Rate and Germany GfK Consumer Climate report due out.

 surprised the market by raising the cash rate by 25 basis points to 3.85% in May, following a sustained period at 3.6% in April. This move marks the 11th rate hike by the RBA within the past year, contrary to market expectations of a pause.

Consequently, borrowing costs have escalated to their highest level since April 2012. The decision reflects the RBA's concern over the prevailing inflation rate in Australia, which currently stands at 7%, considered excessively high. Additionally, the labour market remains tight, with the unemployment rate at its lowest point in almost 50 years.

 in Q1 2023 provided temporary relief, with annual growth reaching a decade high at 3.7%. The wage price index rose in the quarter, slightly below the forecasted increase. The strong figures reflect low unemployment, a tight labour market, and elevated inflation levels.

The RBA emphasised that further tightening may be required to ensure a timely return of inflation to the target range. However, the bank acknowledges that the trajectory of interest rates will depend on the evolving 

, the current cash rate of 3.85% is anticipated to represent the highest point in the rate cycle, with a potential rate cut expected in 2024. There remains a risk of further tightening throughout this year due to elevated inflation. Conversely, 

 maintains its forecast that the RBA will raise the cash rate to 4.1% by August, with the possibility of an additional hike to 4.35%.

 Melbourne Institute Consumer Sentiment index for May 2023 experienced a significant decline of 7.9%, plummeting to a reading of 79.0. This decline far exceeded market expectations of a more modest 1.7% decrease. The index now hovers slightly above the lows observed in March, which marked the lowest monthly reading since the outbreak of COVID-19 in 2020.

 held in Niigata, Japan, was overshadowed by concerns over escalating global economic uncertainty. Key issues discussed included the impasse over the US debt ceiling and the repercussions of Russia's invasion of Ukraine. Central bank leaders from the G7 nations pledged to address heightened inflationary pressures and maintain stable expectations regarding future price movements. A 

 crisis arises when the country reaches its predetermined borrowing limit set by Congress, and the resolution to increase or eliminate the ceiling has become a contentious matter. Breaching the debt ceiling would have severe consequences, including credit rating downgrades, increased borrowing costs, and market turbulence. The potential economic impact could lead to reduced consumer and business confidence, diminished spending, and even a potential recessionary environment.

 for final demand recorded a modest increase of 

, falling short of market expectations for a 0.3% rise. The rise was primarily driven by a slight uptick in services costs, particularly notable in portfolio management. Sectors such as food and alcohol wholesaling, outpatient care, loan services, hospital inpatient care, and guestroom rental also experienced cost increases. However, goods prices saw a slight increase primarily due to a significant surge of 8.4% in gasoline prices. These movements reflect the potential impact on consumer spending, while concerns persist regarding high interest rates and a potential housing market downturn, which could impact overall economic growth and consumer spending in 2023. US building permits declined 1.5% to 1.416M in April 2023, missing expectations of 1.437M. High interest rates and rising consumer prices dampened housing demand.

 rebounded to 4.4% in April 2023, surpassing market expectations of 4.1%. The surge in consumer prices was primarily driven by the central bank's tightening measures, resulting in higher mortgage rates and rental costs. Mortgage rate costs rose to 28.5% compared to 26.4% previously, while rent prices increased by 6.1%. Transportation costs also accelerated, influenced by OPEC's crude oil output cut. However, inflation in the food sector eased slightly. The higher inflation rate raises concerns about a more hawkish stance from the Bank of Canada and presents challenges for the central bank as it navigates its monetary policy decisions.

 expanded by 5.6% year-on-year in April 2023, falling short of market expectations but showing acceleration from the previous month. The manufacturing and mining sectors received significant support from the lifting of the zero-COVID policy, leading to production growth in many sectors. However, some sectors experienced decreases in production.

 performance in the first quarter of 2023, with a growth rate of 0.4% quarter-on-quarter, surpassing market estimates. Private consumption played a significant role in driving growth, rising the most in three quarters after the complete lifting of strict border controls. Business investment also unexpectedly rebounded strongly. However, government spending stagnated, and net trade had a negative contribution. The annualised GDP growth rate of 1.6% for the first quarter marks the strongest pace of growth in three quarters. In April 2023, Japan's trade deficit, decreased compared to the same month the previous year. However, it was still lower than market expectations. This marked the 21st consecutive month of Japan experiencing a trade deficit, which is the longest such period since 2015.

The Bank of England implemented another 25 basis points increase, bringing the bank rate to 4.5% in May 2023, aligning with market expectations. The rate hike aims to address double-digit inflation, with the bank anticipating a decrease in inflation to 5.1% in Q4 2023. Although the UK economy is expected to stall in Q1 and Q2, it is projected to grow by 0.25% in 2023. The bank emphasised the importance of monitoring inflationary pressures, labour market conditions, wage growth, and services price inflation. In the first quarter, the UK's GDP growth of 0.1% matched market expectations, with growth seen in the services, construction, and manufacturing sectors. However, household spending remained stagnant, and the economy remains smaller than its pre-pandemic level. The unemployment rate increased to 3.9%, while employment levels saw an increase.

 plummeted to -10.7 in May 2023, reaching its lowest level in five months and significantly undershooting market expectations. Concerns regarding potential interest rate hikes by the European Central Bank and heightened uncertainty surrounding international economic development contributed to the downturn. Financial analysts anticipate a further deterioration in the economic climate, potentially leading to a mild recession in the German economy.

The last trading week saw the crypto market close in the red for a second consecutive session. Bitcoin closed the week at US$26,917, down a further 5.32% alongside Ethereum, down 3.81% and settling at US$1,799. XRP experienced a decline of 5.28%, closing at US$0.4253 whilst Cardano was also down 1.30%, closing at US$0.3711. Amidst the losses, Litecoin emerged as a survivor, boasting a meagre 0.10% gain, and closing at US$83.50.

Shifting focus to the year-to-date performance, Bitcoin continues to dominate, trading at US$27,306, reflecting an impressive gain of 65.09%. Ethereum has also shown resilience, climbing 52.47% and currently trading at US$1,823. Cardano has steadily risen by 53.46%, now trading at US$0.3774. XRP maintains its stability with a 32.19 % gain, trading at US$0.44.78, while Litecoin has demonstrated its strength with a 33.16% gain, trading at US$93.32.

The market capitalisation of Bitcoin experienced a slight setback, decreasing by 1.23% during the last trading week, with its dominance currently at 48.05%. The overall cryptocurrency market capitalisation suffered a notable decline of 4.62%, now valued at US$1.101 trillion.

(*source: Trading view, as of 18/05/2023 at 3:00pm AEST).

All about Aave’s system of lending pools and community governance.

and community-governed protocol that operates as a non-custodial liquidity market. With over 161,180 token holders, Aave allows users to participate as either suppliers or borrowers. Suppliers provide liquidity to the market and earn a passive income, while borrowers have the option to borrow in an over collateralised or under collateralised fashion.

One of the key advantages of Aave is its audited and secured protocol. It is completely open source, meaning anyone can interact with it through user interface clients, APIs, or directly with the smart contracts on the Ethereum network. This openness enables the development of third-party services and applications that can integrate with the protocol and enhance its functionality.

To interact with the Aave protocol, users simply need to supply their preferred asset and amount. By supplying assets, users earn passive income based on the borrowing demand in the market. Additionally, supplying assets as collateral allows users to borrow funds. The interest earned from supplying funds helps offset the interest accrued from borrowing.

While interacting with the Aave protocol, users should be aware of transaction fees associated with using the Ethereum blockchain. These fees depend on the network status and complexity of the transaction.

As with any platform, there are risks involved. The primary risks related to Aave include smart contract risk (potential bugs in the protocol code) and liquidation risk (risks associated with collateral liquidation). To minimise these risks, the protocol code is public, open source, and audited. Ongoing monitoring and improvements are conducted to ensure the platform's security.

The AAVE token holds a central role in Aave Protocol governance. It is used for 

 on Aave Improvement Proposals (AIPs). Additionally, AAVE can be staked within the protocol to provide security and insurance to the protocol and suppliers. Stakers earn rewards and fees from the protocol for their participation.

1 million individual wallets hold a 1 BTC as Lighting Labs updates software.

The number of individual wallets holding at least one Bitcoin (BTC) has surpassed 

, indicating strong long-term sentiment. This milestone comes despite the recent decline in Bitcoin prices and reflects a 20% increase since February of the previous year.

The growth in these wallets was observed during the collapse of crypto exchange FTX between November and January. The introduction of BRC-20 tokens, which enable developers to issue tokens on the Bitcoin network for decentralised finance (DeFi) purposes, has had limited impact on the number of wealthy Bitcoin holders. Additionally, recent data shows that most Bitcoin transactions now come from smaller wallets, suggesting increased Bitcoin velocity as more users transact with the cryptocurrency rather than holding it long-term.

Lightning Labs, a Lightning Network infrastructure firm, has released an updated version of its 

 on the Bitcoin blockchain after rebranding its project from "Taro" to "Taproot Assets." The rebranding was prompted by a trademark infringement lawsuit filed by Tari Labs, which resulted in an injunction last December. With the legal obstacles resolved, Lightning Labs has resumed development of the software, which will allow users to issue assets like stablecoins on the Bitcoin blockchain.

The newly renamed Taproot Assets protocol is currently available on a test network, with main network support expected to follow soon. The goal is to create an assets protocol for Bitcoin and Lightning that can scale globally without causing congestion or excessive transaction fees on the Bitcoin network.

Moving forward, Lightning Labs plans to propose finalised specifications of the protocol to the Bitcoin community through Bitcoin improvement proposals (BIPs) and Bitcoin Lightning improvement proposals (bLIPs). The ultimate objective is to facilitate Bitcoin-based asset transfers over the Lightning Network, a secondary system that enables faster and cheaper Bitcoin transactions.

The release of Taproot Assets signifies progress in the development of tokenisation capabilities on the Bitcoin blockchain. By enabling the creation and transfer of assets like stablecoins, this technology has the potential to enhance the functionality and utility of cryptocurrencies. It also demonstrates the ongoing efforts to improve scalability and efficiency within the Bitcoin ecosystem. These developments are significant for the global economy as they contribute to the maturation and wider adoption of cryptocurrencies, providing new avenues for financial innovation and inclusion.

Unprecedented surge in Ethereum staking returns.

Ethereum staking has seen a significant surge in returns following the recent upgrade to the Ethereum ecosystem in mid-April. The staking annualised rate of return for ETH validators has 

 of 8.76%, representing an impressive rate of return for staking yields. This surge in returns can be attributed to the successful implementation of the upgrade, which unlocked billions of dollars' worth of ETH and instilled renewed confidence in the Ethereum project.

, has also brought positive changes to the Ethereum network. It has reduced gas fees for developers, improving scalability and efficiency. These enhancements have further contributed to the growing interest and confidence in Ethereum staking.

In addition to the rise in staking returns, the popularity of liquid staking derivative (LSD) protocols, such as 

. These protocols offer an alternative to staking ETH on the mainnet, which requires a significant minimum deposit. Retail investors find these protocols more accessible, as they allow staking with any amount of ETH. Lido Finance remains the leading LSD protocol, with a significant increase in the amount of staked ETH over the past 30 days.

This current momentum in Ethereum staking and the growing popularity of LSD protocols indicate the increasing interest in and confidence of investors in the Ethereum network. It provides an opportunity for investors to earn attractive yields and actively participate in the blockchain's ecosystem.

Judge denies SEC request to seal Hinman documents in the battle against Ripple.

In the ongoing lawsuit between the U.S. Securities and Exchange Commission (SEC) and Ripple, a federal judge has ruled that the SEC 

 related to former official William Hinman's 2018 speech on cryptocurrency and securities. The speech involved Hinman stating his view that Ethereum's native cryptocurrency, Ether, was not a security. The judge determined that these documents, known as the "Hinman Speech Documents," are relevant to the judicial process and should not be sealed.

While the judge allowed the SEC to redact personal information and names mentioned in the documents, she emphasised that sealing the documents would not be in line with preserving openness and public access. The ruling follows an earlier decision by a magistrate judge who had ordered the documents to be turned over to Ripple as part of the discovery process.

The judge granted some of Ripple's proposed redactions, including contractual agreements, financial information, and specific business details. However, she found certain proposed redactions to be overly broad, such as references linking Ripple's revenues with XRP sales and compensation details offered to trading platforms to list XRP. The judge also noted that Ripple sought to redact information regarding the amount of XRP sales targeted at investors through programmatic and institutional sales.

The ruling represents a setback for the SEC in its ongoing legal battle with Ripple and reinforces the importance of transparency and public access to relevant documents in the judicial process.

Binance Australia impacted by Westpac ban on payments.

Westpac, one of Australia's leading banks, has 

implemented a ban on customer transactions

 with Binance, a controversial global cryptocurrency exchange. This measure is part of a comprehensive strategy aimed at mitigating the economic impact of fraudulent activities.

Scott Collary, Westpac's group executive of customer services and technology, emphasised the rise of scammers exploiting overseas exchanges, leading to significant financial losses for customers. Westpac's latest data reveals that investment scams constitute approximately half of all scam losses, with a notable portion of scam payments being directed to cryptocurrency exchanges based overseas.

The implementation of new security measures aims to safeguard customers from such scams. Notably, Binance has faced regulatory challenges, including the cancellation of its derivatives license in Australia and a lawsuit filed by the US Commodity Futures Trading Commission, alleging illegal operations and inadequate compliance protocols.

Crypto industry insiders react to DOJ’s crackdown on potential fraud.

 in the crypto industry is raising concerns and prompting assessments within the sector. Eun Young Choi, director of the department's national cryptocurrency enforcement team, stated in an interview that the focus is on companies that facilitate or commit crimes, such as money laundering. This move comes as the US government acknowledges the challenges of regulating or enforcing criminal actions in the borderless and virtual realm of crypto.

Authorities in the US have already made efforts to tackle crypto-related crimes. For instance, the Justice Department arrested the founder of Bitzlato, a digital exchange, for allegedly transmitting around $700 million in illicit crypto funds. Additionally, a man was charged with defrauding Mango Markets, a decentralised finance platform, of US$110 million worth of crypto.

While the crypto industry supports the crackdown on crime, there are concerns about its impact on innovation. Some question whether the US's enforcement-focused approach to regulation could contribute to market uncertainty. They emphasise the need for clear and comprehensive regulations from Congress to provide guidance for compliance rules and foster industry growth. If regulatory actions continue without clarity, there is a risk of driving crypto out of the US market.

Coinbase CEO Brian Armstrong shares similar sentiments, advocating for strong rules that govern and regulate digitally traded assets. However, he also warns against overregulation of certain aspects, such as staking, which could harm retail traders. Armstrong urges the US to encourage the growth of new technologies by providing a supportive regulatory environment.

The Securities and Exchange Commission (SEC) has also acted against crypto-related misconduct. It charged Genesis Trading and Gemini, two prominent crypto exchanges, with unregistered securities violations. Other individuals, including Do Kwon of Terraform Labs and celebrities like Lindsay Lohan and Jake Paul, have faced SEC charges for allegedly engaging in illegal promotion of crypto securities.

The increased enforcement efforts surrounding crypto crimes in the US stem from incidents like the collapse of FTX and the subsequent discovery of more US individuals using offshore platforms. While the short-term impact may shed light on the illicit use of crypto, in the long run, it may drive the industry towards holistic solutions to address bad actors and encourage mainstream adoption.

The US government's actions in regulating crypto crimes have broader implications for the global economy. As crypto becomes more interconnected with traditional financial systems, regulatory clarity and effective enforcement are crucial to ensure trust, security, and investor confidence. It remains to be seen how the regulatory landscape will evolve, but striking a balance between oversight and fostering innovation will be key for the sustainable growth of the crypto industry on a global scale.

Australian Tax Office (ATO) to increase its oversight of cryptocurrency trades.

intensifying its scrutiny of cryptocurrency

 trades, making it crucial for traders and holders to stay informed about the upcoming tax obligations. As tax time approaches, there are four key areas the ATO is focusing on for 2022, with capital gains or losses from crypto assets taking centre stage.

While it's widely known that converting crypto to Australian dollars should be reported to the ATO, many people are unaware that using one cryptocurrency to purchase another also needs to be reported. Every instance of such a transaction must be disclosed to the ATO. To simplify this process, there is tax software that tracks all crypto trades and calculates the tax liabilities at the end of the financial year.

According to Danny Talwar, Head of Tax at Koinly, trading between cryptocurrencies is a taxable event. This includes trading from Bitcoin to stablecoins and then transferring stablecoins to other crypto assets. It's important to note that not only selling crypto for fiat currency triggers tax obligations, but activities like staking can also generate taxable income.

The ATO has access to information about crypto transactions due to the traceability of blockchains. Wallet interactions can be traced, and exchanges are obligated to provide information to the ATO. When individuals sign up for a crypto exchange, they undergo a Know Your Customer (KYC) process, which often links their exchange accounts to their IDs.

Talwar emphasises that the ATO has a solid understanding of cryptocurrencies and is actively focusing on the crypto space. They have previously released guidelines on cryptocurrency and have identified it as a priority area for ensuring the proper declaration of gains.

Talwar advises crypto enthusiasts to take responsibility for accurately reporting their gains to the ATO. Treating crypto as any other asset, it is essential to stay informed and seek assistance from accountants, particularly for those new to navigating tax obligations related to cryptocurrency holdings. By staying compliant and disclosing their gains properly, crypto investors can fulfill their tax obligations and mitigate potential risks.

Australian consumers lose AU$88.7 million to investment scams.

Investment scams have become a significant concern in Australia, as they continue to target individuals, with a 

 to investment scams. 45.8% of reported cases resulting in financial losses, according to ScamWatch. These scams are evolving rapidly, with scammers employing new technology and tactics that make them increasingly difficult to detect.

Impostor bond scams are on the rise, where scammers impersonate legitimate financial institutions or banks and offer fraudulent government bonds or fixed term deposits. The sophistication of these scams has raised concerns among authorities, including the Australian Competition and Consumer Commission (ACCC). Catriona Lowe, Deputy Chairwoman of the ACCC, highlights the challenges in identifying scams, such as scammers impersonating official phone numbers, email addresses, and websites, as well as embedding scam texts within genuine message threads. This calls for a coordinated response involving government, law enforcement, and the private sector to effectively combat scams.

In response to the growing threat, the federal government has allocated AU$87 million in the budget to establish a National Anti-Scam Centre within the ACCC. The centre will be responsible for taking down phishing websites and other platforms that promote investment scams. The Australian Banking Association (ABA) launched an education campaign to raise awareness of scam scenarios and empower customers to protect themselves.

Weekly Crypto Wrap: 18th May 2023

CEO’s Corner: BTC Markets coin listing process.

US CPI rose 0.4% whilst annual inflation fell to 4.9%.

Bitcoin price at US$27,519, reflecting a 66.36% annual gain.

Ethereum is trading at US$1,832, up 53.16% on the year.

PayPal making waves in the world of crypto.

Sui is a new blockchain designed for building decentralised applications (dApps) with high speed, low cost, and user-friendly features. It uses its own MOVE programming language and Narwhal-Tusk consensus algorithm. With a maximum supply of 10 billion SUI tokens, it aims to provide a secure and transparent network for developers and users to create and exchange value.

Get ready to place your post-only orders on Tuesday, May 16th ahead of the market going fully live on Wednesday, May 17th. 

: Release of the United Kingdom's interest rate data, and the United States' monthly Producer Price Inflation figures.

 Westpac-Melbourne Institute Index of Consumer Sentiment for Australia and the publication of the United Kingdom's Gross Domestic Product (GDP) numbers.

 Announcement of the Michigan Consumer Sentiment index in the United States.

: Release of the Reserve Bank of Australia's meeting minutes, as well as China's Industrial Production figures, the United Kingdom's Unemployment Rate data, Germany's ZEW Economic Sentiment Index, Canada's annual inflation rate, and the United States' retail sales figures.

: Publication of Japan's GDP Growth Rate and the United States' Building Permits data.

: Release of Japan's Balance of Trade figures.

How do we decide what projects to list on BTC Markets?

I want to share some details how BTC Markets decides what tokens/coins to list. Projects are nominated by looking firstly at client demand. For example, based on client requests on social media, inbound client support tickets or where possible to list Top 40 tokens (according to 

From there, the project whitepaper is reviewed by our financial services legal team to ensure it is not a security under Australian regulation. Concurrently, due diligence is done on the founders and project itself. Ideally, we are looking to sidestep listing any projects which may cause legal issues or potential problems for clients down the line.

BTC Markets does not accept payment for listing cryptocurrencies on our platform. This is to avoid compromising our ability to conduct due diligence on projects. While this does not guarantee the quality of the projects listed, it allows BTC Markets to keep "clean hands" and maintain transparency with our clients.

As we are an exchange (not a broker) we build the token infrastructure ourselves. Meaning spinning up the specific blockchain, wallet etc. Invariably, due to the newness of the technology the documentation on this part can be sparse. This historically has meant new chains can be time-consuming to incorporate (but still worthwhile - it is our job after all.) 

Naturally, we focus on issues around custody and security. That is partially offset by our partnering with 

. This should enable us to quickly list shared projects which is an area we can improve on.

The decision to list Sui is to try something a bit different for BTC Markets. It is a brand-new project and in recent years, we had adopted more of a wait and see approach. This time we wanted to offer a project in its earlier stages, to give clients a greater range of fresh listings.

The feedback we got from our clients on the Sui listing is useful. We’re trying something new and want to hear from you. I value the comments about greater community outreach and the involvement in listings. A first step is to give you this greater transparency about how we make these decisions. How we reshape that process to include more of your involvement will be our next step.

Feel free to send a secure message via our support desk on ways we can improve our service offering to you. I look forward to hearing from you.

The Federal government recently announced a 

 package aimed at reducing the cost-of-living burden for Australians. The package includes welfare increases, Medicare incentives, and energy bill discounts. Treasurer Jim Chalmers has confirmed that tax hikes will be implemented to fund the program, and despite the increase in government spending, the impact on inflation is expected to be negligible. The energy bill discounts, split between states and the Commonwealth, are projected to lower inflation by 0.75% in 2023-24, along with temporary price caps on gas and black coal.

Economic growth is expected to slow from 3.25% this year to 1.5% next year due to high interest rates and a slowing global economy. The deficit for 2022-23 has been revised from AU$36.9 billion to a surplus of AU$4.2 billion, the first budget surplus in 15 years. Nevertheless, a forecast deficit of AU$13.9 billion is predicted for the next year, increasing to AU$36.6 billion in 2025-26.

 released its business confidence index for April, reporting an increase of one point to reach zero, its highest reading since January. The uptick was led by the wholesale sector, with small improvements in finance, business and property, retail, and construction. While sales and profitability remained high, employment stabilised, and forward orders and capital expenditures decreased, while labour and purchase costs grew, posing a challenge to the overall positive sentiment. NAB's Chief Economist Alan Oster notes that the survey indicates the economy's resilience.

, beating market expectations with exports and imports both increasing. The growing surplus could have a positive impact on the Australian economy, indicating a robust demand for Australian goods and strengthening the country's position in the global market.

In April 2023, the US CPI rose 0.4% month-over-month, with the largest contributions coming from shelter, used cars and trucks, and gasoline. Annual inflation fell to 4.9%, with slower growth in food prices and falling energy costs. The annual core inflation rate was 5.5%, down from the prior month, matching market expectations.

According to the Federal Reserve’s Senior Lending Executives' report, banks across the US are 

, which some analysts see as a warning sign of an impending recession. The Federal Reserve's tightening cycle and the simultaneous tightening by commercial banks are contributing to the pessimistic outlook for the US economy.

Michael Kantrowitz, Chief Investment Strategist at Piper Sandler & Co, noted that the Fed and commercial banks' tightening is happening simultaneously, which is unique. Historically, the Fed hikes interest rates first, which then causes the economy to slow down, and then banks tighten their lending standards. However, this time, the phenomenon suggests that the lag of these tightening actions could hit the economy simultaneously, making it more challenging for the economy to recover.

Kantrowitz also highlighted that just because the Fed pivots, it does not mean the end of the recession, as banks are still tightening their lending standards. He noted that the Fed will probably cut rates in a hard landing scenario, but the banks will continue to tighten their lending standards. This is why it takes time for rate cuts to revive the economy.

Tightening lending standards are a significant indicator of an impending recession, and the 

 when predicting the onset of a recession according to analysts. As the lending standards tighten, it will become more challenging for businesses to access credit, which will lead to reduced investment and economic activity.

, attributed to a rise in exports and a decline in imports. In 

came in better than expected, beating forecasts whilst the unemployment rate also edged down, matching a 50-year low seen in January, and below market expectations.

The Canadian economy saw a slower pace of expansion in economic activity in April, with the 

 falling and full-time employment declining in March. The rate of inflation also softened, in contrast, a record trade surplus was reported in March.

China's annual inflation rate fell to 0.1% in April 2022, the lowest since February 2021, with slowdowns in food and non-food prices. Trade surplus expanded in April due to an increase in exports, but 

 due to weakened domestic demand. The Caixin China General Manufacturing PMI unexpectedly fell, showing the first contraction in factory activity since January, with reduced output growth and the steepest decline in selling prices since December 2015. Input prices also decreased due to lower raw material prices.

European Central Bank (ECB) recently announced

 its decision to increase its key interest rates by 25 basis points (bps) during its May meeting. This move is seen as a sign of a slower pace of policy tightening despite seven consecutive rate increases as the ECB aims to combat high inflation despite ongoing recession risks. President Lagarde further emphasised that the ECB has more ground to cover, indicating that the rate-lifting cycle is not pausing anytime soon. Meanwhile, in Germany, the trade surplus increased in March, beating market expectations while exports fell less than imports.

The crypto market witnessed a downturn in the last trading week, which saw Bitcoin decline by 2.75% closing the week at US$28,430. While Ethereum saw a small increase of 0.02% and ended the week barely in the green at US$1,870. On the other hand, XRP lost 4.57% and closed at US$0.4490. Cardano was also down 4.95% closing at US$0.3760, while Litecoin lost 5.44% and finished in the red at US$83.42.

Looking at the year-to-date performance, Bitcoin is currently trading at US$27,519, reflecting a 66.36% gain. Ethereum is trading at US$1,832, marking a 53.16% increase on the year while Cardano has similarly increased by 48.49% and is trading at US$0.3650. Meanwhile, XRP is holding steady with a 26.20% gain on the year, trading at US$0.4277 followed by Litecoin, with a gain of 14.51%, trading at US$80.33.

In the last trading week, Bitcoin's market capitalisation has decreased by 0.55%, and its dominance is presently at 48.11%. The overall cryptocurrency market capitalisation experienced a decline of 1.63% during the last trading week and is presently valued at US$1.109 trillion.

(*source: Trading view, as of 11/05/2023 at 1:00pm AEST).

Understanding Bitcoin Satoshi Vision (BSV).

 is a cryptocurrency that was launched in 2018 as a fork of Bitcoin Cash, which was itself a hard fork of the original Bitcoin blockchain. The aim of BSV is to address Bitcoin's scalability issues while staying true to the original vision of a peer-to-peer electronic cash system as outlined in the Bitcoin white paper.

One of the main differences between BSV and Bitcoin is that BSV provides a larger block size, which allows the network to process more transactions quickly, making it a scalable option for businesses and individual investors.

Bitcoin SV's creator, Dr. Craig Wright, claims to be the true Satoshi Nakamoto. BSV provides smart contract capabilities that allow for the creation of programs and applications on the network.

Bitcoin network congested while BRC-20 tokens 

 on Sunday due to congestion issues on Bitcoin’s network, which resulted in higher-than-normal transaction fees. 

 reached their highest levels in almost two years on Friday, averaging US$9.62 per transaction, representing an over 500% increase compared to six months ago.

The uptick in congestion and higher transaction fees coincides with a steep rise in the number of 

, as people use the protocol for minting NFT-like assets on Bitcoin to create and trade fungible, BRC-20 tokens.

This resulted in the market cap of BRC-20 tokens reaching close to 

 as the value of tokens built on Bitcoin's blockchain surged, following ORDI's listing on major exchanges. BRC-20 is an experimental framework for creating fungible tokens on Bitcoin using Ordinals. The tokens have been in existence for two months, with ORDI being the first, and have gained popularity amid Bitcoin meme coin mania. Other BRC-20 tokens include MEME, PEPE, PIZA, and DOMO.

The congestion on the Bitcoin network also led to a boost in revenue for miners from attached fees, with the surge in transactions caused by a flood of small 546 sat transactions.

Ethereum network experiences surge in traffic.

According to recent reports, the Ethereum network has experienced a surge in network traffic over the past week, causing transaction fees to reach their highest levels since The Merge last September. The congestion has been attributed to the trading of small altcoins, including meme coins such as PEPE, which has led to a crowding-out effect on the Ethereum NFT market.

As a result of this congestion, there has been a large net reduction in ETH supply due to the implementation of ETH burn in Ethereum's EIP-1559 fee market overhaul. This burn mechanism helps to reduce the overall supply of ETH by destroying a portion of the transaction fees paid by users on the network.

The surge in network activity has renewed discussions around the future path to scalability for Ethereum and the importance of Ethereum's layer-2 scaling solutions reaching maturity. This is particularly important given that the congestion of the base layer of Ethereum has made it difficult for NFT creators to mint and trade their digital assets, as the number of ERC-721 tokens (the most popular NFT standard on Ethereum) has fallen while daily transfers of ERC-20 tokens are rising significantly.

There is some hope on the horizon for those concerned about the scalability of Ethereum. The upcoming 

 is expected to help lower L2 fees with the implementation of EIP-4844. This could help to mitigate the impact of high transaction fees and congestion on the Ethereum network.

Despite the network congestion, there is still significant demand for 

. According to recent data from Nansen, more than 200,000 ETH has been deposited to the network since the start of the week, marking the first-time deposits have outpaced withdrawals since the Shapella upgrade went live last month. This surge in deposits brings the number of Ether locked for staking purposes to over 19 million tokens, which represents about 15% of the total circulating supply.

This rush to stake ETH has been driven by the increasing popularity of meme coins such as Pepe coin (PEPE), which have put a strain on the Ethereum network and sent transaction fees to a 12-month high. To take advantage of the demand for staking, platforms such as Lido Finance have emerged, offering users the ability to stake their ETH and receive network rewards in the form of alternative tokens. These alternative tokens can be used as liquidity in the broader decentralised finance (DeFi) ecosystem, offering users a passive investing strategy with returns of up to 6.6% in annualised yield rewards.

Ripple CEO claims US$200 million legal bill in SEC lawsuit.

, Ripple has spent $200 million defending the case brought against it by the United States Securities Exchange Commission (SEC).

Garlinghouse dropped the figure during a fireside chat at the Dubai Fintech Summit on May 8. He stated that the US is stuck, compared with the regulatory progress of the United Arab Emirates virtual asset regulatory authority and the recent Markets in Crypto-Assets (MICA) bill in the European Union. He went on to share that by the time the case is decided, Ripple will have spent US$200 million defending itself against a lawsuit which, from its very beginning, doesn’t make a lot of sense.

In a message to SEC chair Gary Gensler, Garlinghouse expressed regret about the US falling behind significantly as Ripple expands to the United Arab Emirates. According to him, the tough thing about the situation is having a country that has put politics ahead of policy. Garlinghouse said one of the first pieces of advice he gives entrepreneurs when they ask him about getting something started is,” If I were you, I would not start in the United States.” He believes many US-based companies and US public companies would agree.

When asked about the US needing a clear regulatory framework for crypto, Garlinghouse said the SEC must understand that most people working in crypto and blockchain are good actors who want to stay within the rules of the road but need them defined.

The case has been going on for two and a half years and has created headwinds in the US market. A decision is expected from the judge sometime in the next three to six months, according to Garlinghouse.

PayPal has been making waves in the world of cryptocurrency, and the latest news is no exception. According to a recent quarterly report filed with the US Securities and Exchange Commission, the fintech company's 

 have increased by more than 56% since Q4 2022. As of March 31, 2023, PayPal now holds a combined total of US$943 million in cryptocurrency assets, with Bitcoin accounting for US$499 million and Ethereum accounting for US$362 million.

This disclosure shows a significant increase in PayPal's cryptocurrency assets, which made up 77.9% of its total financial liabilities for the first quarter of 2023. While the report doesn't provide a detailed breakdown of 

, there has been a jump in deposits. In fact, PayPal's customers' crypto deposits jumped from US$604 million in the prior quarter to US$943 million as of March 31, a 56% increase.

Bitcoin was the most popular cryptocurrency in terms of current holdings and quarter-over-quarter percentage increase, spiking 71% to just short of half a billion dollars. The second-most held cryptocurrency, Ethereum, saw a 45% increase in deposits, while "Other," consisting of Bitcoin Cash and Litecoin, saw gains of plus 30%.

The increase in deposits may not solely be due to customers increasing their holdings. As the report notes, the risks of accounting for cryptocurrency, including "technological, legal, and regulatory risks," mean that crypto assets are recorded as both a liability and an asset on PayPal's books. It is therefore unclear precisely how much of the 56% quarter-over-quarter increase in deposits relates to increased crypto holdings or the increase in dollar value over that period.

Despite the risks, PayPal seems to be bullish on cryptocurrency, allowing users in some regions to buy, hold, sell, and pay for purchases using cryptocurrency. However, it's worth noting that PayPal doesn't have any cryptocurrencies on its balance sheet other than those belonging to its customers. Custody of the assets held on behalf of customers remains limited to third-party holding companies, with no safeguarding loss events incurred by the company as of March 31, 2023.

SEC wants investment advisers to use "qualified custodians".

The proposed rule by the US Securities and Exchange Commission (SEC) requiring investment advisers to use "qualified custodians" to hold their clients' assets, including cryptocurrency, is 

 from a diverse group of stakeholders. The proposal aims to extend the requirement to all assets that investment firms manage, but critics claim it goes too far and may have unintended consequences.

The proposed rule specifies that assets entrusted to investment advisers must be held with "qualified custodians." SEC Chair Gary Gensler argues that crypto platforms do not meet the criteria of "qualified custodians," potentially cutting investment firms off from the crypto industry. The SEC has also faced opposition from the securities industry's chief lobbying group, which called the proposal "jurisdictional overreach," and the crypto sector, which called it "illegal, infeasible, and dangerous."

Several stakeholders in the crypto sector, such as Anchorage Digital Bank and state-chartered trusts like Coinbase's Custody Trust Co. and BitGo, have argued that they would qualify as proper custodians. The New York Department of Financial Services has also pointed out that its system for regulating trust companies specialising in crypto is the best way to ensure safe custodianship. Cutting those off "would run the risk of pushing novel activities into unregulated spaces, including offshore."

Overall, concerns about the proposal focus on its potential impact on smaller investment advisers and the lack of clarity about whether crypto custodians will meet the SEC's criteria for "qualified custodians." Stakeholders in the crypto industry are also worried that the narrowing choices for custody may cause clients to bear greater risks than they currently do. The SEC will now review all outside comments before finalising the rule.

Over the past few months, the Australian government and regulators have been heavily focused on preventing consumers from falling victim to crypto scams, particularly considering the recent collapse of some infamous crypto businesses.

One effective approach to achieving this goal could be to limit the ease with which Australians can be exposed to online scams. Social media platforms like Facebook/Meta, Twitter, and YouTube are known to be fertile breeding grounds for scams to target unsuspecting audiences, especially those with limited knowledge of investing.

Advertisements that utilise public figures (whether real or fake) to promote crypto assets that have supposedly been endorsed by financially savvy individuals are all too common. Unfortunately, cautioning clients about these risks may not always suffice, as some may assume that investments promoted on social media platforms must be legitimate.

While this is not an issue unique to crypto, there have been instances where celebrities have been involved in legal disputes over the use of their name or image to sell products they do not endorse. Unlike other types of investments, dealing with crypto transactions can be particularly complicated since they can be instantaneous, irreversible, and unrecoverable.

Weekly Crypto Wrap: 11th May 2023

The RBA's rate hike surprises the market as US Fed follows suit. 

Second-largest US bank failure in history occurred this week.

Bitcoin is up 75.60% in 2023 & total weekly crypto market cap gains 3.01%.

Legal experts warn that the SEC is entering dangerous territory.

Biden Administration proposes 30% tax on US crypto miners.

Please be advised that our site and API will be offline for scheduled maintenance this Friday 5th May between 2am-7am AEST. Follow us on 

 Germany's Balance of Trade report. The Euro Area's Deposit Facility and Interest Rates. Canada's Balance of Trade. United States' Balance of Trade, and the European Central Bank's Press Conference.

 Canada's Ivey Purchasing Managers Index and Unemployment Rate, as well as the United States' Non-Farm Payrolls and Unemployment Rate reports due out.

 Australia's NAB Business Confidence Index.

: Westpac-Melbourne Institute Index of Consumer Sentiment for Australia and China's Balance of Trade report.

 United States' Monthly and Yearly Inflation Rate, as well as the Core Inflation Rate.

 made an unexpected move by raising the cash rate by 25 basis points to 3.85% in May, marking the 11th rate hike in the past year. This decision was contrary to market predictions for a pause and has pushed borrowing costs to their highest level since April 2012. The RBA cited concerns about Australia's current inflation rate of 7%, which is still above its target range, as the reason for the rate hike. Additionally, the tight labour market, with the unemployment rate at its lowest level in almost 50 years, further necessitated the move.

The RBA has signalled that further tightening may be necessary to ensure that inflation returns to its target range within a reasonable timeframe. However, the bank's rate path will be influenced by how the economy and price pressures evolve over time. Projections indicate that inflation is expected to reach 4.5% this year and decline to 3% by mid-2025.

According to Christian Baylis, founder of Fortlake Asset Management, the decision confounded the market, and Andrew Canobi, director of Australian fixed income at Franklin Templeton, called the move "an insurance hike". 

 had implied a 90% chance the RBA would stand pat given core inflation. According to David Bassanese, chief economist at Betashares the RBA's firm policy tightening bias suggested another rate rise possibly as soon as next month or at least by August.

US Federal Reserve has increased interest rates

 by a quarter of a percentage point, marking the tenth-rate hike in the current cycle and bringing the fed-funds rate to a target range of 5.00% to 5.25%, its highest since 2007. While the 

 about avoiding a recession, the risk of a misstep is growing as higher rates squeeze budgets. 

 has reiterated the central bank's commitment to lifting rates higher if needed, and rate cuts are unlikely to happen this year. The committee's aim is to 

BTC Markets Blog

Weekly Crypto Wrap: 18th May 2023

Weekly Crypto Wrap: 11th May 2023

Weekly Crypto Wrap: 4th May 2023

Weekly Crypto Wrap: 27th April 2023

Weekly Crypto Wrap: 20th April 2023

Weekly Crypto Wrap: 13th April 2023

Get BTC Markets content delivered

.css-10i63lj:hover{-webkit-text-decoration:underline;text-decoration:underline;}.css-187z2gv:hover{-webkit-text-decoration:underline;text-decoration:underline;}Weekly Crypto Wrap: 18th May 2023

Weekly Crypto Wrap: 11th May 2023

Weekly Crypto Wrap: 4th May 2023

Weekly Crypto Wrap: 27th April 2023

Weekly Crypto Wrap: 20th April 2023

Weekly Crypto Wrap: 13th April 2023

Get BTC Markets content delivered

Weekly Crypto Wrap: 18th May 2023