Weekly Crypto Wrap: 11th July 2024

TLDR

• Olympian heptathlete, Tori West to represent Australia at the 2024 Paris Olympic Games.
• US Fed Chair's speech fuels rate cut expectations.
• German government sells off their BTC as Mt. Gox prepares repayments.
• US Ethereum ETFs nearing launch amid SEC progress.
• DigitalX Bitcoin ETF to launch on ASX.
• Australian business confidence hits 18-month high.
• US adds 206K jobs in June as unemployment rate rises to 4.1%.

BTC Markets announcements

Olympian heptathlete, Tori West to represent Australia in Paris.

We are delighted to share some exciting news with you. BTC Markets sponsored athlete, Tori West, has qualified for the Paris 2024 Olympic Games, after achieving the highest score in Oceania by an Australian in 16 years.

This incredible achievement is a testament to Tori's dedication, resilience, and excellence in one of the games most gruelling events.

Read the full announcement here and watch our interview with Tori here.

Stay tuned for updates on Tori's journey and follow us on social media for more exciting news.

[DA] Top 50 Impact List 2024 nominations are now open.

BTC Markets is sponsoring the [DA] Top 50 Impact List 2024. This is a great opportunity for you to nominate 1-3 people who you feel, have made a positive impact in the digital asset space in Australia. It takes less than 1 min to complete.

[DA] List showcases and highlights those who hold the most significant influence over the trajectory of the digital asset industry in Australia.” Nominate now.

BTC Markets partners with Syla for crypto tax reporting solution.

BTC Markets has partnered with Syla to simplify cryptocurrency tax reporting for Australian users. This collaboration integrates Syla's advanced tax reporting solutions, providing a seamless and localised approach to managing crypto taxes.

The partnership addresses the challenge of accurately declaring and managing taxes on digital assets, benefiting both new and seasoned users.

Click here to view the discount codes.

BTC Markets x Ticker News ‘Crypto Corner’ featuring Chris Berg.

In this episode, BTC Markets CEO Caroline Bowler interviews Professor Chris Berg, Director of RMIT Digital3 and Co-Founder of the Blockchain Innovation Hub at RMIT University. They discuss RMIT’s cutting-edge projects and the transformative impact of blockchain technology in Australia.

Watch now on YouTube or Ticker News.

Did you know…that BTC Markets has a Mobile App?

BTC Markets has a mobile app for iOS and Android, enabling users to trade crypto anytime, anywhere. Key features include:

• Quick and easy deposits: Deposit AUD via Osko PayID or direct deposit, and fund accounts with crypto from external wallets.
• Trading options: Use Simple Buy/Sell for quick transactions or Advanced Settings for limit, market, and stop limit orders.
• Price monitoring: Track cryptocurrency prices and market movements and personalise with the Watch List feature.
• Portfolio management: View portfolio holdings, values, trade history, and order status in real-time.
• Security: Secure access with a PIN or biometric security, maintaining the same high security standards as the web app, including 2FA, data encryption, internal controls, and cold wallet storage.

BTC Markets ensures a convenient trading experience through its mobile app.

Download the app from the Google or App store and start trading on the go today.

State of crypto

• US Fed Chair speech boosts crypto market amid anticipation of rate cuts.
• Bitcoin price drops as German government sells US$900M in BTC.
• Mt. Gox commences Bitcoin and Bitcoin Cash repayments.
• Bitcoin sell-off creates discount opportunities for ETF shares.
• US Ethereum ETFs nearing launch amid SEC progress.
• Australian digital asset manager, DigitalX to launch Bitcoin ETF on ASX.

US Fed Chair speech boosts crypto market amid anticipation of rate cuts.

Federal Reserve Chair Jerome Powell's recent remarks boosted price action in Tuesday’s trading session, as the S&P 500 and Nasdaq 100 reached new record highs, despite relatively quiet trading activity in the broader stock market.

Market participants expect the Fed to start decreasing interest rates in September, with another cut anticipated by the end of the year. The crypto market responded positively to Powell's comments, interpreting it as an indication that rate cuts are forthcoming. Bitcoin (BTC) rose 2.35% to US$58,500, Ethereum (ETH) gained 1.58% reaching US$3,006, Solana (SOL) increased by 1.15% to US$141, and XRP was up 0.93% to close the day at US$0.4356.

The total crypto market cap gained 1.95% as participants to remain on edge due to the impending repayments to Mt. Gox creditors, set to receive 14,000 BTC. Additionally, the German government's transfer of another US$900 million in Bitcoin has added to BTC's selling pressure. Despite this, Bitcoin ETF traders have capitalised on the dip, with nearly US$300 million in inflows, marking the highest net inflows since early June. BlackRock's BTC ETF saw almost US$190 million in inflows, while other ETFs like VanEck and Australian digital asset manager, DigitalX are also drawing significant interest.

Bitcoin price drops as German government sells US$900M in BTC.

On Monday, Bitcoin's price saw a decline following the German government's sale of over US$900 million worth of Bitcoin (BTC). Arkham Intelligence data reveals that German government wallets, which still hold around 23,788 BTC from a seized stash, transferred about 16,309 BTC to various exchanges and market makers. This move caused Bitcoin's price to drop by 3% to US$55,000, though it later recovered slightly to just above US$56,000, marking a 1.2% decline over 24 hours.

This sell-off comes amid a broader market context, with Bitcoin recently hitting its lowest price since February. Analysts attribute the downturn partly to increased supply hitting the market during the typically quieter summer season. The timing coincides with both German and U.S. governments liquidating seized assets, alongside repayments from the defunct Mt. Gox crypto exchange.

Since initiating the sale last month, the German government has sold off more than half of its initial 50,000 BTC holdings, reducing its stash to 23,788 BTC valued at US$1.3 billion.

Mt. Gox commences Bitcoin and Bitcoin Cash repayments.

The repayment process for creditors of the bankrupt Mt. Gox crypto exchange has finally begun, marking a significant milestone in the long saga since its collapse in 2014. Approved in November 2021, the rehabilitation plan is now in motion under the oversight of trustee Nobuaki Kobayashi.

Creditors, who have faced numerous delays, will receive compensation in Bitcoin (BTC) and Bitcoin Cash (BCH), among other assets. The total balance to be repaid amounts to approximately US$9 billion.

Bitcoin sell-off creates discount opportunities for ETF shares.

Bitcoin's recent sell-off, which saw prices drop to a four-month low of around US$53,500, could present a unique buying opportunity for Bitcoin ETF shares at discounted prices. This drop was driven by concerns over significant BTC liquidations by Germany’s government and the defunct Mt. Gox exchange.

Top Bitcoin ETFs, such as Franklin Templeton Digital Holdings Trust (EZBC), VanEck Bitcoin Trust (HODL), and iShares Bitcoin Trust (IBIT), which typically trade at premiums to their net asset value (NAV), may now offer NAV discounts due to ongoing market volatility.

The sustained selling pressure from these liquidations is expected to lead to wider ETF price swings, reminiscent of the Grayscale Bitcoin Trust (GBTC) discounts in late 2022.

Source: TheBlock.co

US Ethereum ETFs nearing launch amid SEC progress.

Bitwise's Katherine Dowling reports that eight US-based spot Ether exchange-traded funds (ETFs) are nearing launch, though specific dates are still unknown. She notes a reduction in issues during the SEC's review of S-1 filings, indicating progress towards approval.

SEC Chair Gary Gensler has suggested a summer launch timeframe, though interpretations vary. Dowling acknowledges delays following SEC approval of initial filings in May, with amended S-1 submissions in early July. Bitwise's Matt Hougan forecasts potential inflows of up to US$15 billion in the first 18 months, comparable to Bitcoin ETFs' early performance.

Dowling also reveals ongoing SEC discussions regarding non-Bitcoin and Ether products, indicating a receptive stance from regulators. Despite recent applications for Solana ETFs on behalf of VanEck and 21Shares, doubts persist about approval under Gensler's tenure, reflecting broader uncertainties in regulatory oversight, particularly under potential future administrations.

Australian digital asset manager, DigitalX to launch Bitcoin ETF on ASX.

DigitalX has secured regulatory approval to launch its spot Bitcoin exchange-traded fund (ETF) on the Australian Securities Exchange (ASX), marking a significant development in Australia's digital asset market. Scheduled to be listed under the ticker BTXX starting July 12 at 10 am local time, this ETF will be the second of its kind on the ASX, following VanEck's approval in June.

DigitalX partnered with K2 Asset Management to oversee the ETF's management and has engaged cryptocurrency-focused investment firm 3iQ for distribution across Australia and internationally.

CEO Lisa Wade hailed the approval as a "watershed moment," offering Australian investors regulated access to Bitcoin through a liquid fund structure. This move reflects growing interest and investment in digital assets within Australia, with other firms like Betashares also exploring Bitcoin ETF offerings on the ASX.

The weekly crypto close on Tradingview

The weekly trading stats as of Monday, July 8th at 10:00 am AEST, based on data from Tradingview in USD.

Crypto Fear& Greed Index

Source: alternative.me

The week ahead: economic events

July 11th: United Kingdom Monthly GDP MoM. United States Core Inflation Rate MoM, Core Inflation Rate, Inflation Rate MoM and Inflation Rate.

July 12th: China Balance of Trade. United States Producer Price Inflation MoM.

July 13th: United States Michigan Consumer Sentiment.

July 15th: China GDP Annual Growth Rate, Industrial Production and Retail Sales YoY.

July 16th: Germany ZEW Economic Sentiment Index. Canada Inflation Rate. U.S. Retail Sales.

July 17th: United Kingdom Inflation Rate. United States Building Permits.

July 18th: Japan Balance of Trade.

Source: trading economics

Market reflections

Overview

The Australian housing market surged in May with significant approval increases, while consumer sentiment dropped amid inflation concerns. Business confidence hit an 18-month high. US Fed Chair's remarks boosted market optimism. US added 206K jobs in June, with unemployment at 4.1%. China's inflation fell to 0.20% in June.

Australia

• The Australian housing market surged in May: significant rise in approvals.
• Consumer sentiment drops amid inflation; business confidence hits 18-month high.
• Australian home loans cool in May amid mixed regional trends and rising investment interest.
• Trade surplus narrows amid rising imports and surging exports to China.

Housing market surges in May: significant rise in approvals.

The housing market is showing strong growth, particularly in private sector dwellings excluding houses. Most states have seen an increase in approvals, reflecting robust demand and confidence in the housing market.

The variations in approval rates across regions highlight the diverse economic conditions and housing market dynamics within Australia. The notable rise in approvals for private sector dwellings excluding houses may lead to more multi-unit developments and higher density living arrangements.

Consumer sentiment drops amid inflation concerns; business confidence hits 18-month high.

The Westpac-Melbourne Institute Consumer Sentiment index dropped in July, marking a six-month low and reflecting increased consumer anxiety over persistent inflation and rising interest rates. This monthly decline contrasts with the rise in June, highlighting growing financial uncertainty among households.

In contrast, the NAB business confidence index surged in June, the highest level since January 2023, indicating a more optimistic outlook among businesses. The divergence suggests that while businesses are hopeful about long-term growth, consumers remain cautious due to immediate financial pressures.

Australian home loans cool in May, amid mixed regional trends and rising investment interest.

The value of new home loans for owner-occupied homes in Australia fell by 2.0% in May, indicating a cooling housing market that contrasts with the previous month’s growth and missed market expectations.

The decline in loans for construction and the purchase of existing and new dwellings points to reduced activity in these market segments. Geographically, the trend is mixed, with some states experiencing growth while others face declines.

Despite the monthly drop, the annual increase in new home loans suggests overall market growth over the year. Additionally, the rise in investment lending reflects continued interest in property investment, rebounding from the lows experienced during the COVID-19 pandemic.

Australia's trade surplus narrows amid rising imports and surging exports to China.

Australia's trade surplus on goods narrowed in April, attributed to imports growing at a faster rate than exports and coming in below market expectations. Exports to China surged by 15.8%, recovering from a 6.3% decline in April, highlighting the importance of China as Australia's largest trading partner.

Global

• US Fed Chair comments spark optimism in the market.
• US adds 206K jobs in June as unemployment rate rises to 4.1%.
• China's inflation rate hits new low as it drops to 0.20% in June.
• Germany’s trade surplus narrows in April as imports outpace exports.
• Canada’s economic growth surges despite rising unemployment.

United States

US Fed Chair comments spark optimism in the market.

Federal Reserve Chair Jerome Powell's recent comments have had significant implications for the markets, particularly the cryptocurrency sector. During his speech, Powell acknowledged some easing in inflation and reiterated the Fed's commitment to achieving a 2% inflation target. He also highlighted concerns that maintaining high interest rates for too long could impede economic growth.

Powell's statements and the upcoming testimonies from other Fed officials are expected to provide further insights into the Fed's economic and monetary policy outlook, continuing to influence market dynamics.

US adds 206K Jobs in June as unemployment rate rises to 4.1%.

In June, the US economy added 206K jobs, slightly below the downwardly revised figure for May but surpassing forecasts. Revisions for May and April showed significant adjustments which means that employment figures for April and May combined are 111k lower than previously reported.

The public sector, which includes government jobs, contributed significantly to job growth in June, with notable increases in local and state government employment. Additionally, sectors like health care, social assistance, and construction, which can include both public and private sector jobs, also saw job gains.

Conversely, the private sector faced challenges, as indicated by job losses in retail trade, manufacturing, and professional and business services. This suggests that while public sector employment and certain industries are expanding, other areas of the private sector are experiencing difficulties, leading to an overall mixed performance in the job market.

Despite the job gains, the unemployment rate rose to 4.1% in June, the highest since November 2021, up from 4% in May and above market expectations, that forecasted the rate to remain unchanged. June's figures indicate a strong, though cooling, labour market.

CHINA

China's inflation rate hits new low as it drops to 0.20% in June.

The inflation rate in China decreased to 0.20% in June from 0.30% in May, according to the National Bureau of Statistics of China. Historically, China's inflation rate has averaged 4.67% from 1986 to 2024, with a peak of 28.40% in February 1989 and a record low of -2.20% in April 1999.

This recent decline in the inflation rate suggests a period of price stability, contrasting with the more volatile inflation trends observed in past decades.

GERMANY

Germany’s trade surplus narrows in April as imports outpace exports.

Germany's trade surplus narrowed in April, as imports rose more significantly than exports, both reaching multi-month highs. Export growth was driven by increased shipments to the EU, Russia, and the UK, despite a decline in sales to the US. Imports saw notable increases from the EU and the UK, while purchases from China, the US, and Russia declined.

CANADA

Canada’s economic growth surges despite rising unemployment.

Canada's Ivey Purchasing Managers Index (PMI) surged in June, significantly exceeding market forecasts. This marks the eleventh consecutive month of economic growth and represents the second-highest figure in the current sequence. The increase was driven by rebounds in the inventories index and the supplier deliveries index. Despite these positive developments, the employment index declined, and price growth moderated. The unadjusted PMI also decreased slightly in the previous month.

The unemployment rate rose to 6.4% in June, up from 6.2% in May, marking the highest rate since January 2022 and surpassing market expectations of 6.3%. This increase aligns with the Bank of Canada’s stance that higher interest rates are significantly impacting the labour market, bolstering arguments for potential rate cuts to support the economy. Overall, the data suggests robust economic activity, even as certain areas, such as employment, face challenges.

Compliance conversations

Understanding the dynamics of a ‘rug pull’.

The financial markets are known for wild volatility and can be a breeding ground for unscrupulous individuals. One of the most infamous schemes in the finance space is a ‘pump and dump’ also known as a ‘rug pull’ in crypto.

In this section, we'll delve into what rug pulls are, how they work, and most importantly, how you can protect yourself from falling victim to them.

Read the full blog here.

The ASIC provides a checklist of common scams and ways to avoid them. To learn more, visit ASIC’s website.

Discover more on our ‘Compliance conversation’ blog page, where we share the latest updates on safeguarding against scams and protecting your assets. Stay informed and stay protected!

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Weekly prices are accurate as of 10:00 AM AEST on 08/07/2024.