Newsletter

Weekly Crypto Wrap: 16th May 2024

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Rachael Lucas
Weekly Crypto Wrap: 16th May 2024

TLDR

  • Render (RNDR) will be live on BTC Markets next Tuesday, May 21st.
  • Bitcoin surges to US$66k as soft U.S. inflation data sparks crypto rally.
  • Global investors continue to fuel spot-Bitcoin ETFs, amassing nearly US$12billion.
  • Blackrock nears top spot in Bitcoin fund market.
  • 2024-25 Federal Budget: relief for households and boost for economic growth.
  • U.S. CPI print comes in as expected as consumer sentiment hits six-month low.

BTC Markets announcements

New listing: Render (RNDR) will be live on BTC Markets next Tuesday, May 21st.

The next addition to the BTC Markets exchange, Render (RNDR) will be live on BTC Markets next Tuesday, May 21st. RNDR, a decentralised GPU rendering platform that empowers artists to enhance their rendering work using high-performance GPU nodes worldwide.

Utilising a blockchain marketplace for idle GPU compute, it allows artists to scale rendering tasks more efficiently and affordably compared to centralised GPU cloud services, resulting in significant cost savings and vastly improved rendering speeds.

Read more about Render (RNDR) on our blog and get ready to trade RNDR/AUD.

Stay updated on the latest developments regarding this listing by following us on X/Twitter or LinkedIn.

Ticker News ‘Crypto Corner’ with Real Vision's Chief Crypto Analyst, Jamie Coutts.

Real Vision’s Chief Crypto Analyst, Jamie Coutts catches up with BTC Markets CEO, Caroline Bowler in our latest episode of Ticker News. Tune in as they discuss the transformative shift in finance as crypto emerges as a new asset class. They investigate the growing significance of digital assets like Bitcoin and crypto exchange traded products (ETPs), which now have a market cap nearing US$100 billion.

Watch now on YouTube or Ticker News.

ICYMI: In our previous episode of ‘Crypto Corner,’ we were joined by Karen Cohen, Founder and Director of Emerging Tech Talent to talk about HR solutions for a rapidly changing tech landscape.

Watch now on YouTube or Ticker News.

CEO’s corner: Lisa Wade from DigitalX

Check out Caroline's one-on-one with Lisa Wade, CEO of DigitalX, as they discuss the approach of DigitalX towards real world asset tokenisation (RWA).

Watch the video here.

Mobile app: Fiat and crypto withdrawals are available.

Recently, we unveiled the latest update to our mobile app, introducing a convenient and secure feature for fiat and cryptocurrency withdrawals. This empowers users to effortlessly withdraw balances and track transfer statuses through a comprehensive history list.

This feature is now live in our latest release. Update your mobile app from the App Store (iOS) or Google Play Store (Android).Discover more about this exciting mobile app update here.

State of crypto

  • Bitcoin surges to US$66k as soft U.S. inflation data sparks crypto rally.
  • Global investors continue to fuel spot-Bitcoin ETFs, amassing nearly $12 billion.
  • Bitcoin mining difficulty drops to crypto winter lows.
  • Blackrock nears top spot in Bitcoin fund market.
  • Vanguard appoints Bitcoin-friendly ex-Blackrock executive as CEO.

Bitcoin surges to US$66k as soft inflation data out of the U.S. sparks crypto rally.

US core consumer prices rose in April, aligning with market expectations but slowing from the 0.4% increases seen in March and February. Crypto markets reacted positively, with Bitcoin gaining almost 7% overnight, reaching its highest price since April 24at US$66,666 before settling in the US$65,900 range.

The rally also saw Solana (SOL) and Near (NEAR) leading gains among major cryptocurrencies with increases of 8% and 12%, respectively. The data alleviated investor fears of reaccelerating inflation and potential Federal Reserve interest rate hikes.

Analysts noted that this marked the first decrease in CPI inflation in three months, signalling a bullish regime shift favourable for risk assets. Persistently high inflation had dampened expectations for U.S. rate cuts, adversely impacting risk-on assets such as cryptocurrencies. Recent U.S. inflation reports aligned with forecasts, further solidifying the outlook for sustained higher interest rates.

Meme stock rally bolsters crypto projects, driving significant gains.

Meanwhile, the recent rally in GameStop (GME) stock sparked a surge in meme coins PEPE, FLOKI, and MOG, each jumping as much as 30% following a post by @TheRoaringKitty. This echoes the 2021 DOGE rally linked to GME's surge.

Despite the recent surge in meme stocks like GameStop and AMC Entertainment, which are up over 160% in the past two days, Bitcoin's price has remained relatively stable, contrasting sharply with the 2021 scenario, where Bitcoin saw a significant rise alongside meme stocks, although its gains were more modest.

Economist Noelle Acheson stated that Bitcoin's stability amid the meme stock run indicates underlying macro pressures. It is increasingly seen as a store of value, with a broader holder base and institutional acceptance, driven in part by the launch of Bitcoin ETFs. Although Bitcoin rallied earlier this year, approaching US$73,000, it is now experiencing a period of consolidation, which could continue for several months amid macroeconomic challenges.

Coinbase outage causes temporary disruptions.

Additionally, Coinbase (COIN) experienced a three-hour outage on Tuesday, causing temporary disruptions. COIN shares fell 2.25% to $195, but Bitcoin's price remained unaffected. Coinbase assured users their funds were safe, though the cause of the outage was not disclosed.

Global investors continue to fuel spot-bitcoin ETFs, amassing nearly US$12 billion despite slowdown.

Investors continue to buy into spot-Bitcoin exchange-traded funds (ETFs), which have amassed nearly US$12 billion since January despite a slowdown in new investments.

Investors include the State of Wisconsin Investment Board, with a US$100 million stake in BlackRock’s iShares Bitcoin Trust (IBIT), and over 50 firms holding shares in Cathie Wood’s ARK 21Shares Bitcoin ETF (ARKB).

Among these, Boston-based Bracebridge Capital holds over US$307 million in ARK’s fund and around US$100 million in BlackRock’s. Other investors span globally, from Hong Kong’s Yong Rong HK Asset Management to Sydney’s Regal Partners and Canada’s Bank of Montreal.

Kansas-based United Capital Management’s CEO, Chad Koehn, stands out for his long-term commitment to Bitcoin, including early investments in the Grayscale Bitcoin Trust and ProShares Bitcoin Strategy ETF. Koehn views crypto as a hedge against traditional asset classes, undeterred by some criticism from his peers.

Bitcoin mining difficulty drops to crypto winter lows.

Last week, Bitcoin mining difficulty decreased by approximately 6%, marking the most substantial decline since crypto winter in December 2022, according to a Bernstein report. This drop benefits low-cost miners, as higher-cost equipment shuts down due to lower Bitcoin prices and rising costs post-halving.

Consequently, the hashrate has decreased, allowing the top three listed miners to increase their market share by nearly 20 basis points. Riot Platforms and CleanSpark, with their low production costs and strong financial positions, are expected to continue expanding their market share. Bernstein anticipates Bitcoin's price to remain range-bound, potentially breaking out once institutional funds increase their allocations.

Blackrock nears top spot in Bitcoin fund market.

BlackRock is on the verge of becoming the world’s largest Bitcoin fund manager, with its spot Bitcoin ETF amassing US$16.7 billion in assets since its launch, trailing Grayscale by less than US$1 billion. The ETF’s rapid growth marks a significant shift for BlackRock, which previously viewed Bitcoin sceptically.

Driven by rising client interest, BlackRock has also launched the fastest-growing tokenised Treasury fund. This growing confidence in digital assets is highlighted by their strategic investments and new product offerings. The move signifies BlackRock’s commitment to leveraging blockchain technology and expanding its presence in the cryptocurrency market.

Spot Bitcoin ETF Total Net Flows

Source: TheBlock.co

Vanguard appoints Bitcoin-friendly ex-Blackrock executive as CEO.

Vanguard is set to name former BlackRock executive Samil Ramji as its new CEO, marking a significant shift for the traditionally anti-crypto firm. Ramji, who oversaw the launch of BlackRock’s iShares Bitcoin Trust, departed BlackRock in January seeking new leadership opportunities. His appointment has sparked speculation about Vanguard’s future stance on digital assets, given his known interest in the industry.

Ramji expressed his commitment to guiding Vanguard through the evolving investor landscape, emphasising the firm’s mission to enhance investment success. His background and previous statements on blockchain technology suggest potential openness to integrating crypto offerings at Vanguard.

Ramji’s appointment, confirmed by Vanguard, represents the first time the company has hired a CEO from outside the organisation, underscoring the significance of this leadership change.

The weekly crypto close on Tradingview*

The crypto market saw a widespread decline, with most major assets in the red.

While Litecoin (LTC) showed a slight increase of 0.05%, other assets experienced varying degrees of losses.

Solana (SOL), Bitcoin (BTC), Cardano (ADA), Chainlink (LINK), Ripple (XRP), and Ethereum (ETH) all saw single digit decline.

Overall, the total crypto market capitalisation decreased by 4.09% over the week, closing at a valuation of US$2.203 trillion.

Weekly crypto close

*The weekly trading stats as of Monday, May 13th at 10:00 am AEST, based on data from Tradingview in USD.

Year-to-date in the crypto space from TradingView*

The year-to-date performance summary for selected cryptocurrencies is as follows:

  • Bitcoin (BTC) leads with an impressive gain of 56.31%.
  • Solana (SOL) follows closely behind with a solid increase of 55.77%.
  • Ethereum (ETH) shows resilience with a gain of 33.01%.
  • Litecoin (LTC) holding onto a gain of 13.44%.
Year to date

*Year-to-date performance as of Thursday, May 16th at 10:00 am AEST approximately. Based on data from Tradingview in USD.

Crypto Fear& Greed Index

Fear & Greed Index

Source: alternative.me

The week ahead: economic events

May 16th: United States Building Permits.

May 17th: China Industrial Production and Retail Sales YoY.

May 20th: United States Fed Funds Interest Rate.

May 21st: Australia Consumer Confidence MoM and Interest Rate. Canada Inflation Rate.

May 22nd: Japan Balance of Trade. United Kingdom Inflation Rate.

May 23rd: United States Fed Funds Interest Rate.

Source: Economic Calendar

Market reflections

Overview

The 2024-25 Federal Budget was released this week and aims to provide relief for households and stimulate economic growth, with key policies focusing on solar, healthcare, and energy rebates. April's mixed business confidence suggests a gradual inflation outlook. US core consumer prices continue to rise, while consumer sentiment hits a six-month low, potentially prompting the Federal Reserve to tighten monetary policy. China's trade surplus has decreased due to surging imports and rising inflation, and Japan's GDP contracted in Q1, exceeding market expectations. The Bank of England has held rates steady amid growth and inflation adjustments, while Germany's economic confidence reached a two-year high. Meanwhile, Canada's unemployment rate remains steady at 6.1%, bolstered by significant job gains.

Australia

  • 2024-25 Federal Budget: relief for households and boost for economic growth.
  • Key policy announcements include solar, health care and energy rebates.
  • Mixed business confidence in April signals gradual inflation outlook.

2024-25 Federal Budget overview.

The 2024-25 Federal Budget focuses on cost-of-living relief, economic growth, and targeted investments, offering energy rebates, rental assistance, and healthcare savings. Its aim is to support households and businesses, while forecasting increased deficits, aiming to balance immediate financial relief with long-term economic stability.

Key policy announcements.

The Future Made in Australia Program invests in solar panel manufacturing in the Hunter Valley and quantum computing, whilst the small business instant asset write-off is extended to approximately 4 million businesses.

A $3.4 billion health package will fund new PBS medicines and freeze medicine prices for one year for all individuals and five years for pensioners. The education sector benefits from $3 billion in HECS debt cuts, and a new student cap based on university accommodations.

Additionally, $3.5 billion is allocated for power bill rebates, providing $300 quarterly instalments to households and $325 to small businesses. Rental assistance increases by 10%, benefiting nearly one million households, and wage increases are funded for the aged-care and childcare sectors.

Budget forecast.

Despite additional spending and lower commodity prices, the budget surplus of $9.3 billion in 2023-24 is expected to shift to deficits of around $28.3 billion in 2024-25 and nearly $43 billion in 2025-26. Election-related spending remains a risk, but Australia’s debt position remains low by international standards.

Alan Oster, NAB's Chief Economist, highlighted the interventionist nature of the budget: "The budget is much more interventionist in its strategy – aiming to boost growth in critical areas and directly easing cost of living pressures."

Economic outlook and implications.

The budget's policy loosening is expected to have a marginal impact on inflation and growth outlook. Treasury and NAB forecasts for GDP growth and unemployment are closely aligned, though NAB is slightly more cautious about the short-term outlook.

  • GDP growth: Treasury expects 2% in 2024/25 and 2.3% in 2025/26; NAB forecasts 1.9% and 2.3%, respectively.
  • Unemployment: Both Treasury and NAB see unemployment peaking around 4.5% by mid-2024.
  • Inflation: The budget forecasts a quicker improvement in inflation than NAB or the RBA, expecting 2.75% by mid-2025, compared to NAB’s 3.0% and RBA’s 3.2%.

Alan Oster further commented, "The budget forecasts a more rapid improvement in inflation in the near term than we or the RBA have been expecting," reflecting the impact of energy and rent subsidies.

What this means for Australians.

The budget focuses on reducing living costs and boosting economic growth through energy rebates, affordable medicines, increased rental assistance, and support for education and small businesses. Measures include $300 quarterly energy rebates, PBS medicine cost freezes, HECS debt cuts, and extended small business asset write-offs.

While there are concerns about increasing deficits, the governments strategic investments are aimed to stimulate the economy and provide immediate relief to Australians, aiming for a balanced approach to fiscal management and economic recovery.

Mixed business confidence in April signals gradual inflation outlook.

In April, NAB’s Business Confidence Index remained below its long-term average, indicating ongoing uncertainty. Sentiment weakened in retail, wholesale, and mining, but improved in recreation, personal services, construction, and manufacturing.

Business conditions fell in March, with declines in sales and employment, though profitability was stable. Forward orders dropped, especially in mining, manufacturing, and construction.

NAB's chief economist, Alan Oster, noted signs of slowing activity and easing costs, suggesting a gradual inflation outlook, though the pace remains uncertain.

This indicates businesses are facing mixed conditions with some sectors improving, while overall growth and cost pressures are slowing, impacting inflation trends.

Global

  • U.S. core consumer price increases, as consumer sentiment hits six-month low.
  • Rising inflation pressures could prompt U.S. Fed to tighten monetary policy.
  • China’s trade surplus decreases amid surging imports as inflation rate rises.
  • Japan's GDP contracts in Q1, surpassing market expectations.
  • The Bank of England holds rates steady, amid growth and inflation adjustments.
  • Germany’s economic confidence hits two-year high.
  • Canada unemployment rate remains steady at 6.1% amid significant job gains.

U.S. core consumer prices increase in April, aligning with market expectations.

In April, US core consumer prices, excluding food and energy, rose by 0.3% from the previous month, aligning with market expectations but slowing from the 0.4% increases seen in March and February.

Prices for new vehicles fell for the third month in a row and used car prices dropped for the second month. Shelter prices rose and transportation services increased, though this was a slowdown from the previous month's rise.

On an annual basis, core inflation eased to 3.6%, the lowest in three years, largely due to a 5.5% increase in the shelter index, which was down from 5.7% in March.

Other significant annual price increases included motor vehicle insurance, which saw a surge of 22.6%, medical care, personal care, and recreational costs.

The annual inflation rate decreased to 3.4% in April from 3.5% in March.

Commenting on the economic data, Christopher Rupkey, chief economist at FWDBONDS, stated, "The economic data are picture perfect in favor of interest rate cuts. The country is not out of the woods from the threat of inflation, but we can start to see the end of the forest."

Additionally, Dan North, senior economist at Allianz Trade North America, noted, "This is the first print in a month that wasn’t hotter than expected, so there’s a relief rally."

Retail sales remained flat, contrary to market expectations of an increase, reflecting ongoing economic uncertainties.

Rising inflation pressures could prompt U.S. Fed to tighten monetary policy.

In April, US factory gate prices rose by 0.5% month-over-month, exceeding expectations of a 0.3% increase, after a revised 0.1% decline in March. Service prices jumped, driven by a rise in portfolio management costs and gains in various sectors, while goods prices rebounded, mainly due to a surge in petrol costs.

Core producer prices, excluding food and energy, rose by 0.5%, higher than the forecasted 0.2%. Year-over-year, headline producer price inflation remained steady at 2.2%, with core inflation climbing to 2.4% from a revised 2.1%.

Rising inflationary pressures may influence the Federal Reserve's monetary policy, as increased producer prices could lead to higher consumer prices, thereby affecting purchasing power and spending. This could result in tighter US monetary policies, which might raise global interest rates and impact international trade.

U.S. consumer sentiment hits six-month low, amid rising inflation concerns.

Consumer sentiment in the U.S. has dropped to its lowest level in six months, amid rising short-term and long-term inflation expectations. Concerns about inflation, unemployment, and interest rates are negatively impacting consumer confidence and spending.

In May, the University of Michigan consumer sentiment index dropped to 67.4 from April's 77.2, marking the lowest level in six months and falling short of market expectations of 76. The one-year inflation expectation rose to 3.5%, the highest in six months, up from 3.2% in April. The five-year inflation outlook increased to 3.1%, also the highest in six months, compared to 3.0% previously.

Both current conditions (68.8 vs. 79 in April) and future expectations (66.5 vs. 76) declined. Consumers expressed concerns about inflation, unemployment, and interest rates for the coming year.

China’s trade surplus decreases amid surging imports in April.

China's trade surplus decreased to US$72.35 billion in April. This decline was driven by a modest 1.5% growth in exports, while imports surged by 8.4%. However, China's trade surplus with the United States increased to US$27.2 billion, reflecting a significant rise from the previous month's US$22.94 billion.

Inflation rate rises to 0.3% driven by non-food costs.

China's annual inflation rate rose to 0.3%, primarily driven by non-food costs in April. Non-food inflation reached 0.9%, with significant increases in prices for clothing, housing, health, and education. Conversely, food prices declined for the 10th consecutive month, dropping by 2.7%.

Japan's GDP contracts in Q1, surpassing market expectations.

Japan's GDP shrank by 0.5% quarter-on-quarter in Q1 2024, surpassing market expectations of a 0.4% decline and following a revised stagnation in the previous quarter, according to flash estimates.

Private consumption, which represents over half of the economy, fell for the fourth consecutive quarter by 0.7%, a sharper decline than the forecasted 0.2%, marking the steepest drop in three quarters. This decline is attributed to high living costs, sluggish wages, and the aftermath of a quake in the Noto peninsula.

Capital expenditure also fell by 0.8%, against an expected 0.7% decrease, primarily due to reduced auto production following a scandal at Toyota's subsidiary, Daihatsu Motor. Net trade negatively impacted GDP, with exports decreasing by 5.0%, more than imports' 3.4% decline. Conversely, government spending increased by 0.2%, recovering from a previous 0.2% decrease.

The Bank of England holds interest rates steady, amid growth and inflation adjustments.

In May, the Bank of England maintained the key bank rate at 5.25%, the highest since 2008. Despite lowering inflation forecasts, officials improved the growth outlook, projecting a rate decline to 3.75% by the forecast period's end.

The UK economy grew by 0.6% quarter-on-quarter in Q1, exceeding the 0.4% forecast, driven by a 0.7% rise in services and an 0.8% increase in production, while construction contracted.

The unemployment rate rose to 4.3% from January to March 2024, the highest since mid-2023, with 46,000 more unemployed, totalling 1.49 million, despite a 17,000 increase in employment to 33.0 million.

Germany’s economic confidence hits a two-year high.

In May, the ZEW Indicator of Economic Sentiment for Germany rose to the highest level since February 2022, surpassing forecasts.

The current conditions subindex also improved, which marks the tenth consecutive month of rising confidence among financial experts, driven by signs of economic recovery in Germany and stronger-than-expected GDP growth in Q1.

Additionally, improving economic conditions in the Euro Area and China have contributed to a better outlook. Expectations for domestic consumption, as well as the construction and machinery sectors, have seen substantial increases.

Canada unemployment rate remains steady at 6.1%, amid significant job gains.

In April, Canada's unemployment rate held steady, matching the two-year high from the previous month and slightly below market expectations of 6.2%.

Despite the stable rate, the number of unemployed individuals increased, with significant rises among youth and older populations, which offset a slight decrease in the core working age group.

The net employment surged, marking the sharpest increase in 15 months and significantly exceeding market estimates.

This substantial rise in employment contrasted with the relatively high unemployment rate and a slowdown in average wage growth to 4.8% from 5% in March, tempering the immediate need for a rate cut by the Bank of Canada.

Crypto news

Lightning Labs test transaction paves way for stablecoins on Bitcoin blockchain.

Lightning Labs, the developer behind Bitcoin's Lightning Network, is exploring the integration of stablecoins onto the Bitcoin blockchain. CEO Elizabeth Stark announced at the Financial Times Crypto and Digital Assets Summit that they conducted a test transaction using the Taproot Assets protocol, showcasing the potential for stablecoins on Lightning. Stark emphasised the practical application of their technology, aiming to address real-world problems like cross-border transactions and financial inclusion rather than meme coins or gambling.

Stark highlighted a resurgence of developer interest in Bitcoin post-halving, with projects like decentralised finance (DeFi) and bitVM, which facilitates Turing-complete Bitcoin contracts (complex computations that need to be solved). She emphasised Lightning Labs' mission to enable global transactions without borders, envisioning a future where sending value across the world is as seamless as sending an email or text message. Stark also referenced an IMF report indicating Bitcoin's growing role in remittances and circumventing capital controls in emerging markets, underscoring its significance as a financial lifeline in regions plagued by hyperinflation and authoritarian regimes.

Trade BTC/AUD on BTC Markets.

Vitalik Buterin proposes Ethereum gas model overhaul with EIP-7706.

Vitalik Buterin, co-founder of Ethereum, proposes EIP-7706, aiming to refine Ethereum's gas model. Currently, Ethereum transactions incur gas fees for execution and storage.

However, EIP-7706 suggests adding a third type of gas fee specifically for call data, the crucial information sent to smart contracts during transactions. This proposal aims to differentiate the costs associated with executing contract code, storing data, and transmitting call data.

Buterin advocates for the unified approach to managing all gas fees and recommends a dynamic fee adjustment model. Implementing a separate gas fee for call data could significantly reduce the theoretical maximum call data size per block and lower average call data costs, according to economic analysis.

Trade ETH/AUD on BTC Markets.

GME memecoin surpasses US$100 million market cap amidst trading frenzy.

GME, an unofficial parody memecoin on the Solana blockchain, has achieved a market capitalisation surpassing US$100 million amid a trading frenzy. Within the past week, GME memecoin has soared by 2,291%, reaching a trading price of US$0.01449 per coin.

GME, while inspired by GameStop, is unrelated to the retailer. This surge seems to be fueled by the increased attention from investors in GameStop Corp shares, which have surged by 228% in the last five trading days on the New York Stock Exchange.

The GME memecoin's listing on centralised exchanges sparked buying. Keith Gill's return led to another GameStop short squeeze, with shares rising by 111%. GameStop's CEO, Ryan Cohen, gained US$1 billion from the squeeze. Memecoin hysteria also affected other coins like Pepe (PEPE) and Dogwifhat (WIF).

ZachXBT highlighted on April 24 that 12 Solana memecoins raised US$26.7 million but were abandoned. The costliest among them was "I like this coin," with the ticker LIKE.

Buy SOL/AUD on BTC Markets.

Regulation roundup

Harvest eyes mainland China access for Bitcoin ETF via ETF Connect.

The CEO of Harvest, issuer of a spot Bitcoin exchange-traded fund (ETF) in Hong Kong, aims to extend accessibility to mainland Chinese investors. Han Tongli is exploring avenues to enable mainland investors to buy Harvest's Bitcoin and Ethereum ETFs through Hong Kong's ETF Connect framework.

ETF Connect, launched in 2022 with approval from both Chinese and Hong Kong regulators, facilitates interaction between the two markets, offers diverse asset choices, and enhances liquidity.

Harvest won't rule out applying for its ETFs to be included in ETF Connect in the next two years if everything progresses smoothly, according to Han.

The potential inclusion of Bitcoin and Ethereum ETFs in the ETF Connect program could significantly boost cryptocurrency markets due to China's substantial investor base. However, it remains uncertain whether the Chinese government would embrace this opportunity, given their historically stringent stance on cryptocurrencies like Bitcoin.

Hong Kong's Bitcoin and Ethereum futures-based ETFs, launched in 2022, have not been integrated into Stock Connect. The potential for Hong Kong to offer mainland Chinese investors a Bitcoin ETF was a significant issue even before the launch of Bitcoin and Ethereum ETFs in Hong Kong on April 30.

Industry analysts had low expectations for the impact of Bitcoin and Ethereum ETFs in Hong Kong due to its smaller market size compared to the US and mainland China. Some Hong Kong-based subsidiaries of mainland Chinese companies hold 1,400% more assets in China than locally. All Hong Kong ETFs combined should represent 0.6% of the US ETF market.

Compliance conversations

Bitcoin trader loses nearly US$70 million in address scam.

Thieves execute address-poisoning scams by creating fake accounts of victims' crypto addresses, sending them a small amount of currency in hopes of tricking them into sending money to the spoofed address later. Blockchains' public nature makes it easy for scammers to find targets.

CertiK detected a US$69.3 million Bitcoin transfer linked to this scam, resulting in a 97% loss for the victim's Coinbase wallet, now valued at just over US$1.6 million. PeckShield revealed that the scammers converted the stolen Bitcoin into 23,000 Ethereum, and then transferred the funds.

Trezor advises users to double-check every address before sending a transaction and avoid copying addresses from transaction history to prevent falling victim to address scams. They recommend sending a small test transaction before larger transfers to verify the address.

One study highlighted "pig butchering" scams, which cost investors US$75 million from 2020 to 2024. These scams typically begin with criminals sending wrong-number texts to build trust with victims.

Scammers use "pig butchering" schemes, where they send small payments to gain victims' trust, then trick them into fake crypto investments, disappearing once large sums are sent.

According to the U.S. Federal Trade Commission (FTC), most cryptocurrency fraud involves scammers enticing victims into unrelated scams and demanding payment in bitcoin to evade detection. The FTC advises scepticism toward individuals who exclusively accept crypto payments or promise significant profits on suspicious investments. They caution against investment scams, where scammers impersonate various entities like businesses, government agencies, or even romantic interests to deceive victims.

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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Disclaimer: The information provided on this page is issued by BTC Markets Pty Ltd (BTC Markets, we, us, our). The information is general only and is not intended to constitute an opinion or recommendation with respect to its contents. Past performance is not a reliable indicator of future performance. Any reference to past performance is intended to be for general illustrative purposes only. The information cannot be relied upon for any purposes and is not intended to be a substitute for professional advice.

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Weekly prices are accurate as of 10:00 AM AEST on 13/05/2024.

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