- Bitcoin gains 6% in a day to break through US$37,000.
- Crypto rally continues as year-to-date inflows hit US$1.1bn.
- Australia to impose capital gains tax on wrapped crypto.
- ETH holds steady at US$2,000, largest inflows since 2022.
- SOL sees staggering year-to-date gains of 553%.
- Fake BlackRock filing triggers XRP price action.
BTC Markets announcements
OTC Desk trading update.
Last week we saw continued signs of strength across the crypto market with BTC closing the week another 8.6% against AUD, 5.8% on the USD. ETH boasting an impressive 10.8% against AUD, 8% on USD.
As BTC's dominance experienced a slight cool off from its' recent high of 54% (as reported by TradingView) - it has allowed money to flow down to assets such as AVAX, up 53%, as well as SOL and LINK, both locking in significant gains and climbing over 35% on the week.
Even by crypto standards, that is impressive price action. Read the full update here.
The Bitcoin halving: A countdown to April 2024.
The Bitcoin halving, a programmed and integral event in the cryptocurrency's protocol, occurs approximately every four years, specifically every 210,000 blocks. During this event, the reward that miners receive for validating transactions and securing the network is halved.
This scarcity mechanism is designed to control the issuance of new Bitcoins, contributing to the overall fixed supply limit of 21 million coins. The halving events, marked by a reduction in the rate at which new Bitcoins are created, have historically played a pivotal role in Bitcoin's market dynamics. Read the full explainer here.
We're getting excited for the Crypto Assembly event, brought to you by Blockchain APAC.
Amidst the backdrop of the recent Australian Treasury's announcement on proposed crypto regulations for local exchanges, engaging in discussions with the government has taken on paramount importance. At BTC Markets, we jumped at the chance to be a foundational sponsor for the upcoming Blockchain APAC Crypto Assembly event, scheduled for November 23rd - 24th in Sydney.
As active contributors to the conversations that are shaping the crypto industry, we firmly uphold our commitment to support its continued growth and advancement. This sponsorship signifies our unwavering dedication to educating industry stakeholders and users, facilitating vital discussions on regulatory matters, and actively participating in the formulation of legal frameworks that benefit all participants in this ever-evolving landscape.
Join us and other prominent figures in the industry as we share our wealth of experience, expertise, and unyielding passion for blockchain and cryptocurrencies. For detailed information and registration, please visit the event page.
State of crypto
- Alt rally gains traction following positive news out of the U.S. on inflation.
- AVAX, SOL and COMP spearhead alt coin surge, achieving double-digit daily gains.
- Analysts project a 90% approval of a spot Bitcoin ETF by Jan 2024.
- XRP sees 13% price surge, fuelled by a misleading report on BlackRock filing.
- The CEO of Ark Invest anticipates US$25 trillion crypto market cap by 2030.
What has triggered this morning’s resurgence in crypto price momentum?
While there isn't a singular catalyst, several factors contributed, including lower-than-expected US inflation, a delayed but noticeable sector rotation from equities to crypto assets, profits from altcoins flowing into Bitcoin, sustained optimism as the ETF approval date approaches, heightened investor focus on the crypto market, and upward price pressure driven by short liquidations. Notably, at 5am AEST, Bitcoin experienced a 2.46% price surge, coinciding with the liquidation of shorts totalling US$47 million, as reported on Coinglass.
The traditional stock markets experienced a rally yesterday following the unexpected positive news about the slowdown in US inflation. The S&P and NASDAQ saw daily gains of 1.91% and 2.13%, respectively. Yet, this momentum failed to extend to the leading cryptocurrencies during yesterday’s trading session, with Bitcoin (BTC) and Ether (ETH) maintaining only marginal gains. The market's focus appeared to be distinctly directed towards the altcoin sector, which continues to dominate.
AVAX closed up 21.41%, SOL gained 15.21%, and newcomer COMP surged by 10.81% on the day.
Following a four-week surge in the cryptocurrency market that witnessed Bitcoin gaining 28.47% throughout October, there was an anticipation among market participants for a price retracement. Despite this, market analysts maintain an optimistic outlook, expressing confidence in potential further upside once a spot Bitcoin ETF receives approval.
Bloomberg Intelligence analysts indicate that the Securities and Exchange Commission (SEC) has a brief window until this Friday to potentially approve all 12 spot Bitcoin (BTC) ETF applications for the current year. They anticipate the SEC could grant approval for all 12 applications, with approval orders expected to be issued by November 17. The analysts express confidence that even if the SEC opts for another delay during this timeframe, there is still a 90% probability of at least one spot Bitcoin ETF receiving approval by January 10, 2024.
This week’s retracement has caught the crypto bulls off guard, leading to over US$300 million in liquidations of leveraged crypto long positions. This marks the largest daily leveraged long liquidation since August. Bitcoin and Ether traders were particularly affected, with US$133 million and US$70 million in liquidations, respectively.
On Monday, a fake news event led to a significant price pump in XRP. A false report about BlackRock filing for an XRP trust in Delaware resulted in a 13% surge in price, only to be revealed as inaccurate within hours.
Looking to the CoinShares weekly funds report, it revealed a third consecutive week of strong inflows, totalling US$1.14 billion year-to-date. Most of these inflows were directed towards Bitcoin funds, signalling sustained investor interest. Additionally, Ethereum funds saw positive traction for the second consecutive week, indicating a positive shift in sentiment towards the asset.
Cathie Wood, CEO of ARK Invest, shared her insights on the crypto market's future during a CNBC interview. Wood expects the crypto market to grow from a little over US$1 trillion today to US$25 trillion in 2030. She emphasises the global nature of this opportunity, highlighting the role of clear U.S. regulations and increasing adoption by financial institutions.
Wood's optimism is anchored in the growth of Bitcoin and Ethereum, foreseeing them dominating the crypto asset ecosystem. She sees crypto as a new asset class offering diversification and serving as a hedge against both inflation and deflation.
Crypto market sentiment has soared further into the Greed zone, currently sitting at 70 on the Crypto Fear & Greed index, up from 60 yesterday.
The weekly crypto close.
Moving onto the weekly crypto close, we witnessed a sector rotation occurring, redirecting attention from market majors to alternative crypto assets. Avalanche (AVAX) emerged as the best performer, showcasing a substantial 53.68% increase, and closing the week at US$18.98.
Solana (SOL) followed suit, registering an impressive gain of 36.77% and closing at US$56.28. Chainlink (LINK) demonstrated a similar uptrend with a 31.02% gain, reaching a closing value of US$16.025, while Polkadot (DOT) experienced a 19.89% increase, closing the week at US$5.709.
Cardano (ADA) showed a gain of 12.14%, closing value of US$0.3834. Ethereum (ETH) observed an 8.09% uptick, closing at US$2,044.68, and Bitcoin (BTC) recorded a 5.86% gain, concluding the week at US$37,064.13.
Lastly, we saw Litecoin (LTC) close at US$74.88, reflecting a 4.58% increase, while XRP closed at US$0.6613, and barely in the green with a 0.09% increase on the week.
Bitcoin's dominance experienced its second consecutive weekly decline, registering a 1.11% decrease during the last trading week. Despite this decline, Bitcoin maintains a dominant position, closing at 52.34% for the week.
Concurrently, the total cryptocurrency market capitalisation reached a peak of US$1.408 trillion, concluding four consecutive weeks in positive territory with a 7.02% gain throughout the week, ultimately closing at US$1.384 trillion.
Year-to-date in the crypto space.
Over the past year, several popular cryptocurrencies have experienced significant growth in their values. Notably, Solana (SOL) skyrocketed by an impressive 557%, showcasing its strong market performance.
Chainlink (LINK) followed suit with a substantial increase of 162%, while Bitcoin (BTC) demonstrated resilience and growth, boasting a notable ascent of 128%.
Other noteworthy performers include Avalanche (AVAX) with a gain of 90%, XRP (XRP) showing a considerable increase of 90.59%, Compound (COMP) and Ethereum (ETH) both displaying solid performances with gains of 87.66% and 73%, respectively. Cardano (ADA) experienced growth at 55.21%, and Litecoin (LTC) recorded a modest yet appreciable 5.66% increase in value over the evaluated fiscal year.
*The weekly trading stats as of Monday, November 13th at 11:00 am AEDT, based on data from Tradingview in USD.
**Year-to-date performance as of Thursday, November 16th at 11:00 am AEDT, based on data from Tradingview in USD.
Solana sees staggering year-to-date gains of 553%.
Solana (SOL) achieved new yearly highs this week, witnessing an impressive surge amid the ongoing altcoin rally. The bullish sentiment surrounding Solana was amplified by renowned tech investor Cathie Wood, the CEO of Ark Invest.
Wood's optimistic comments on Solana's network capabilities contributed to the substantial price increase. The token once again asserted its dominance among blue-chip cryptocurrencies, outpacing its counterparts with an 15% rise in Wednesday’s trading session.
In the broader context, Solana has demonstrated remarkable strength, surging by 69% in the past month and over 553% in the last year. Analysts view this surge as a correction following an extended undervaluation period post the FTX collapse in November 2022, solidifying Solana's position as a top-performing digital asset in the cryptocurrency market.
Buy Solana on BTC Markets.
Bitcoin surges 6% as crypto inflows exceed US$1.1b.
Bitcoin surged by 6% to surpass a key resistance level at US$37k, fuelled by a wave of crypto inflows surpassing US$1.1 billion. The rally was particularly evident on Wednesday with a single-day gain of 6%.
Amidst this upward momentum, Bitcoin miners are capitalising on the favourable market conditions, racing to secure profits before the anticipated "halving" in April 2024. This event, reducing rewards for producing Bitcoin by half, has spurred miners to intensify their efforts, evident in the record-breaking hash rate reaching an all-time high.
Despite the increased profitability for miners, the industry is still navigating challenges, with some exploring strategic shifts such as relocating operations to regions with more affordable energy.
Buy Bitcoin on BTC Markets.
Ethereum holds steady at US$2,000 after largest weekly inflows since 2022.
The bullish momentum of the past month has seen the price of ETH appreciate over 32%, reaching highs above US$2,050. Ethereum outperformed Bitcoin last week, with an 8% rise in value following the largest weekly inflows into ETH products since August 2022, largely attributed to the anticipated launch of an Ethereum exchange-traded fund (ETF) by investment giant, BlackRock.
This week, the US Securities and Exchange Commission announced it would delay its decision regarding Grayscale’s Ethereum Futures ETF application, extending the deadline to ensure it has, “sufficient time to consider the proposed rule change and the issues raised therein”.
ETH has maintained its position hovering around the US$2,000 mark, despite retractions nearing support level, and its market capitalisation stands at approximately US$247.3billion. Investors and traders are keeping a close eye on Ethereum's performance this week, with hopes for the second largest cryptocurrency to reach its next resistance level of US$2,150.
Buy ETH on BTC Markets.
Crypto revealed as second most popular investment asset in France.
New survey data, published by France’s principal financial regulator, the Autorité des Marchés Financiers (AMF), reveals that cryptocurrencies are the second most popular type of investment asset among the adult French population.
According to the survey, conducted by the Organisation for Economic Co-operation and Development (OECD), 9.4% of the French population holds crypto assets. This percentage is only slightly lower than those holding real estate funds (10.7%), the most popular type of investment asset.
The study also assessed a category of "new investors", those who have made investments for the first time after the COVID-19 pandemic began. With an average age of 36 compared to 51 for traditional investors, new investors are majority male (64%) and notably younger. 54% of those in this category own crypto assets.
With a GDP of approximately US$2.94 trillion in 2021 and an estimated US$2.63 trillion in 2022, France is the world's seventh-largest economy and Europe's third-largest economy after Germany and the UK. In 2023, the population of France stands at 64.75 million people.
The French government has hopes to establish France as a leader in digital assets within Europe. In August, the AMF amended its registration requirements for crypto firms to better align with the EU's new Markets in Crypto Assets (MiCA) regulations, actively pursuing companies to register in France.
Fake BlackRock filing triggers XRP price action.
XRP, the fifth largest cryptocurrency, is bouncing back after Monday’s brief rise and fast fall following speculations of a BlackRock exchange-traded fund (ETF) filing, which was in fact, fake news.
On Monday, an application titled "BlackRock iShares XRP Trust" was filed in the state of Delaware. If real, it could potentially signal a forthcoming XRP ETF filing from BlackRock, the world’s largest asset manager. As rumours of the fake application broke on X (formerly Twitter) the price of XRP soared 12% in 30 minutes, briefly touching highs of US$0.748.
However, once the document was confirmed to be a hoax, XRP's price fell back to its pre-news level, lingering around US$0.65. According to reporting from Bloomberg, the Delaware Office of the Secretary of State has informed the state Department of Justice about the bogus filing.
Fake news has become a serious challenge across the world in the last decade, and with crypto investors and traders increasingly looking to platforms such as X (formerly Twitter) to gauge market sentiment, it can have major implications. In October, a false report about the SEC having approved BlackRock’s Bitcoin ETF application caused the price of BTC to gain 10% before retracing.
To learn more about how to protect yourself against fake news, visit our Compliance Conversations page.
Buy XRP on BTC Markets.
The week ahead: Upcoming economic events
November 16th: Japan’s Balance of Trade.
November 17th: UK Retail Sales. US Building Permits.
November 21st: Reserve Bank of Australia Meeting Minutes. Canada’s Inflation Rate.
November 22nd: US FOMC Minutes and Durable Goods Orders.
Economic Calendar (tradingeconomics.com)
- US inflation data raises hopes for the RBA to follow the Fed’s rate hold.
- Consumer confidence hit a four-month low following the RBA’s rate hike.
- Heightened borrowing costs resonated negatively with homeowners.
- NAB Business Survey reveals a persistent low level of confidence.
Australian consumer confidence took a notable downturn, reaching its lowest point in four months during November. This decline was precipitated by the Reserve Bank's decision to implement another interest rate increase.
The news of heightened borrowing costs resonated negatively with homeowners, impacting their financial outlook, and casting a shadow over spending plans. The ANZ-Roy Morgan Consumer Confidence index witnessed a 3.5-point plunge to 74.3 in the wake of the Reserve Bank's move to raise interest rates to a 12-year high of 4.3%. The combination of increased borrowing expenses and the resultant decline in consumer sentiment suggests a challenging economic landscape marked by heightened financial concerns among Australians.
The NAB Monthly Business Survey for October 2023, as reported by NAB Group Economics, reveals a persistent low level of confidence within the business landscape, notwithstanding favourable economic conditions. Although there is a modest improvement in business conditions, notably in sales and profitability metrics, an overall subdued sentiment prevails, marked by declines across various industries.
The Australian financial markets greeted the latest US inflation data with euphoria, interpreting it as a signal that the work of the US central bank is complete, raising hopes for the Reserve Bank of Australia (RBA) to follow suit.
- US markets experienced a notable surge following positive inflation reading.
- PPI inflation in the US softens as retail sales dip in October, consumers are cautious.
- China's economic indicators surpassed expectations, demonstrating a positive trajectory.
- UK economy shows signs of stagnation in Q3 2023 amidst a resilient job market.
- Germany's Economic Sentiment Index experienced a notable increase,
- Japan’s economy stumbles amid significant contraction.
US stocks and bonds experienced a notable surge following a more significant-than-expected decline in inflation to 3.2% in October. This marked the first downturn in four months and continued the downward trend from the peak of 9.1% observed in June 2022, prompting a substantial decrease in Treasury yields.
The deceleration in US inflation, is seen as a positive sign, leading to increased optimism that the Federal Reserve (Fed) may conclude its rate-hiking cycle. Despite the recent progress, there is acknowledgment that US inflation has further room to slow down, aligning with the target of 2%.
A U.S. rate hike at the December FOMC meeting is unlikely, given market tensions and geopolitical fragility. According to the CME Fed Watch Tool, there is currently a 100% probability of no rate hike at the December 13th Fed meeting.
The Michigan Consumer Sentiment Index report for November revealed a decline to a six-month low, indicating weakened consumer sentiment in the United States. The annual Producer Price Index (PPI) inflation for final demand in the United States softened to 1.3%, a notable decrease from the 2.2% recorded in September and below the market expectation of 1.9%.
The US Dollar Index maintained its position following the release of PPI data, suggesting stability in the currency markets. The data also prompted reactions in other financial markets, with gold prices holding gains as the US PPI experienced its most significant decline since April 2020. This economic cooling is further evident in the decline of monthly producer prices, reflecting a shift in the US economic landscape.
The dip in retail sales in October, the first in seven months, indicates a cautious consumer approach, influenced in part by elevated interest rates. However, the extent of the decline in retail sales was less than anticipated, highlighting a degree of resilience in consumer behaviour amid challenging economic conditions.
In October, China's economic indicators surpassed expectations. Industrial production exhibited growth beyond anticipated levels, indicating increased economic activity in the manufacturing sector. Similarly, retail sales surpassed expectations, reflecting robust consumer spending. Despite these positive signals, it is noteworthy that the overall economic landscape is influenced by challenges, particularly in the property sector.
There was a 0.2% year-on-year decline in consumer prices, a shift from the previous month's flat reading and expectations of a 0.1% decrease. Analysts emphasise that this dip does not necessarily signal a deflationary spiral.
While industrial output and consumption outperformed forecasts, the broader economic context suggests the persistence of certain challenges. China's economic recovery remains a focal point amid ongoing stimulus efforts.
In October, the UK’s Consumer Price Index (CPI) reported a notable deceleration in inflation, dropping sharply to 4.6% year-on-year, alleviating concerns about a potential interest rate hike by the Bank of England. This data suggests a favourable development in the inflationary landscape, providing a nuanced view for monetary policy considerations.
Although, the British economy has exhibited stagnation in the third quarter of 2023, marking the weakest performance in four quarters but surpassing expectations of a 0.1% contraction. Despite forecasts for a slight downturn, the UK managed to avoid a recession this year.
The Gross Domestic Product (GDP) annual growth rate came in at 0.6% for Q3, slightly exceeding the forecasted 0.5%. This lack of growth underscores the impact of high interest rates on both consumer spending and business activity.
In the quarter ending September, the unemployment rate remained stable at 4.2%, in line with expectations. Despite concerns about an economic slowdown, reports that the unemployment rate showed resilience, remaining broadly unchanged. This data suggests a robust performance in the UK job market, mitigating potential impacts from economic deceleration.
The European Central Bank kept interest rates at multi-year highs during its October meeting, marking a significant shift from its 15-month streak of rate hikes and reflecting a more cautious "wait-and-see" stance among policymakers, influenced by the gradual easing of price pressures and concerns about an impending recession.
This decision follows a series of ten consecutive rate increases since July 2022, which elevated the main refinancing operations rate to a 22-year high of 4.5% and the deposit facility rate to a record of 4%.
The central bank stated its determination to ensure that inflation returns to its 2% target over the medium term, saying it will maintain interest rates at these high levels for a sufficiently extended period until it achieves that objective.
In November, Germany's ZEW Economic Sentiment Index experienced a notable increase, reaching 9.8 points, surpassing expectations of 5.0 and marking a positive shift from the previous month. This improvement reflects enhanced investor morale, bringing the index back into positive territory for the first time since April.
Japan's economic performance in the third quarter revealed a significant contraction, declining by 2.1% year-on-year. This contraction follows a robust 4.8% growth in the second quarter and exceeds expectations for a more modest 0.6% decline.
The downturn, marking the first contraction in three quarters, underscores the vulnerability of Japan's recovery. The disappointing GDP figures support the case for continued stimulus measures from both the Bank of Japan (BOJ) and the government. The contraction in July-September signals a challenging economic landscape, prompting a reassessment of the country's growth trajectory.
Australia to impose capital gains tax on wrapped crypto tokens.
The Australian Tax Office (ATO) has released official guidance this week, to clarify various taxable events within its jurisdiction. According to these new guidelines, transfer of a crypto asset to an address that the sender ‘does not control’ or that ‘already holds a balance’ will count as a taxable event.
Cryptocurrency capital gains were included as one of the ATO's four main areas of concern in May 2022. The implication of this guidance follows that, wrapping or unwrapping tokens, irrespective of their price, will be subject to capital gains tax (CGT). Capital gains tax on cryptocurrency products will apply to wrapped tokens as well as token interactions with decentralised lending protocols.
Chloe White, Managing Director of Genesis Block and an adviser to Blockchain Australia, commented on the new guidance on X (Twitter):
“The Australian Tax Office is in breach of the technology neutrality principle and is creating policy in lieu of Treasury leadership. It’s time for the Government to step in and correct these errors made by the ATO, who have continued to dig their heels in despite the evidence.”
SIM card swap attacks: risks, mechanisms, and safeguards.
In our increasingly interconnected world, where mobile phones are integral to communication, commerce, and identity verification, the security of mobile devices has become paramount. One emerging threat that individuals and businesses alike must be aware of is the SIM card swap attack. In this section, we will delve into the mechanics of SIM card swap attacks, their potential risks, and whether they can occur in Australia.
What is a SIM card swap attack?
A SIM card swap attack, also known as SIM swapping or SIM hijacking, is a type of identity theft where attackers gain control over a victim's phone number by manipulating their mobile carrier's customer service. This attack involves convincing the carrier to switch the victim's phone number to a new SIM card controlled by the attacker. Once successful, the attacker can receive all calls and messages intended for the victim, enabling unauthorised access to sensitive information.
How does a SIM card swap attack occur?
Information gathering: Attackers often start by gathering personal information about the target, such as their full name, date of birth, and phone number. This information can be obtained through social engineering, data breaches, or other means.
- Impersonation: Armed with the collected information, the attacker contacts the victim's mobile carrier, posing as the account owner. They may use various tactics to impersonate the victim convincingly, such as providing accurate personal details or exploiting weak authentication processes.
- Social engineering: Attackers may manipulate customer service representatives by using social engineering techniques. This can involve creating a sense of urgency or emergency, claiming a lost or stolen phone, or asserting the need for an immediate SIM card replacement.
- Compromising Two-Factor Authentication (2FA): Many online services use phone numbers as a second factor for authentication. Once an attacker controls the victim's phone number, they can potentially gain access to accounts secured with SMS-based 2FA.
Risks associated with SIM card swap attacks.
- Financial loss: With access to the victim's phone number, attackers can attempt to reset passwords for online banking, cryptocurrency wallets, or other financial services, leading to unauthorised transactions.
- Identity theft: SIM card swap attacks can result in the theft of personal and sensitive information, allowing attackers to assume the victim's identity for malicious purposes.
- Data breach: If the compromised phone number is linked to business accounts, sensitive corporate data may be at risk. This can have severe consequences for individuals and organisations alike.
Can SIM Card swap attacks happen in Australia?
Yes, SIM card swap attacks can happen in Australia, as they are not limited to any specific geographic location. While the prevalence of these attacks may vary, individuals and businesses should be vigilant and take proactive measures to mitigate the risk.
- Use authenticator apps: Whenever possible, use authenticator apps for two-factor authentication instead of relying on SMS-based methods.
- Secure accounts with strong passwords: Strengthen the security of online accounts by using complex, unique passwords and enabling additional security features offered by online platforms.
- Be cautious with personal information: Exercise caution when sharing personal information online and be sceptical of unsolicited requests for sensitive data.
- Contact your mobile carrier: If you suspect a SIM card swap attempt or experience sudden loss of service, contact your mobile carrier immediately to verify and secure your account.
As mobile phones continue to play a pivotal role in our lives, understanding and addressing emerging threats like SIM card swap attacks becomes crucial.
By staying informed, practicing good cybersecurity hygiene, and taking preventive measures, individuals and businesses can mitigate the risks associated with this evolving form of identity theft. To read more about authorised SIM swaps, visit the Telecommunications Industry Obudsman’s website.
ASIC provides a checklist of common scams and ways to avoid them. To learn more, visit ASIC’s website.
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Prices are accurate as of 11:00 AM AEST, on 16/11/2023.