Weekly Crypto Wrap: 18th July 2024

TLDR

• Introducing BTC Markets' beginners guide to crypto.
• Crypto market rebounds amid seller exhaustion and ETF inflows.
• Bitcoin hits US$65,000, defying concerns over Mt. Gox payouts.
• SEC grants preliminary approval for ETH ETFs.
• BlackRock's AUM hits US$10.6T record, fuelled by ETF inflows.
• Australian inflation expectations dip to 4.3% as RBA targets 2-3% by 2025.
• US inflation eases to 3-year low, jobless claims fall amid mixed signals.

BTC Markets announcements

Introducing BTC Markets' beginners guide to crypto.

We're excited to announce the launch of our new Learn Section, designed specifically for beginners eager to learn about the world of cryptocurrencies. At BTC Markets, we understand that the crypto space can be daunting, especially for newcomers. That's why we've created a comprehensive educational hub to help you navigate this vibrant landscape with confidence.

What you’ll find in our Learn Section:

• Introduction to cryptocurrencies: Explore the fascinating world of cryptocurrencies and their potential role in the future of finance.
• Getting started in crypto: Learn the basics about crypto wallets, exchanges and creating an account.
• How to buy and sell crypto: Learn how to buy, sell, and store crypto on an exchange, and secure your assets with best practices.
• How to stay safe in crypto: Stay safe in the crypto space by understanding the common scams and how to avoid them.
• Crypto tax requirements: Understanding the regulatory landscape and tax reporting requirements for crypto.

Visit our Learn Section today and start your journey towards becoming a confident and informed crypto enthusiast. With BTC Markets, the future of finance is at your fingertips.

The [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.

The [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 Crypto Tax Calculator for enhanced reporting.

BTC Markets has partnered with Crypto Tax Calculator (CTC) to streamline your crypto tax reporting. With CTC, users can import data from their exchanges and wallets, including any DeFi and NFT activity, and then access tax reports that can be passed to an accountant or used to file directly with the ATO via myTax.

To celebrate this collaboration, CTC is extending an exclusive 30% discount to BTC Markets clients. View the discount codes here.

BTC Markets x Ticker News ‘Crypto Corner’ featuring Amy-Rose Goodey.

In this episode, Caroline Bowler sits down with Amy-Rose Goodey, the newly appointed CEO of the Digital Economy Council of Australia (DECA), formerly known as Blockchain Australia. They discuss the reasons behind the rebranding and how it aims to better advocate for Australia's growing digital economy.

Watch now on YouTube or Ticker News.

Did you know…AUD card deposits are available at BTC Markets?

BTC Markets clients can deposit AUD directly into their accounts using Australian-issued Visa or Mastercard credit or debit cards.

This method provides a fast, convenient, and secure way to fund accounts instantly without leaving the exchange.

Clients can simply log in and enter their card details to make an instant deposit.

Benefits of AUD card deposits include:

• Instant deposits without leaving the exchange.
• Flexibility to use Visa or Mastercard credit or debit cards.
• Enhanced security for card information.

Additionally, we offer other deposit methods such as Osko (PayID) and direct deposits.

Our goal is to provide Australians with easier access to digital assets and a more convenient trading experience.

Deposit AUD today!

To learn more about AUD card deposits, please visit our Help Centre.

State of crypto

The weekly trading stats as of Monday, July 15th at 10:00 am AEST, based on data from Tradingview in USD.

Crypto market rebounds amid seller exhaustion and ETF inflows.

The crypto market experienced a strong recovery over the past week, driven by various factors, including sell-side exhaustion from the German government sell-off, eight days of Bitcoin ETF inflows, and diminishing fears over Mt. Gox repayments.

According to Glassnode, the reversal in Bitcoin’s price action can be mainly attributed to the "complete exhaustion of the German government sell-side pressure." The BTC sales by the German government significantly depleted their 48.8k BTC balance in a short period.

Historically, miners and institutions have been primary sources of sell-side pressure, and the recent drop to US$53,000 was also attributed to Mt. Gox repayments.

The sell-off dropped BTC below the average ETF holder's cost basis of US$58,200, aligning with the 200-day moving average. ETFs saw over US$1B in inflows last week, indicating strong institutional demand counteracting the German government’s supply. Additionally, a marked decline in exchange flows further eased sell-side pressure.

This rebound, supported by renewed investor confidence, saw Bitcoin close the trading week above US$60,000, gaining 8.66%. Ethereum rose 10.75%, Solana gained 12.23%, whilst XRP and ADA rebounded with an impressive 24.09% and 24.50% gain respectively.

View latest prices on BTC Markets.

Bitcoin hits 4-week high, defying concerns over Mt. Gox payouts, as XRP leads the crypto rally.

Bitcoin surged to its highest level in four weeks since late June, despite concerns over the distribution of US$2.8 billion worth of BTC from the defunct Mt. Gox exchange. XRP led the altcoin rally, jumping 9% in a day and 35% over the week, buoyed by increased holdings from large investors and new institutional indices from CME and CF Benchmarks.

Ki Young Ju of CryptoQuant and other analysts suggest that fears of market disruption from the Mt. Gox payouts are overestimated. They believe the market can absorb the distributed BTC gradually, without significant impact. CoinMetrics supports this view, indicating that an orderly liquidation of the reclaimed BTC should prevent severe market disruptions.

Check XRP/AUD price on BTC Markets.

SEC grants preliminary approval for ETH ETFs.

The U.S. Securities and Exchange Commission (SEC) has reportedly given preliminary approval to BlackRock, Franklin Templeton, and VanEck for their spot Ether exchange-traded funds (ETFs), contingent on the submission of final documents by the end of the week. Trading may begin as early as July 23. Additional firms, including Fidelity, 21Shares, Grayscale, Bitwise, and Invesco Galaxy, are also expected to launch their ETFs simultaneously.

According to Bloomberg ETF analyst Eric Balcunhas, applicants must submit amended S-1 filings, specifying fees, by July 16, with SEC approval expected on July 22 after trading hours close. Industry insiders, such as Bitwise's Katherine Dowling and Matt Hougan, express optimism, noting fewer issues in the SEC’s review process.

Hougan predicts up to US$15 billion in inflows within 18 months for ETH ETFs, like spot Bitcoin ETFs. If approved, the ETFs will be listed on major exchanges like Nasdaq, New York Stock Exchange (NYSE), and the Chicago Board Options Exchange (CBOE).

Trade ETH/AUD on BTC Markets.

BlackRock's AUM hits US$10.6T record, fuelled by ETF inflows.

BlackRock has surpassed US$10.6 trillion in assets under management (AUM), with a US$1.2 trillion increase year-over-year, driven by substantial inflows into exchange-traded funds (ETFs).

Blackrock CEO, Larry Fink highlighted record ETF inflows at the beginning of 2024, with organic growth driven by private markets, retail active fixed income, and significant flows into ETFs. BlackRock's iShares Bitcoin Trust (IBIT), the largest spot Bitcoin ETF, holds US$19.4 billion in Bitcoin, leading with a 35.2% market share in US Bitcoin ETFs.

In the second quarter of 2024, investors bought US$83 billion worth of BlackRock ETF shares, raising the year’s total to over US$150 billion. The firm’s revenue and operating income rose by 8% and 11% respectively, attributed to “longstanding relationships with corporate and government”.

Positive inflows into spot Bitcoin ETFs helped Bitcoin’s price recover above US$60,000. On July 12, BlackRock saw the largest ETF inflows, amassing over US$120 million.

Fink's recent comments on CNBC mark a significant shift in his stance on Bitcoin. Once a sceptic, Fink now views Bitcoin as a legitimate financial instrument with a role in diversified portfolios. Amid growing institutional interest in alternative assets, Fink's endorsement underscores Bitcoin's potential.

Source: TheBlock.co

Crypto Fear & Greed Index

Source: alternative.me

The week ahead: economic events

July 18th: United Kingdom Unemployment Rate. Euro Area Deposit Facility Rate and Interest Rate.

July 19th: Japan Inflation Rate. United Kingdom Retail Sales MoM.

July 24th: Germany GfK Consumer Climate and Manufacturing PMI. Canada Interest Rate and Interest Rate.

Source: trading economics

Market reflections

Overview

Over the past week, global markets reacted to the attempted assassination of Donald Trump and comments from Fed Chair Jerome Powell, who expressed confidence in inflation returning to the Fed's target. Wall Street stocks closed higher, while bonds were mixed amid increased expectations of a Trump victory in the November election. Australian inflation expectations dropped to 4.3%, with the RBA targeting 2-3% by 2025. The Australian economy faces slow growth and monetary caution. US inflation fell to a 3-year low, and jobless claims decreased amid mixed signals. China’s trade surplus reached a 2-year high as exports surged and imports declined.

Australia

• Australian inflation expectations dip to 4.3%.
• The Reserve Bank of Australia targets 2-3% by 2025.
• Slow growth and monetary caution ahead for the Australian economy.

Australian inflation expectations dip to 4.3% as RBA targets 2-3% by 2025.

Consumer inflation expectations in Australia decreased slightly to 4.3% in July 2024, down from 4.4% in June, amid easing cost pressures. Despite this, service inflation remains persistent.

The Reserve Bank of Australia (RBA) is aiming to bring inflation within the 2-3% target by late 2025, expecting to reach the midpoint by mid-2026. Budget outcomes and energy rebates may temporarily reduce headline inflation.

Whilst Australia's Q1 2024 headline inflation was 3.6%, the lowest in nine quarters, but the monthly CPI in May was 4.0%, the highest since late 2023. Economic growth slowed to 0.2% in Q4 2023.

Australia's economic barometer: navigating slow growth and monetary caution.

The Westpac-Melbourne Institute Leading Economic Index's recent data paints a picture of subdued economic conditions in Australia heading into mid-2024. Despite a flat reading in June, the index's six-month annualised growth rate showed a slight improvement, albeit remaining in negative territory. This indicates ongoing sluggishness in economic momentum, extending from the latter half of 2023 into early 2025.

Looking ahead, projections for GDP growth in the first half of the year suggest a modest annualised pace of 0.8%. This forecast aligns with earlier indications from weak index readings throughout 2023, underscoring the challenges facing Australia's economic recovery.

From a monetary policy perspective, Westpac anticipates the RBA will maintain its current stance by keeping the official cash rate unchanged in its upcoming August meeting. This decision reflects the ongoing effort to balance economic growth with inflation management, as articulated by senior economist Matthew Hassan. He notes that while slow growth is helping align demand with supply, the timing and effectiveness of this adjustment process remain uncertain.

Global

• US inflation eases to 3-year low, jobless claims fall amid mixed signals.
• China’s trade surplus hits 2-year high as exports surge and imports decline.
• Japan’s trade surplus surges in June, defying deficit expectations.
• Germany's economic sentiment drops as outlook dims amid rising current conditions.
• UK inflation holds steady, driven by mixed sector trends.
• Canada's inflation eases, influenced by lower transportation costs.

United States

US inflation eases to three-year low, jobless claims fall amid mixed economic signals.

In June, the US experienced a notable easing in inflation, with core consumer prices, excluding food and energy, rising by a modest 0.1% month-over-month, the smallest increase since February 2021. This slowdown was driven by slower growth in shelter prices and declines in transportation services and new vehicle costs.

The annual core inflation rate dropped to a three-year low of 3.3%, while the overall Consumer Price Index (CPI) unexpectedly declined by 0.1% month-over-month, marking its first decrease since May 2020 and lowering annual inflation to 3%, the lowest since June 2023.

Simultaneously, initial unemployment claims fell to a five-week low, surpassing market expectations. However, the Producer Price Index (PPI) rose in June, driven by the service sector, despite a decline in goods prices. Factory prices increased by 0.2% from the previous month, driven by higher costs in machinery and vehicle wholesaling, while goods like gasoline saw a 0.5% drop.

Consumer sentiment declined for the fourth consecutive month in July, hitting its lowest level since November 2023, with concerns over high prices and economic uncertainty persisting among nearly half of consumers. Despite this, inflation expectations for both the short and medium terms slightly improved.

Retail sales in June remained stagnant overall, impacted by declines in auto sales and gasoline stations, although core retail sales excluding volatile sectors showed a robust 0.9% increase, signalling resilience in consumer spending in non-automotive areas like building materials and health stores.

In June, building permits increased by 3.4%, the highest level in three months and surpassing market expectations. This growth was driven by a surge in approvals for units in buildings with five or more units, whilst single-family authorisations fell.

The mixed economic signals underscore ongoing challenges and resilience in the US economy, influenced by inflation dynamics, consumer sentiment shifts, and sector-specific trends in retail and production.

China

China’s trade surplus hits 2-year high as exports surge & imports decline.

China's trade surplus surged in June 2024, the highest in two years, driven by an 8.6% increase in exports, the fastest growth in 15 months, and a 2.3% decline in imports.

Trade surplus with the US expanded and despite strong export performance, China's Q2 2024 economic indicators showed mixed results as industrial production exceeded expectations, but GDP growth fell short, and retail sales reflected subdued domestic consumption.

Challenges like a weakening yuan, sluggish property market, weak domestic demand, and trade tensions with the West highlight the need for targeted economic policies.

Japan

Japan’s trade surplus surges in June, defying deficit expectations.

Japan's trade surplus soared in June, up significantly from a year earlier, surpassing market forecasts. This improvement was driven by a 5.4% year-on-year increase in exports, marking the seventh consecutive month of growth. Imports also rose by 3.2%, the third consecutive month of increase. Despite this positive monthly performance, Japan recorded a trade deficit for the first half of 2024.

Germany

Germany's economic sentiment drops as outlook dims amid rising current conditions.

The ZEW Indicator of Economic Sentiment for Germany fell in July, the first decline in a year and the lowest in four months, missing forecasts due to falling exports, political uncertainty in France, and unclear ECB monetary policy.

Conversely, the current conditions index improved, the highest in a year, suggesting a better present economic environment. Overall, while immediate conditions are slightly better, future economic prospects remain uncertain, impacting investor confidence and market stability.

United Kingdom

UK inflation holds steady in June, driven by mixed sector trends.

The UK's annual inflation rate remained steady at 2% in June, matching May's rate and holding at 2021 lows, despite forecasts predicting a dip to 1.9%.

Whilst the economy grew by 0.4%, surpassing forecasts of 0.2%, retail, wholesale, and construction sectors rebounded strongly, with construction growing 1.9% and manufacturing up 0.4%. The services sector maintained 0.3% growth, driven by retail trade and professional activities, contributing significantly to overall economic expansion.

Canada

Canada's inflation eases in June, driven by lower transportation costs.

In June, Canada's annual inflation rate decreased to 2.7% from 2.9% in May, defying expectations that it would stay at 2.9%. This decline resumes the disinflation trend and aligns with the Bank of Canada's forecast of near-3% inflation for the first half of the year.

The drop was mainly due to lower transportation costs, with gasoline prices slowing sharply to 0.4% from 5.6%, influenced by OPEC's phased-out production cuts. Inflation for shelter eased slightly to 6.4%, aided by rate cuts and lower bond yields.

Scam awareness

AI-powered crypto scams: the next generation of fraud.

As the cryptocurrency market changes, so do the tactics of scammers. Blockchain analytics firm Elliptic reported a concerning trend: the rise of AI-powered crypto scams.

These scams leverage artificial intelligence to create convincing deepfakes, scam tokens, phishing websites, and spread disinformation. While the current risk is relatively small, it is crucial for crypto users to be vigilant and take necessary precautions to protect themselves.

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 18/07/2024.