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Weekly Crypto Wrap: 20th July 2023

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Rachael Lucas
Weekly Crypto Wrap: 20th July 2023

Congratulations to our $50k Bitcoin Giveaway week 4 winners!

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Terms and conditions apply. For further details please visit ‘BTC Markets $50,000 Bitcoin giveaway’.

TLDR

  • Watch our CEO on Sky News discussing the landmark XRP ruling.
  • Aussie economic growth slows due to interest rates and inflation.
  • XRP’s price soared 73.10% in the 24 hours following US court ruling.
  • Ethereum plans to make crypto wallets as simple as email.

BTC Markets in the news

BTC Markets CEO Caroline Bowler discusses landmark Ripple XRP court ruling on Sky News.

Ripple’s recent court ruling in the US carries significant implications for the regulatory framework across the cryptocurrency industry. While the news predominantly affects the United States, it remains relevant to our community here in Australia. Our CEO, Caroline Bowler, appeared on Sky News earlier this week to discuss the landmark ruling and its implications for crypto going forward. Watch the full interview here.

BTC Markets announcements

Clever Women Co. Podcast featuring BTC Markets CEO, Caroline Bowler.

In this Clever Women Co. Podcast episode, hosts Gal and Em chat with Caroline Bowler, Australia's first female CEO of a cryptocurrency exchange. Caroline talks about how her financial industry background led her to explore digital assets in 2015 and now leading BTC Markets. Tune in to hear about her career journey and valuable insights on the future of cryptocurrency.

Podcast episode links: available on Spotify and Apple Podcasts.

Want to transfer your crypto from Binance to your BTC Markets account? 

We have created a comprehensive guide on transferring your cryptocurrency from Binance to your BTC Markets account for clients who have been asking. Follow our step-by-step instructions to ensure a seamless transfer process.

State of crypto 

In the early hours of Friday morning, US federal Judge Analisa Torres handed down a ruling stating that the sale of Ripple’s XRP tokens on exchanges and through algorithms did not violate federal securities law.

The announcement, seen as a clear win for Ripple and cryptocurrency exchanges, boosted investor confidence and saw a market wide rally in prices. Caroline Bowler, CEO of BTC Markets penned a letter to our valued clients outlining the implications of the court's decision to the crypto industry and traders both here and abroad.

XRP was the clear winner of the week as its price soared 73.10% in 24 hours. It reached a high of US$0.9380, finally closing out the day at US$0.8153. The last time XRP was trading this high was the end of December 2021 where price peaked at US$0.9560 whilst Bitcoin’s (BTC) price saw a high at US$31,804.20 on Thursday, the highest trading range since June 1st, 2022.

At the weekly close on Monday, Bitcoin’s price cooled off to US$30,231.99, but still holding onto a gain of 0.24%. Ethereum fared better, closing with a 3.18% gain, closing at US$1,922.11. XRP securing an eyewatering 59.57% gain on the week closing at US$0.7468. Litecoin slipped into the red, losing 2.30% closing the week at US$92.89 and finally ADA had a better week closing with a 10.62% gain at US$0.2781.

Bitcoin's market capitalisation saw a decrease of 2.70% as traders rotated into the alts but maintained its dominant position at 50.11% for the week. The overall cryptocurrency market capitalisation benefited from the news as market participants added funds into the market seeing an increase of 3.07%, closing the week at US$1.173 trillion.

Looking to the year-to-date performance, XRP has surged ahead of the king of crypto with an impressive 131.81% gain on the year whilst Bitcoin settles in at second position with an 81.23% surge. Ethereum, moved down to third position with a solid gain of 59.51% whilst Litecoin and Cardano closed out 32.29% and 28.19% gains respectively.

*The weekly trading stats as of Monday, July 20th at 10:00 am AEST, based on data from Tradingview in USD.

The week ahead: upcoming economic events

July 21st: Japan’s YoY Inflation Rate. UK Retail Sales MoM.

July 24th: HCOB Germany Manufacturing PMI.

July 25th: Germany’s Ifo Business Climate.

July 26th: Australia's Inflation Rate.

July 27th: US Fed Interest Rate. US Fed Press Conference. Euro Area Interest Rate. European Central Bank Press Conference. Germany's GfK Consumer Climate Indicator. USGDP Growth Rate QoQ. US Durable Goods Orders.

Economic Calendar (tradingeconomics.com)

Market reflections

Australia

Last week, the Treasurer appointed Michele Bullock as Governor of the Reserve Bank of Australia for a seven-year term commencing 18 September 2023. Ms Bullock, currently Deputy Governor, will become the ninth governor of the central bank and will be the first female appointment to the role.

The Reserve Bank of Australia discussed global inflationary pressures and domestic economic developments in their recent minutes. In most advanced economies, inflation remains high, driven by services price inflation and wage growth, while business conditions in the services sector have weakened, and consumption activity is subdued.

In Australia, economic growth has slowed due to higher interest rates and inflation, but the labour market remains tight. Inflation has eased slightly but remains high, particularly in services and rent inflation. The housing market has seen a turnaround, with prices increasing in major cities, supporting household consumption, and dwelling investment.

Regarding monetary policy, the RBA considered raising the cash rate by 25 basis points but decided to hold it at 4.1 per cent. They recognised the need for further tightening to address inflation, but acknowledged recent rate increases and economic uncertainty. Reassessing in August will allow them to consider additional data, forecasts, and risks. The RBA remains committed to returning inflation to its target and will take necessary actions.

The upcoming earnings season may be challenging for investors due to slowing economic growth, leading to profit downgrades. Some companies have already downgraded their profit guidance for 2024 with cost-cutting measures and potential job cuts announced, affecting investor confidence.

Global

United States

Consumer sentiment in the US improved in July 2023, reaching the highest level since September 2021, with people feeling more positive about the economy and their prospects. This was mainly due to inflation slowing down and job markets stabilising.

In June 2023, retail sales in the US increased showing that consumers are still spending despite the economic challenges. When excluding certain items like cars and food services, retail sales rose even more, indicating resilient consumer spending. Producer prices and service costs increased, while goods costs remained unchanged. This suggests that some prices are rising, but overall, inflation is at its lowest in two years

China

China's economy grew at 6.3% in Q2 2023, surpassing Q1's growth of 4.5%, but falling short of the expected 7.3%. June's economic indicators were mixed, with slower retail sales but increased industrial output. Unemployment rates remained stable, except for youth unemployment, which reached 21.3%. Exports declined, leading to a reduced trade surplus. However, industrial production rose by 4.4% in June, with various sectors showing improved output growth, achieving 3.8% growth in H1 2023. China remains cautious about major stimulus measures due to increased local government debt.

United Kingdom

The British economy faced a slight contraction of 0.1% in May 2023, following a small growth in April. The additional bank holiday for the King's Coronation and strikes were contributing factors. Production, especially electricity and gas supply, saw a significant decline. Manufacturing, construction, and services were also affected, with consumer-facing services like food and beverage service activities experiencing a decrease.

Britain's rate of inflation was its slowest in over a year at 7.9%, according to data that will ease some of the pressure on the Bank of England to keep on raising interest rates sharply. Overall, the British economy showed no growth in the three months leading to May. The GDP is currently estimated to be 0.2% above its pre-coronavirus levels.

Canada

In Canada, the annual inflation rate dropped to 2.8% in June 2023, the lowest since March 2021. This decrease was mainly due to lower gasoline prices. Transportation costs fell, but food inflation remained steady, with groceries becoming more expensive. The increased interest rates from the Bank of Canada resulted in higher mortgage interest costs, leading to an increase in shelter inflation. The closely monitored core trimmed-mean rate fell slightly less than expected to 3.7%. On a monthly basis, the Consumer Price Index (CPI) increased by 0.1%.

Alt action

Stellar (XLM) price surges on Ripple’s XRP wave.

Stellar (XLM) price peaked to its highest level since April 2022, following an 87% jump in XRP price. Ripple's court victory against the US SEC led to a market-wide crypto rally including significant gains for both XRP and XLM.

Stellar (XLM) is a cryptocurrency and blockchain platform designed to facilitate fast and low-cost cross-border transactions. It was created in 2014 by Jed McCaleb, one of the co-founders of Ripple. Stellar aims to connect financial institutions, businesses, and individuals globally, enabling them to transfer money and assets quickly and securely.

The Stellar network operates on a decentralised blockchain, and its native cryptocurrency is XLM. Lumens (XLM) is the official name of the cryptocurrency used within the Stellar ecosystem. It serves as both a digital asset and a bridge currency, allowing users to convert and transfer different currencies seamlessly. Stellar's consensus mechanism, called the Stellar Consensus Protocol (SCP), enables fast and scalable transactions with minimal fees.

Stellar's focus is on providing financial services to the unbanked and underbanked populations, particularly in developing countries. It aims to improve financial inclusion by offering a platform for affordable and accessible cross-border payments, remittances, and other financial services.

In addition to its utility in cross-border payments, Stellar also supports the issuance of tokenised assets on its network, allowing businesses to create and trade digital assets representing real-world assets such as stocks, bonds, and commodities.

XLM is currently trading at US$0.1380.

The Big 3

Bitcoin’s on-chain data shows a steady flow of money entering the market.

Bitcoin's price briefly surged to a yearly high, but the current market is experiencing choppy, sideways movement within a narrow range. On-chain data shows a steady flow of money entering the market, resembling past years when fluctuations were limited. Glassnode, an on-chain data analytics firm that specialises in tracking and analysing blockchain data, reports that ‘Bitcoin's Realised Cap’ near $400B, indicating a steady influx of capital and a modest increase in new demand inflow in 2023

‘Bitcoin's Realised Cap’, also known as ‘Realised Market Cap’, is a metric that measures the total value of all Bitcoins in circulation at the current market price at which they were last moved or transacted. Unlike traditional market capitalisation, which considers the current price of all coins in circulation, ‘Realised Cap’ takes into account the price at which each individual Bitcoin was last transacted. According to Glassnode, this metric provides a more accurate representation of the value of the network from the perspective of investors who have bought or sold Bitcoins at various price points.

‘Realised Cap’ is calculated by multiplying the number of Bitcoins in each transaction by the price at which they were last moved. The sum of all these individual transaction values gives the ‘Realised Cap’ of the entire Bitcoin network. It can be a useful indicator for understanding the average cost basis of Bitcoin holders and can provide insights into potential support and resistance levels in the market.

Glassnode on Twitter: "The #Bitcoin Realized Cap currently sits just shy of $400B, indicating that a steady stream of capital is entering the asset throughout 2023. As the realized cap climbs, it signals that coins are changing hands at higher prices on net, suggesting a modest uptick in new demand… https://t.co/bwyfGIl9jV" / Twitter

Glassnode on Twitter: "The #Bitcoin Realized Cap currently sits just shy of $400B, indicating that a steady stream of capital is entering the asset throughout 2023. As the realized cap climbs, it signals that coins are changing hands at higher prices on net, suggesting a modest uptick in new demand… https://t.co/bwyfGIl9jV"

Buy Bitcoin now on BTC Markets.

Vitalik Buterin explains how Ethereum plans to make crypto wallets as simple as email.

Account abstraction, which would make it possible to store seed phrases in smart contracts, is a ‘pretty big deal’ because it doesn’t require changes to the underlying protocol like other upgrades before it, said Ethereum co-founder Vitalik Buterin speaking at the Ethereum Community Conference (ETHCC) in Paris earlier this week.

Developers have been working on account abstraction, or different iterations of it, since 2015, even before Ethereum was launched. The idea is to switch from ‘Externally Owned Wallets’, or EOAs, to smart contract-based wallets. If they pull it off, managing a crypto wallet would become as easy as managing an email account.

That means users could potentially recover their seed phrase - the private key used to sign transactions - as easily as they can reset the password on an email account.

The latest version is EIP-4337 (Ethereum Improvement Proposal 4337), also known as Account Abstraction Using Alt Mempool. The Ethereum (ETH) upgrade would allow users to create non-custodial wallets as programmable smart contracts. This would unlock several features, such as easy wallet recovery, signless transactions–which translates into lower transaction fees–and team wallets (also known as multisignature wallets).

This is not the only Ethereum upgrade currently in the works. Proto-danksharding, or EIP-4884 is also underway. It’s quickly become one of the main focuses of development on the network because it sets the foundation for a new data type which will drastically reduce costs and make data usage more efficient.

Buy ETH now on BTC Markets.

Landmark court ruling finds that the sale of Ripple’s XRP tokens via exchanges does not breach US federal security laws.

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs in 2020, questioning the classification of Ripple's XRP tokens as investment contracts. However, in last week’s court ruling, Judge Analisa Torres determined that the sale of XRP tokens on exchanges and through algorithms does not meet the criteria for investment contracts.

The wider cryptocurrency industry celebrated Ripple’s partial win, as the ruling creates a precedent for other crypto companies fighting class actions launched by the US Securities and Exchange Commission.

While the judge also ruled that institutional sales of XRP tokens violated federal securities laws, the ruling does bring some clarity and it is crucial to acknowledge that appeals may be filed by both parties. 

The SEC's jurisdiction is limited to the United States, and its rulings do not directly impact the digital assets industry here in Australia. Nevertheless, this ruling sets a precedent and acts as a catalyst for positive change globally.

In the days following the news, XRP soared above 70%, retaking its place as the fourth largest digital asset by market value, and toppling the embattled exchange Binance’s BNB token.

For further analysis of the XRP ruling, BTC Markets CEO Caroline Bowler has put together her thoughts which you can read on our blog, XRP: Regulatory breakthrough in the US and its global implications.

Buy XRP now on BTC Markets.

Crypto News

NAB announces payment blocks to high-risk crypto exchanges.

The National Australia Bank (NAB) is taking action to prevent payments to high-risk cryptocurrency exchanges, starting from July 18th. This move comes as major banks crack down on digital currencies stating that they are seeing an increase of fraud and scams involving high-risk crypto exchanges.

While NAB declined to specify the exchanges it is banning, it will apply to several initially and may expand further in the future. Other major banks, including Westpac and Commonwealth Bank, have already implemented similar bans on Binance over the past few months according to reports in the AFR.

The Australian Securities and Investment Commission (ASIC) has also withdrawn their local derivatives license, and it has lost its local banking partner which provides AUD payment rails. The increased scrutiny on Binance follows a lawsuit from the US Securities and Exchange Commission alleging illegal operations.

FTX Australia’s financial services license cancelled by ASICS.

The Australian Securities and Investment Commission (ASIC) has cancelled FTX Australia's financial services license, effective from July 14. The subsidiary of cryptocurrency firm FTX had its license suspended last November until May. FTX, once valued at $32 billion, filed for bankruptcy protection in the US in November, citing an inability to fully repay customers. Its founder, Sam Bankman-Fried, faces criminal fraud charges in the US. According to the ABC, FTX Australia can provide limited financial services related to the termination of existing derivatives until the end of July 2023.

Compliance conversations

Understanding why Australian banks are limiting transfers to high-risk crypto exchanges.

There has been significant discussion in the media around Australian banks restricting some transfers to high-risk cryptocurrency exchanges. It’s important to differentiate between a high-risk cryptocurrency exchange, which generally have high fraud rates, and platforms like BTC Markets, that model their security protocols on those of the traditional banking institutions. The additional work we undertake behind the scenes to protect our clients from fraudulent activities, sets the industry standard for other players in the crypto space. 

Regulators and authorities worldwide have been increasing their scrutiny of the cryptocurrency industry due to concerns about investor protection, market manipulation, and regulatory compliance. Banks, as regulated financial institutions, are under pressure to ensure they are not facilitating transactions to platforms that may be involved in illicit activities or non-compliant with regulations.

It's essential for investors to be cautious and do thorough research before using any cryptocurrency exchange, especially those categorised as high-risk. Utilising locally based, well-established and reputable exchanges with proper regulatory compliance and security measures is generally recommended to ensure a more reliable trading experience.

To stay up to date, visit our Compliance conversations page or for more information on how to spot a scam, visit ASIC’s website.

Feedback

If you have any feedback on our newsletter or want to request specific content, please submit a support ticket and we will respond shortly.

Disclaimer: The information provided in this email is for general purposes only. It should not be construed as professional financial advice from BTC Markets Pty Ltd. BTC Markets is not a financial adviser, and you should consider seeking independent legal, financial, taxation or other advice to ensure that the information relates to your unique circumstances. BTC Markets is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this information contained within this email. Past performance is not an indicator of future performance. We note that we may, at any time, change the characteristics of the product. The information provided is intended for recipients in Australia. This information is not to be reproduced without permission.

Prices are accurate as of 10:00 AM AEST, on 20/07/2023.

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