Weekly Crypto Wrap: 22nd June 2023

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TLDR

• New trading pair: BTC / USDT is now available on BTC Markets.
• Bitcoin reaches its highest level since April 15th.
• AU sees strong jobs data whilst US retail sales unexpectedly surged.
• BlackRock applies for a spot Bitcoin exchange-traded fund (ETF).
• ASX includes crypto in their annual investor survey.
  

BTC Markets announcements

New trading pair: BTC / USDT is now live on BTC Markets!

The BTC / USDT trading pair is now fully live and available to trade on BTC Markets. Place your buy and sell orders today.

Blockchain Week 2023.

Blockchain Week 2023 is Australia's flagship event for the blockchain and digital currency industry. Held over five days across Australia, it provides a platform to discuss emerging technology and their global implications. Our CEO, Caroline Bowler is representing BTC Markets to discuss the future of digital currency exchanges, balancing innovation, with regulatory compliance, and blockchain data use cases.

Doing your taxes? Don’t miss our Crypto Tax Webinar with Koinly.

If you couldn't join us for our live stream featuring our CEO Caroline Bowler and Koinly's Head of Tax, Danny Talwar, don't worry you can watch the recorded session on YouTube.

Plus, take advantage of a special offer: get 30% off your first Koinly tax report by using the code BTC23 at checkout on Koinly.com.au. Terms and conditions apply. See our blog for further information.

How to transfer 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. Follow our step-by-step instructions to ensure a seamless transfer process.

The week ahead

Upcoming Economic Events:

June 22nd: Fed Chair Powell‘s Testimony. The UK’s Interest Rate will be announced.

June 23rd: Second day of Fed Chair Powell’s Testimony, Japan Inflation Rate, UK Consumer Confidence and Month on Month Retail Sales.

June 26th: Germany Ifo Business Climate Index will be released.

June 27th: Canada’s Inflation Rate and United States Durable Goods Orders will be announced.

June 28th: Germany's GfK Consumer Climate will be reported, followed by Italy's Inflation Rate.

June 29th: The United States Fed Funds Rate announcement, Japan’ Consumer Confidence, and Germany’s Inflation Rate.

Economic Calendar (tradingeconomics.com)

State of crypto

Bitcoin experienced a significant breakthrough as it surpassed resistance at US$30,000 in Wednesday’s trading session and crossed above the 50-day moving average on Tuesday. This surge propelled Bitcoin to its highest level since April 15th.

Notably, the current surge in prices coincides with the recent submission of a spot Bitcoin exchange-traded fund (ETF) application by BlackRock, a prominent global entity.

Since the filing on June 15th, Bitcoin has experienced a significant 20% surge in its valuation. The subsequent announcements from Schwab, Fidelity, and Citadel about their participation in a crypto exchange also injected renewed vitality into the cryptocurrency market.

The market's reaction to the active adoption of traditional finance (tradfi) giants underscores the influence of institutional players within the cryptocurrency industry.

Weekly crypto close.

Here are the weekly close stats as of Monday, June 19th at 10:00am AEST from Tradingview in USD.

Bitcoin closed the week with a 1.60% gain, reaching US$26,339. Ethereum, on the other hand, experienced a loss of 1.81% and settled at US$1,720. XRP struggled, declining by 6.52% and closed at US$0.4868. Litecoin is currently consolidating, down 0.63%, holding stable at US$77.19. ADA had a challenging week, closing with a loss of 4.04% and ending at US$0.2610. Bitcoin's market capitalisation increased by 1.03%, maintaining a dominance level of 49.66%. The total cryptocurrency market capitalisation rebounded slightly, gaining 0.55% and closing the week at US$1.029 trillion.

Year-to-date.

In terms of year-to-date performance, Bitcoin has surged up 82.50%, currently trading at US$30,169. Ethereum trailing behind with a 60.38% increase, trading at US$1,918.58. XRP maintaining stability, with a 48.33% gain for the year and trading at US$0.5025. Litecoin is up 23.42%, currently trading at US$86.55. Lastly, Cardano regaining lost ground up 18.51%, trading at US$0.2911.

Market reflections

Australia

The Reserve Bank of Australia (RBA) is facing increased pressure to implement additional interest rate hikes as strong jobs data and the prospect of higher rates in the United States raise concerns about a growth slowdown and the RBA's ability to avoid a recession.

Economists believe that the jobs data makes a rate hike in July even more likely, as Australia's cash rate of 4.1% has been insufficient in curbing underlying price pressures and lags other advanced economies. The announcement coincided with New Zealand entering a technical recession due to a 0.1% contraction in its economy in the first quarter, further adding pressure on the RBA.

Compounding the challenges faced by the Australian economy are the slowdown in China and the US Federal Reserve's plan to raise its policy rate beyond previous expectations. Weakening property sales, retail sales, and industrial production in China led to two surprise rate cuts by the People's Bank of China. These factors contribute to the likelihood of an Australian technical recession, as variable rate mortgages make the local economy more sensitive to interest rates compared to New Zealand.

The release of the jobs data prompted bond markets to revise their probability of a cash rate increase at the RBA's July 4 meeting significantly higher. Traders now estimate a 64% chance of a 0.25 percentage point rate rise, up from 36% prior to the jobs figures. However, higher interest rates are expected to lead to a slowdown in economic growth, with some economists assigning a 50% chance of a recession.

Despite the economic slowdown, the jobs market remains tight, and wage and inflationary pressures persist. Nominal wages have reached a decade-high, driven by low unemployment. Analysts anticipate that the RBA may need to raise rates beyond the previously projected peak of 4.35% to address these concerns. Forward-looking indicators also suggest a potential weakening in the job market.

Global

US

US retail sales unexpectedly surged, surpassing expectations and indicating resilient consumer spending despite inflation and higher interest rates in May. These figures suggest strong consumer spending, reflecting a positive trend in retail sales.

In the housing sector, building permits rebounded last month, exceeding market expectations. Approvals for multi-unit structures rose, and single-family authorisations reached a 10-month high. Building permits showed growth across all regions of the United States. However, the housing market continued to face subdued activity due to high interest rates and inflation.

The US consumer sentiment index reached its highest level in four months, driven by factors such as easing inflation and the resolution of the debt ceiling crisis. Both current economic conditions and consumer expectations saw improvements in June. Year-ahead inflation expectations declined, while long-run inflation expectations remained relatively unchanged. Overall, these findings indicate an upward trend in consumer sentiment compared to the previous year.

China

China has experienced a slowdown in its post-COVID economic recovery, as shown in key economic indicators released by the National Bureau of Statistics (NBS). Compared to the previous month, there was slower growth observed in manufacturing, services, consumption, investment, and international trade.

However, despite this deceleration, the overall trend remained positive, signalling that the economy was still on a path of recovery. During a press conference, the NBS spokesperson, Fu Linghui, highlighted the gradual recovery of production demand, stabilisation of employment and consumer prices, and improvement in economic operations and development quality. Fu Linghui also acknowledged the complex and severe international environment, characterised by sluggish global economic growth.

Although the domestic economy was performing well in its recovery, there was still a lack of sufficient market demand. To address the dip in growth, the Chinese government is considering the implementation of a stimulus package aimed at boosting economic growth in the second half of the year.

Japan

The Bank of Japan maintained its accommodative monetary policy stance by keeping interest rates unchanged and continuing with bond buying. They acknowledged the likelihood of slowing inflation but expressed their dedication to achieving price stability and supporting the economy. The board viewed a recovery in Japan's output in the future, driven by pent-up demand.

Euro Area

The European Central Bank (ECB) announced a rate increase of 25-basis points, bringing its main rate to 3.5%. The bank has been progressively raising rates since July 2022 as a measure to address the region's record-high inflation. However, the latest inflation data showed a faster-than-expected slowdown, with May's headline inflation at 6.1%. Despite this recent deceleration, the ECB has revised its projections for both headline and core inflation, now anticipating 5.4% inflation for this year, 3% in 2024, and 2.2% in 2025.

UK

UK inflation remained high in May 2023, with consumer prices rising by 8.7% annually, unchanged from the previous month. Core inflation reached 7.1%, the highest since March 1992. The Bank of England is expected to implement another interest rate hike to curb inflation without causing a recession.

The persistently high inflation, the highest among advanced economies, poses challenges for the government. Gas and electricity bill reductions may lead to a decline in headline inflation, but core inflation remains a concern due to rising mortgage costs and taxes.

Alt action

Bitcoin Cash (BCH) skyrockets after tradfi backed exchange listing.

Bitcoin Cash (BCH) has experienced significant growth, achieving its largest daily jump in over a month with a 22% gain in the past 24 hours, reaching US$141.70.

EDX Markets, a new exchange catering to institutional investors, has announced that it will be listing Bitcoin Cash as one of four-coin offerings. Supported by major financial institutions and following a non-custodial approach, EDX prioritises security and eliminates conflicts of interest. Asset custody is managed through partnerships with third-party banks and custodians, and plans are in place to establish a clearinghouse for streamlined settlement processes.

BCH is a payment solution using an innovative protocol, such as CashToken issuance, enabling advanced on-chain applications like secure vaults, decentralised exchanges, and bridged sidechains.

BCH emerged as a hard fork from Bitcoin, to address scalability and transaction fee limitations. It operates on a decentralised blockchain network, claiming to distinguish itself through a larger block size for improved scalability and lower fees.

BCH is currently trading at US$134.40.

Trade BCH now on BTC Markets

The Big 3

BlackRock applies for a spot Bitcoin exchange-traded fund (ETF).

BlackRock, the world's largest asset manager, has applied to the U.S. Securities and Exchange Commission (SEC) for a spot Bitcoin exchange-traded fund (ETF).

The application was filed in partnership with Coinbase, the largest U.S. cryptocurrency exchange. BlackRock, with $9.5 trillion in assets under management, plans to use Coinbase Custody for the ETF and rely on the exchange's spot market data for pricing. BNY Mellon will serve as the cash custodian.

The partnership between BlackRock and Coinbase was established in August 2022, enabling BlackRock clients to access Coinbase's trading, custody, prime brokerage, and reporting services.

The registration of a Bitcoin ETF has been challenging, particularly for funds dealing with spot market trading. The SEC has previously approved four Bitcoin ETFs for futures trading but has not approved any spot ETF applications due to concerns about fraud and manipulation in the spot market.

Grayscale, another asset manager, had its spot market ETF application rejected by the SEC in 2022, leading to a lawsuit. However, a federal judge recently cast doubt on the SEC's claims regarding data provided by Grayscale.

The news coincided with the launch of a new crypto exchange backed by Citadel Securities, Fidelity Digital Assets, and Charles Schwab Corporation. Additionally, Deutsche Bank revealed its application for regulatory permission to operate a custody service for digital assets.

Bitcoin’s price has rallied since the announcements, reaching a high of US$30,800, the highest since April 15th.

Trade BTC now on BTC Markets

Ethscriptions protocol emerges as Ethereum devs consider 64x increase in staking limits.

Ethscriptions, a new protocol on the Ethereum blockchain, is gaining attention for its ability to create and share digital objects. Developed by Tom Lehman, co-founder of Genius.com, Ethscriptions utilise Ethereum "calldata" to write non-financial and arbitrary data, such as images, onto the blockchain. This approach is seen as more cost-effective and decentralised compared to contract storage. The protocol's launch saw nearly 30,000 Ethscriptions created within 18 hours, indicating a strong initial interest in the project.

Although similar technologies have existed for some time, Ethscriptions have managed to capture widespread awareness and generate excitement among users. The protocol's future success will depend on how the Ethereum community responds to this new approach, determining whether it becomes a lasting trend or a short-lived fad.

In other Ethereum news, core developers are contemplating a significant increase in the minimum amount of staked Ether required to become a validator. The proposal suggests raising the limit from 32 ETH to 2048 ETH, a 64-fold increase.

Michael Neuder, an Ethereum Foundation researcher, proposed this change to address the inflation of the validator set size and enhance network efficiency. Neuder also recommended introducing auto-compounding of validator rewards, allowing validators to earn more on their staked ETH without additional transfers.

The proposal has elicited mixed reactions from the crypto community. Some express concerns about increased centralisation, while others dismiss the idea as not beneficial for the network. The discussions on changing the staking limit are ongoing, and a final decision has yet to be reached.

Trade ETH now on BTC Markets

Beware of new scam targeting XRP community and holders.

The XRP community has been warned about a new scam targeting XRP holders. Jacob Canfield, a blockchain educator and advocate, alerted the community about a phishing attack he experienced after receiving an email claiming to be from the Ripple team regarding an XRP allocation program. Canfield emphasised that these emails are fake and designed to drain users' XRP funds, as Ripple is not conducting any allocation programs.

Scammers often impersonate prominent crypto organisations to steal digital assets and personal information. This scam directs users to a fraudulent Ripple blog post that promotes an "allocation program" and encourages investors to register their XRP claims. The scam appears to target both experienced users and newcomers to XRP.

To make their scam appear more legitimate, the attackers advocate for self-custody and stress the importance of key ownership. Users are advised to be cautious and avoid clicking on unknown or suspicious links. It is crucial to avoid sharing the 24-word recovery phrase with anyone and refrain from entering it into any apps or websites.

This scam targeting the XRP community is not the first of its kind. In a separate incident, XRP legal advocate John Deaton fell victim to a cyberattack in which his Twitter account was compromised. The hackers introduced a fraudulent token called "Law," attempting to capitalise on Deaton's reputation in the cryptocurrency community.

Trade XRP now on BTC Markets

Crypto news

ASX includes crypto as an asset class in their annual investor survey as Aussie adoption continues.

The Australian Securities Exchange (ASX) has included cryptocurrency as an asset class for the first time in their annual investor survey. The results show that 15% of investors hold a digital asset. Despite considering themselves "risk averse," nearly 31% of young Australian investors aged 18 to 24 hold or have traded cryptocurrencies.

The study found that while these young investors prefer stable returns, they still invested significantly in crypto. The researchers attributed this behaviour to a desire to differentiate themselves from previous generations and the influence of tech-savviness and social media on the 1.2 million new investors who entered the market since 2020.

The study also highlighted that while young investors had the highest crypto allocation relative to their portfolios, it was investors aged 25 to 49, known as "wealth accumulators," who owned the largest share of cryptocurrency overall.

The report acknowledged the popularity of crypto among investors and noted that 29% of intending investors are considering some form of crypto investment in the next year.

Schwab and Fidelity support the launch of a new non-custodial crypto exchange.

Major financial institutions Fidelity Investments, Citadel Securities, and Schwab have provided support to new crypto exchange EDX Markets. The exchange operates on a non-custodial model, prioritising safety and compliance for brokers and investors.

Unlike traditional exchanges, EDX Markets does not directly handle customers' digital assets. It currently offers trading for Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, and plans to introduce a clearinghouse for trade settlement. The launch has elicited mixed reactions from the crypto community, with some applauding the involvement of traditional financial firms while others express concerns about their growing influence.

Despite regulatory challenges, Wall Street remains interested in cryptocurrencies. EDX Markets recently completed its second funding round with investments from Miami International Holdings, DV Trading, GTS, GSR, and Hudson River Trading.

Deutsche Bank applies for a digital asset custody platform license in Germany.

Deutsche Bank, Germany's largest bank with assets worth US$1.3 trillion, has applied for a digital asset custody platform license with the German finance regulator, BaFin.

The bank has been working on a crypto asset custody platform since late 2020 and aims to establish a minimum viable product while exploring global client interest. This move marks a change in attitude for Deutsche Bank, which previously expressed scepticism about Bitcoin's value.

Germany has taken a crypto-friendly stance, passing laws to enable crypto custody and trading services, and BaFin has issued licenses for crypto custody to several institutions. The approval of Deutsche Bank's application would further strengthen the country's position in the crypto industry.

Regulation Roundup

Crypto laws enter final stages of UK Parliamentary Process.

The Financial Services and Markets Bill (FSMB) in the UK, which includes regulations for stablecoins and cryptocurrencies, has been approved by the House of Lords, the second chamber of the Houses of Parliament.

The bill has already been approved by the House of Commons and will now proceed to the final stages, including ‘Consideration of Amendments’ and ‘Royal Assent’.

‘Consideration of Amendments’ involves reviewing and making necessary changes to the bill before it is approved or denied by the House of Lords.

‘Royal Assent’ is the formal agreement by the Monarch to make the bill a law. It is expected that some form of the bill will become UK law soon.

The original bill focused on regulating stablecoins but has been expanded to include regulations for all cryptocurrencies. Crypto promotion supervisions have also been added to the bill.

The UK aims to position itself as a global hub for crypto asset technology and has expressed the desire to become the country of choice for crypto innovation.

Compliance conversations

How to verify legitimate BTC Markets accounts.

To combat the rising number of scams targeting our clients, we've developed a useful guide for verifying genuine BTC Markets accounts.

Visit our 'Compliance conversations' page to authenticate our official accounts, including our website URL, support and marketing email addresses, and social media handles.

Official BTC Markets accounts below:

• Website: https://www.btcmarkets.net/
• Blog: https://www.btcmarkets.net/blog
• Support & marketing emails: [email protected]
• Twitter: @BTCMarkets
• Linkedin: btc-markets
• Facebook: btcmarkets.net
• Instagram: btcmarkets_
• YouTube: @btcmarkets_au
• Caroline Bowler Twitter: @CaroBowler
  

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

Feedback

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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 22/06/2023.