Weekly Crypto Wrap: 23rd May 2024

TLDR

• New listing: Pendle (PENDLE) is coming to BTC Markets in June 2024!
• Render (RNDR) is now live and available to trade.
• Ethereum (ETH) soars on speculation of pending ETF approval.
• Crypto bill passed by the House despite objections from the SEC.
• U.S. spot Bitcoin ETFs see nearly US$1 billion in weekly inflows.
• Financial stability unchanged amid inflation & strong labour market in the U.S.

BTC Markets announcements

New listing: Pendle (PENDLE) is coming to BTC Markets in June 2024!

We are excited to announce another new asset is coming to BTC Markets in June. Pendle is a decentralised protocol enabling users to manage and optimise returns by tokenising yield-bearing assets into tradable components. It addresses fluctuations in yields, lack of customisation, and centralised risk, while offering access to advanced financial instruments in DeFi.

Read more about Pendle on our blog and follow us on X/Twitter, LinkedIn, or Facebook for the latest updates on new asset listings.

Render (RNDR) is now live and available to trade.

You can now place your buy and sell orders for the RNDR/AUD trading pair and take advantage of this new addition to our list of supported cryptocurrencies.

Read more about Render (RNDR) on our blog and trade RNDR/AUD today.

Stay up to date on the latest developments regarding this listing by following us on X/Twitter, LinkedIn, and Facebook for the latest.

Ticker News ‘Crypto Corner’: Managing crypto taxes with Syla.

In this episode, BTC Markets CEO, Caroline Bowler is joined by Maryna Kovalenko, CEO of Syla, an Australian based crypto tax software company. They discuss how Australians can effectively manage their crypto tax reporting.

Syla’s mission is to help users stay compliant with Australian tax rules with features like ‘Lowest Tax First Out (LTFO)’ tax optimisation and accurate transaction classifications.

Watch the full episode on our YouTube channel or Ticker News.

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

Real Vision’s Chief Crypto Analyst, Jamie Coutts catches up with BTC Markets CEO, Caroline Bowler in our latest episode of Ticker News ‘Crypto Corner’. 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.

AUD card deposits are available at BTC Markets.

Did you know that you can now deposit AUD directly into your BTC Markets account using your Australian issued Visa or Mastercard credit or debit card?

This deposit method makes it even easier and faster to fund your account, all without leaving the exchange. Simply log in to your BTC Markets account and enter your card details. Your funds will be available in your account instantly, ready for you to start trading.

Here are some of the benefits of using AUD card deposits:

• Fast and convenient: Deposit funds instantly without having to leave the exchange.
• Flexible: Use your Visa or Mastercard credit or debit card.
• Secure: We use industry-leading security measures to protect your card information.

In addition to card deposits, we also offer a variety of other deposit methods, including:

• Osko (PayID).
• Direct deposit.

We are committed to providing you with a convenient trading experience and adding AUD card deposits will make it even easier for Australians to access digital assets.

Deposit AUD today!

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

CEO’s corner

Jake Denny, Head of Growth from Pier Two.

Check out Caroline's one-on-one with Jake as they discuss Pier Two's current role within the crypto industry and its prospective strategies.

Watch the video here.

BTC Markets in the news

Livewire Markets: The inevitability of Ethereum ETFs.

With applications from notable firms like Van Eck and Franklin Templeton under review, the industry is keenly observing how the SEC's decision, expected to be announced by Friday 24 May AEST, could shape the future of cryptocurrency investments.

Read the full article here.

Yahoo Finance: Coinbase targets crypto demand in $600 billion Australian pension sector.

Bitcoin, the largest token, is the most popular cryptocurrency held by self-managed super funds, making up around 60% of digital-asset holdings, according to data from BTC Markets Chief Executive Officer Caroline Bowler.

“Self-managed super funds are a growing client base,” and “tend to be cautious in their allocations,” she said.

Read the full article here.

State of crypto

• Ethereum (ETH) soars on speculation of pending ETF approval.
• Cboe publishes amended spot Ethereum ETF filings amid renewed approval hopes.
• Ethereum rally leads to over US$300 million inflow to crypto exchanges.
• House Democrats urge colleagues to support crypto bill in the U.S.
• U.S. spot Bitcoin ETFs see nearly US$1 billion in weekly inflows.

Ethereum (ETH) soars on speculation of pending ETF approval.

In a significant market move, the price of Ethereum (ETH) surged late Monday, driving up the value of other major cryptocurrencies. This spike follows speculation that the U.S. Securities and Exchange Commission (SEC) may soon approve Ethereum exchange-traded funds (ETFs).

In Monday’s trading session, ETH gained 19.23%, peaking at US$3,841 on Wednesday, marking a 23.39% increase over a 48-hour period. Bitcoin also rallied on the news, briefly reaching US$71,979 and registering a 7.89% increase on the day. Other tokens like Solana (SOL) and Ripple (XRP) saw gains of 9.87% and 5.1%, respectively.

The price boost comes as the SEC has reportedly requested exchanges looking to list Ethereum ETFs to update regulatory documents on an accelerated basis, possibly signalling imminent approval. Bloomberg analysts increased their approval odds for a spot ETH ETF to 75%, up from 25%. Bitcoin’s value has increased by 61% since the start of the year, driven largely by the SEC’s approval of spot Bitcoin ETFs.

Cboe publishes amended spot Ethereum ETF filings amid renewed approval hopes.

The Cboe exchange, associated with five issuers of potential spot ETH ETFs, has published revised 19b-4 filings in response to feedback from the U.S. Securities and Exchange Commission (SEC). The applicants include Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, and Franklin Templeton. This move indicates progress toward potential approval, although a final decision is still pending.

SEC officials have asked exchanges to refile using universal comments. While the SEC has not explicitly stated approval, the request for revisions suggests significant progress. A decision on the applications could come as soon as this Thursday, starting with VanEck and Cboe’s application. However, the spot ETH ETFs cannot launch until the SEC also approves the S-1 forms filed by the issuers.

Meanwhile, some issuers, including Grayscale and Fidelity, have amended their S-1 registration statements to remove staking from their documents, aligning with the SEC’s current stance.

Ethereum rally leads to over US$300 million inflow to crypto exchanges.

Following a rapid 9.18% increase in total crypto market cap on Monday, holders are transferring assets to crypto exchanges at the fastest rate in nearly four months, likely signalling short-term profit-taking.

Nansen Intelligence reported that Tuesday saw net inflows of 81,840 ETH, worth approximately US$306 million, the highest daily amount since January 23. This marked the third consecutive day of inflows, breaking the recent trend of decreasing ETH balances on exchanges.

David Shuttleworth, a research partner at Anagram, noted that the inflows likely indicate individuals capturing quick profits after ETH’s surge from around US$3,000 to over US$3,800 in 48 hours.

House Democrats urge colleagues to support crypto bill as Trump embraces Bitcoin donations.

Several U.S. House Democrats are urging support for the Financial Innovation and Technology for the 21st Century Act (FIT21), a major crypto market-structure bill up for a vote on Wednesday. While it has bipartisan backing in the House, its Senate future is uncertain.

The bill seeks to establish a comprehensive framework for digital assets, including consumer protections and measures to prevent illicit use. Industry leaders warn that failure to pass it could drive crypto companies out of the U.S.

Meanwhile, former President Trump is now accepting cryptocurrency donations for his 2024 campaign, enhancing his pro-crypto stance.

U.S. spot Bitcoin ETFs see nearly US$1 billion in weekly inflows.

U.S. spot Bitcoin ETFs recorded US$948.3 million in net inflows last week, pushing total inflows since January above US$12.5 billion. Fidelity's FBTC led with US$344.5 million, followed by Ark Invest's ARKB with US$243.7 million, and BlackRock's IBIT with US$131.8 million. This surge, driven by a favourable U.S. CPI report, helped Bitcoin's price rise 8% to US$67,236 over the past week.

Globally, crypto ETF inflows reached US$932 million, despite outflows in regions like Hong Kong and Canada. Ethereum saw US$23 million in outflows due to historical bearish sentiment over SEC ETF approval. BlackRock’s IBIT achieved a record trading volume market share of 55.2% and is closing in on Grayscale's GBTC in assets under management.

Source: TheBlock.co

The weekly crypto close on Tradingview*

The crypto market rebounded strongly, with major assets closing in the green over the week.

Chainlink (LINK) led the uptrend, surging by 22.28%, closely followed by Solana (SOL) with an 18.50% increase.

Bitcoin (BTC), Avalanche (AVAX), Cardano (ADA), and Ethereum (ETH) also posted gains of 7.75%, 7.39%, 6.62%, and 4.80% respectively.

Ripple (XRP) and Litecoin (LTC) experienced slight increases of 1.98% and 1.12%.

Overall, the total crypto market capitalisation rose by 5.92% over the week, reaching a valuation of US$2.334 trillion.

*The weekly trading stats as of Monday, May 20th 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:

• Solana (SOL) leads the pack with an impressive gain of 74.21%.
• Ethereum (ETH) follows closely with a 63.98% increase.
• Bitcoin (BTC) not far behind, holding onto a 63.10% gain.
• Litecoin (LTC) is sitting on a 17.62% annual increase.

*Year-to-date performance as of Thursday, May 23rd at 10:00 am AEST approximately. Based on data from Tradingview in USD.

Crypto Fear& Greed Index

Source: alternative.me

The week ahead: economic events

May 23rd: Germany Manufacturing PMI

May 24th: Japan Inflation Rate. United Kingdom Retail Sales MoM. United States Durable Goods Orders.

May 27th: Germany Ifo Business Climate Index.

May 29th: Japan Consumer Confidence. Germany GfK Consumer Climate and Inflation Rate.

Source: Economic Calendar

Market reflections

Overview

Australian consumer sentiment experienced a slight decline while the unemployment rate rose sharply, surpassing market forecasts, with the employment-to-population ratio remaining steady at 64%, indicating a tight labour market. The U.S. Fed signals extended disinflation outlook as building permits dropped in April, suggesting a potential housing slowdown. Financial stability in the U.S. remained unchanged amid inflation and a strong labour market. China's industrial production surged, though retail sales growth slowed, and Japan's trade deficit widened as imports surged. Meanwhile, Canada's inflation rate eased to its lowest since March 2021, and the UK inflation rate eased to 2.3%.

Australia

• Australian consumer sentiment experiences a slight decline.
• The unemployment rate rises sharply, surpassing market forecasts.
• Employment-to-population ratio steady at 64%, sustaining a tight labour market.

Australian consumer sentiment experiences a slight decline.

In May, Australia's Westpac-Melbourne Institute Consumer Sentiment index slightly decreased, marking the third consecutive month of decline but at a slower rate compared to the previous month.

This coincides with the announcement of a new budget aimed at enhancing employment and alleviating cost-of-living pressures. Despite this, there was a minor improvement in the 12-month and 5-year economic outlooks, as well as a slight positive shift in expectations for family finances.

However, current assessments of family finances deteriorated, and sentiment regarding the purchase of major household items continued to decline, albeit at a reduced rate.

Overall, the report underscores a continued weak consumer sentiment environment driven by inflation concerns and financial caution, despite some budget-induced optimism for the future.

The unemployment rate rises sharply in Australia, surpassing market forecasts.

Australia's unemployment rate rose in April, significantly surpassing the market forecast, and reversing the prior month's downward revision. This growth was largely driven by a surge in part-time employment, while full-time employment fell. Over the past year, employment increased, by 2.8% according to the Australian Bureau of Statistics (ABS).

Despite this, the employment-to-population ratio remained steady at 64%, indicating that employment growth is keeping pace with population growth, maintaining a relatively tight labour market.

The Reserve Bank of Australia (RBA) had previously kept the cash rate unchanged at 4.35%, focusing on inflation risks. The tight labour market continues to pose a challenge for controlling inflation, which remains a primary concern for the RBA.

Overall, the data reflects a mixed employment landscape, with significant gains in part-time employment and increased participation, but rising unemployment and a slight uptick in underemployment.

Global

• Policymakers in the U.S. signal extended disinflation outlook.
• U.S. building permits drop in April, pointing to potential housing slowdown.
• Financial stability unchanged amid inflation & strong labour market in the U.S.
• China’s industrial production surges while retail sales growth slows in April 2024.
• Japan's trade deficit widens in April, as imports surge.
• Canada's inflation rate eases to lowest since March 2021.
• UK inflation rate eases to 2.3% in April.

Policymakers in the U.S. signal extended disinflation outlook.

In recent U.S. Federal Reserve (Fed) meeting minutes, policymakers expect inflation to return to 2% over the medium term but note recent data hasn't increased their confidence in progress.

They stated that disinflation may take longer than anticipated, with some officials open to further tightening if inflation risks worsen. Despite ongoing inflation and a tight labour market, the Fed kept the federal funds rate at 5.25%-5.50% for the sixth consecutive time, supported by solid economic growth.

U.S. building permits drop in April, signalling potential housing slowdown.

In April, U.S. building permits fell by 3%, marking the lowest level since December 2022 and falling short of market expectations. This decline indicates potential future slowdowns in housing supply and construction activity, influenced by broader economic challenges and regional variations.

Financial stability remains unchanged amid inflation and strong labour market in the U.S.

The U.S. Federal Reserve Board's 2023 "Economic Well-Being of U.S. Households" report shows that financial stability for U.S. adults remained mostly unchanged from 2022, despite high inflation and a robust labour market. Conducted in October 2023, the survey covered financial well-being, income, employment, and other key areas.

In 2023, 72% of adults reported being financially okay or comfortable, a slight decrease from 73% in 2022 and 78% in 2021. Inflation was a major concern, with 65% stating that price increases worsened their financial situation. Low-income adults faced higher financial stress, with 17% unable to pay all their bills.

Emergency preparedness remained stable, with 63% able to cover a US$400 expense using cash, and 13% unable to pay it by any means. 48% percent had money left after monthly expenses, like 2022 but below pre-pandemic levels. Employment indicators were steady, with 33% receiving a raise and 13% asking for one.

New topics in the report included homeowners' insurance, caregiving, and childcare, which represented a significant cost for families. Parents using paid childcare spent 50-70% as much on it as on housing.Governor Michelle W. Bowman emphasised the report's importance in understanding household financial conditions and economic challenges.

China’s industrial production surges while retail sales growth slows in April 2024.

In April, China's industrial production surged by 6.7% year-on-year, surpassing market expectations of 5.5% and exceeding the previous month's 4.5% growth. Monthly industrial output increased by 0.97%, with a year-to-date growth of 6.3% for the first four months, driven by sustained government support measures.

In contrast, China's retail sales grew by 2.3% year-on-year, falling short of market forecasts of 3.8% and down from March's 3.1% growth. This was the smallest increase in 15 months despite government efforts to boost consumption. Monthly retail trade remained nearly flat, rising by just 0.03%, with year-to-date growth for the first four months at 4.1%.

This disparity suggests that while China's industrial sector benefits from government support, consumer spending remains subdued, indicating potential challenges in stimulating domestic consumption.

Japan's trade deficit widens in April, as imports surge.

In April, Japan's trade deficit widened compared to the same month the previous year, surpassing market expectations.

Exports increased year-on-year for the fifth consecutive month, although the growth was below the anticipated 11.1%. This rise was driven by continued shipments to key trading partners, particularly the US and China.

Imports saw the strongest growth in 14 months, reaching a four-month peak, reversing a revised 5.1% decline in March. This surge was primarily due to higher purchases of mineral fuels.

Canada's inflation rate eases to lowest since March 2021.

In April, Canada's annual inflation rate eased, aligning with market expectations and marking the lowest rate of consumer price growth since March 2021. This trend is consistent with the Bank of Canada's forecast that inflation will remain around 3% in the first half of the year and fall below 2.5% in the second half, suggesting that rate cuts may be approaching.

The slowdown in inflation was primarily due to reduced price growth for food, which decreased in March, with lower costs in grocery stores and restaurants. Shelter inflation also moderated slightly, driven by high mortgage costs due to the Bank of Canada's tight monetary policy.

Meanwhile, deflation in household operations, and clothing and footwear, slowed. However, inflation in transportation rose slightly, driven by an increase in gasoline prices. On a monthly basis, the Canadian Consumer Price Index (CPI) increased by 0.5%.

UK inflation rate eases to 2.3% in April.

The annual inflation rate in the UK eased to 2.3% in April 2024, the lowest since July 2021, down from 3.2% in March and slightly above market forecasts of 2.1%. The largest downward pressure came from falling gas and electricity costs, following the lowering of the Office of Gas and Electricity Markets (Ofgem) energy price cap in April. Additionally, food prices slowed to their lowest since November 2021, and recreation and culture prices also decreased.

The cost of motor fuels exerted the largest upward pressure on prices. The average price of petrol increased, and there were also price hikes in restaurants, hotels, and miscellaneous goods and services. Compared to the previous month, the Consumer Price Index (CPI) rose by 0.3%.

Crypto news

Bitcoin sets new records in Japan, Argentina, and Philippines' local currencies.

On May 21, Bitcoin (BTC) reached all-time highs in numerous countries in Asia and South America after experiencing a 7% surge in 24 hours, bringing it closer to its six-week high of US$71,650.

In Japan, BTC reached an all-time high of 11.2 million yen, surpassing 11 million yen for the first time. This surge is partly due to the yen's recent weakening against the US dollar, losing 10% since January. In Argentina, Bitcoin peaked at 63.8 million Argentine pesos, slightly exceeding the March high, amidst the country's battle with inflation (currently at a staggering 290%) and currency devaluation.

The Philippines also saw a record high, with 1 Bitcoin briefly valued at 4.18 million pesos, surpassing mid-March highs. Other nations, including Britain, Australia, Canada, Chile, Colombia, Egypt, Israel, Norway, India, South Korea, Taiwan, and Turkey, have also witnessed Bitcoin prices approaching or matching their mid-March peaks.

Trade BTC/AUD on BTC Markets.

Pendle DeFi protocol hits record US$5.78b TVL amid surge in ETH prices & yield opportunities.

Pendle, a decentralised finance (DeFi) platform, has reached an all-time high in total value locked (TVL), surpassing US$5.78 billion. This represents a significant increase from US$4.08 billion at the start of May and a substantial growth from US$233.67 million at the beginning of 2024.

Pendle's TVL, driven by the rise in Ethereum (ETH) prices and increased optimism about potential approval of spot ether exchange-traded funds (ETFs), now stands at over 1.55 million ETH, nearing its peak of 1.6 million ETH.

Pendle’s platform separates yield-bearing cryptocurrencies into principal and yield tokens, allowing users to earn fixed yields, go long on yield by purchasing more yield tokens, and provide liquidity.

The platform's growth is attributed to users depositing various crypto assets, including wrapped eETH and ezETH tokens, to earn high yields. Pendle's eETH smart contract holds 365,503 wrapped eETH tokens, about 31.94% of the total supply, and is the third-largest holder of Ethena’s synthetic dollar USDe, holding over US$369 million.

Pendle's rise reflects high demand for its products, which offer attractive yields for ETH and stablecoins like USDe. Despite a recent 5.8% drop in the price of its native token, PENDLE, the token has increased by 37.6% over the past week, trading at US$6.00.

Trade ETH/AUD on BTC Markets.

Pendle is coming to BTC Markets in June. Learn more about Pendle on our blog.

SOL hitting US$170, eyes US$200 by month end.

Solana's native token SOL is leading the recent crypto rebound, reaching US$170, its highest in over a month. It's up nearly 7% in 24 hours and over 40% from May's low. On a weekly basis, SOL gained 17%, outperforming most in the CoinDesk 20 Index, trailing only Chainlink, which benefited from news of a fund tokenisation pilot partnership.

Daniel Cheung, co-founder of digital asset hedge fund Syncracy Capital, sees SOL's strength as remarkable and believes it's the top trade of this cycle. He's confident SOL could hit US$200 by month-end and reach new highs soon.

SOL previously peaked at US$260 in November 2021. The current surge is driven by factors like meme coin trading, stablecoin volumes, and decentralised finance (DeFi) activity. Network upgrades, including Firedancer by Jump Crypto, and growing interest in restaking also contribute to SOL's momentum.

Buy SOL/AUD on BTC Markets.

Regulation roundup

Venezuela cracks down on crypto mining for stable power supply.

The Venezuela government has taken a firm stance against cryptocurrency mining due to its heavy electricity usage. The Ministry of Electric Power plans to disconnect mining farms from the national grid to regulate excessive energy consumption and ensure a stable power supply for the population.

This decision follows the prohibition of crypto mining in Venezuela as declared by the National Association of Cryptocurrencies. Recent actions include the confiscation of 2,000 mining devices in Maracay as part of an anti-corruption effort. The government aims to stabilise the national power supply, which has suffered from recurring blackouts since 2019, impacting residents’ daily lives and the economy.

In Venezuela, the government's crackdown on mining is part of an anti-corruption effort, leading to the arrest of officials like Joselit Ramírez, the ex-head of the National Superintendency of Crypto Assets.

Governor Rafael Lacava urges public cooperation in identifying illegal mining, while past actions include nationwide shutdowns in 2023 amid corruption investigations involving the state oil company.

Compliance conversations

US authorities arrest two in US$73m crypto scam bust.

Two individuals, Daren Li and Yicheng Zhang, were arrested by U.S. authorities for orchestrating a money laundering operation. The scheme involved channelling more than US$73 million through American financial institutions and converting the funds into Tether's USDT cryptocurrency.

Li, Zhang, and their associates allegedly operated a transnational criminal network that laundered millions of dollars from fraudulent "pig butchering" crypto scams, where victims were convinced to invest large sums only to be swindled. The defendants purportedly directed co-conspirators to establish U.S. bank accounts in the name of shell companies. Victims were persuaded to transfer millions into these accounts, which were then exploited to launder the illicit funds.

The Department of Justice (DOJ) disclosed that over US$73 million was funnelled through U.S. financial institutions into bank accounts in the Bahamas and converted into the cryptocurrency USDT. Furthermore, a cryptocurrency wallet linked to the scheme received over US$341 million.

"Pig butchering" scams, lucrative for criminals, have raised alarms after a US$9 million scheme targeting over 70 U.S. citizens was seized by the DOJ in November 2023. Regulators are stepping up efforts to combat scams, policy and industry guidelines are proposed to protect investors.

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 20/05/2024.