Weekly Crypto Wrap: 29th June 2023

$50k Bitcoin giveaway: Week 1 winners!

We are excited to announce the winners of the Week 1 prize draw, who have each won $5,000 in Bitcoin. Congratulations to:

• Winner #1: Harrison - NSW.
• Winner #2: Andy - VIC.

Now, it's time for Week 2 of the giveaway. It's easy to enter. Simply log in and make a trade of $10 or more before Wednesday, July 5th, at 11:59pm AEST.

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

TLDR

• Week 1 winners announced from our $50k Bitcoin giveaway!
• New trading pair: ETH / USDT is now live on BTC Markets.
• Our CEO considers the future of crypto on ABC’s The Business.
• Bitcoin’s recent surge has captured the market's attention.
• Bullish sentiment from institutional investors on BlackRock's news.
• Fidelity Investments reportedly files for spot Bitcoin ETF.

BTC Markets in the news

ABC’s Business Segment: ‘Does BlackRock's Bitcoin ETF signal the end of crypto winter?’

Watch BTC Markets CEO Caroline Bowler as she discusses the potential end of the "crypto winter" on ABC: The Business, highlighting BlackRock's Bitcoin ETF application as a significant milestone. 

BTC Markets announcements

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

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

Recapping Blockchain Week 2023.

Our CEO Caroline Bowler participated in a panel discussion titled 'The Future of Digital Currency Exchanges: Trends and Predictions for the Next Decade’ at Blockchain Week 2023.

She also engaged in a fireside chat with Jonathan Hatch, Solicitor & Senior Advisor at the ASIC Innovation Hub, discussing the delicate balance between fostering innovation and upholding regulatory objectives.

Tomorrow, the focus will shift towards exploration, disruption, and the path forward for the digital assets industry. Caroline will sit with Michael Meisels from Chainalysis to delve into the use cases of blockchain data, ranging from compliance safeguards to customer insights.

Tax season is just around the corner. Are you prepared?

If you missed our live tax webinar featuring our CEO Caroline Bowler and Koinly's Head of Tax, Danny Talwar, don’t stress. You can catch the session on YouTube at your convenience.

Additionally, Koinly are offering an exclusive 30% discount on your initial tax report. Just apply the code BTC23 during the checkout process on Koinly.com.au. Terms and conditions apply. For more details, refer to our tax blog. For a detailed list of our tax partners and the types of reports we offer, please, visit our tax support article.

Effortlessly move your coins from Binance to BTC Markets.

Learn how to seamlessly transfer your cryptocurrency from Binance to your BTC Markets account with our comprehensive guide. Follow our step-by-step instructions for a smooth and hassle-free transfer process.

The week ahead 

Upcoming economic events.

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

June 30th: China NBS Manufacturing PMI. France Inflation Rate. Euro Area Unemployment and Inflation Rate. United States Core PCE Price Index Month on Month, Personal Income, and Personal Spending.

July 3rd: Japan Business Confidence and China Caixin Manufacturing PMI.

July 4th: Australia’s Interest Rate and Germany’s Balance of Trade. United States ISM Purchasing Managers Index (PMI).

July 6th: Australia Balance of Trade. United States FOMC meeting minutes.

Economic Calendar (tradingeconomics.com)

State of crypto

Bitcoin’s (BTC) leap to US$31,431 on Friday has captured the markets attention. The surge in bullish sentiment has been attributed to institutional investors in the US anticipating the approval of BlackRock's spot Bitcoin ETF application.

BlackRock's timing could have been influenced by the EU's passing of the MiCA regulatory framework and the SEC's openness to approving applications from traditional finance players in the crypto space. Further adding to positive sentiment, asset manager Fidelity Investments reportedly prepared a filing to launch its Bitcoin spot-based exchange-traded fund (ETF).

Ethereum’s (ETH) performance has been lacklustre compared to BTC, with the ETH/BTC ratio declining and concerns about the SEC cracking down on DeFi and Ethereum's move towards centralisation. Investors are looking to the ‘Personal Consumption Expenditures‘(PCE) print for May which is due out this week` as this could influence the ongoing crypto rally.

Overall, these developments in the crypto market, including BTC's rally, ETH's relative weakness, BlackRock's application, and rumours of Fidelity’s ETF filing, have significant economic implications, and monitoring them is crucial for understanding market sentiment.

Weekly crypto close.

Here are the weekly trading stats as of Monday, June 26th at 10:00am AEST from Tradingview in USD.

Bitcoin ended the trading week on a high note, recording an impressive gain of 15.65%, closing at US$30,462.66. Ethereum also experienced positive momentum, with a gain of 10.33% and settling at US$1,898.80. XRP struggled to maintain its position in the green, but still managed a modest gain of 0.72% and closed the week at US$0.4903. Meanwhile, Litecoin had an outstanding week, surging by 14.26% and reaching a price of US$88.20. ADA also had a strong performance, gaining 11.92% and closing at US$0.2921.

Bitcoin's market capitalisation saw a 3.74% increase, maintaining its dominance level at 51.51%. The overall cryptocurrency market capitalisation rebounded significantly, experiencing a gain of 11.55% and closing the week at US$1.148 trillion.

Monitoring Bitcoin's dominance is crucial as it provides insight into the overall sentiment of the digital assets market. This metric becomes particularly significant given the complex regulatory landscape surrounding altcoins and the potential approval of a Bitcoin spot ETF in the United States.

Year-to-date.

In terms of year-to-date performance, Bitcoin is leading the pack up 82.44%, currently trading at US$30,079 whilst Ethereum is trailing behind with a 53.51% increase, trading at US$1,832.49.

XRP is holding on to its gain of 36.91% for the year, trading at US$0.462 and Litecoin is up 18.86%, currently trading at US$83.18. Lastly, Cardano is sitting on a 9.44% annual gain currently trading at US$0.26.73.

Market reflections

Australia

Australia's monthly inflation rate in May 2023 slowed to 5.6%, reaching its lowest level in a year due to softer growth in housing and transport prices. Recreation and culture prices also exhibited a slowdown, while food and non-alcoholic beverages inflation remained steady. However, even with this decline, inflation in Australia remains above the Reserve Bank of Australia's (RBA) target range of 2-3%.

The lower inflation rate suggests a potential easing of price pressures, providing the RBA with flexibility in its monetary policy decisions. This data could influence the central bank's considerations regarding interest rates in the coming months. The decline in inflation was primarily driven by lower fuel prices, which dropped by 8% over the year, and a decrease in holiday travel and accommodation costs, down by 11% in May. Excluding volatile items, the annual inflation rate modestly declined to 6.4%, indicating persistent price pressures in the broader economy.

Rising rents, fuelled by a shortage of properties, have been a significant contributor to inflation, with rental prices rising by 6.3% over the past year. Energy prices have also contributed to inflationary pressures, with electricity costs increasing by 14.1%. While interest rates have helped contain price pressures in some discretionary sectors, inflationary pressures persist in other areas.

The RBA remains data dependent as it nears the end of an aggressive tightening cycle. The central bank aims to balance its interest rate decisions to achieve its inflation target while avoiding a sharp increase in unemployment. Concerns remain that price pressures could persist as wage growth accelerates, despite signs of an economic slowdown, as evidenced by the modest 0.2% expansion of the economy in the first quarter of the year.

Global

US

Fed Chair Powell, speaking at the ECB Forum on Central Banking, emphasised the likelihood of further restrictions and signalled two more interest rate hikes this year. Powell also expressed openness to consecutive-meeting rate increases.

Despite acknowledging the possibility of a recession, Powell highlighted the resilience of the US economy. The Fed kept the funds rate unchanged at 5%-5.25% in June but indicated potential for a year-end increase to 5.6% if the economy and inflation remain uncurbed.

This pause comes after ten consecutive hikes, elevating borrowing costs to levels not seen since September 2007. Projections for the funds rate were revised upwards for 2023 (5.6% vs 5.1% in March), 2024 (4.6% vs 4.3%), and 2025 (3.4% vs 3.1%).

Last week during the ‘Semi-annual Monetary Policy Report’ to Congress, Fed Chair Powell further reiterated the Fed's commitment to its dual mandate of maximum employment and stable prices. While further interest rate hikes are expected, the Fed will assess incoming data and risks before making decisions. Inflation remains a concern and achieving the 2% target will require more time according to Powell.

The funds rate target remained steady in June, but a potential increase was signalled if needed. The Fed aims to address inflation while monitoring economic conditions. Strong US economic data, including robust durable goods orders, indicates resilience despite higher rates.

Japan

Japan's annual inflation rate unexpectedly fell to 3.2% in May, missing market forecasts of 4.1%. Core inflation, excluding food and energy, dipped to 3.2%, slightly above market expectations. Monthly consumer prices remained flat in May.

Canada

The latest data revealed that Canada's annual inflation rate in May stood at 3.4%, marking its lowest pace in two years. This deceleration has significant implications, casting doubt on the need for an imminent interest rate hike. The subdued inflation rate weakens the case for policymakers to consider tightening monetary policy in July.

UK

The Bank of England surprised the market by raising its policy interest rate by 50 basis points to 5.0% during its June meeting, aiming to address persistent inflation.

British inflation remained unchanged at 8.7%, well above the central bank's 2% target. The central bank expressed its commitment to further rate hikes if needed.

Meanwhile, the GfK Consumer Confidence indicator in the UK improved in June, showing growing optimism among households whilst retail sales for May increased.

Euro area

ECB President Lagarde expressed concerns about persistent inflation and wage growth in the Euro Area during the ECB Forum on Central Banking. The ECB raised interest rates by 25 basis points in June and intends to continue tightening policy.

The Ifo Business Climate indicator for Germany declined for the second consecutive month, reaching its lowest level since December. Manufacturers reported a decrease in new orders, citing global interest rate hikes' impact on demand.

Germany's GfK Consumer Climate Indicator dropped below expectations as consumers grew less positive about the economy and their incomes due to high inflation. However, there was a slight increase in willingness to make purchases, indicating some resilience amid declining confidence.

Italy's annual inflation rate fell to a 14-month low of 6.4% in June 2023, below market expectations of 6.8%. This decline was primarily due to base year effects from lower energy costs. The Consumer Price Index (CPI) slowed whilst the core inflation rate eased to 5.6%.

Alt action

AAVE surges 27% as a whale accumulates prior to GHO stablecoin mainnet debut.

AAVE, the governance token of Aave, experienced a 27% surge on June 25, following a period of stagnation. The price increase was attributed to the accumulation of AAVE tokens by an unidentified whale investor.

The whale acquired 182,152 AAVE tokens worth US$13.2 million from various exchanges. The whale now holds 413,373 AAVE, valued at over US$29.7 million, along with other tokens.

The intention behind the accumulation remains uncertain, whether for speculation or voting power. AAVE serves multiple purposes within the Aave ecosystem, including staking, fee payment, and voting on proposals.

AAVE is currently trading at US$62.87.

Trade AAVE now on BTC Markets.

The Big 3

Fidelity Investments reportedly files for spot Bitcoin ETF, joining BlackRock in the hunt.

Fidelity Investments, a prominent asset management firm, has reportedly filed for a spot Bitcoin exchange-traded fund (ETF) in the United States.

This move adds to the growing list of major players, including BlackRock, WisdomTree, Invesco, Bitwise, Valkyrie, 21Shares, and Ark Invest, seeking approval for a Bitcoin ETF.

Ark Invest believes their filing is the first in line for approval, with other applicants expected to make similar amendments to their filings at minimal cost.

While Bloomberg Intelligence ETF analyst James Seyffart suggests that Ark and 21 hares have a favourable position for a spot Bitcoin ETF, Bloomberg Intelligence itself estimates only a 50% chance of approval for such an ETF this year, which is a significant improvement from just over a week ago.

Trade BTC now on BTC Markets.

Cross-border stablecoin payments testing underway at SAP.

SAP, the multinational software company, is currently conducting tests on Ethereum's Goerli testnet to facilitate cross-border payments using USDC.

This initiative, which has been in progress since the previous quarter, is open to interested businesses worldwide. Participants will receive USDC on the test network to pay for sample invoices, aiming to assess market interest and gather feedback on the solution.

SAP recognises the existing challenges of slow and expensive cross-border payments, often taking up to seven days for funds to transfer.

In response to discussions with small and medium-sized businesses, SAP believes that digital money offers a solution by addressing pain points such as high fees, long transaction times, and lack of transparency.

Looking ahead, SAP plans to integrate blockchain-based payment processes into its mid-market enterprise resource planning (ERP) solutions.

This integration will enable a seamless experience of issuing invoices that allow customers to pay in digital currency, incorporating digital currency payments into regular ERP payment runs.

SAP is exploring additional crypto solutions beyond cross-border payments, including scenarios such as commerce and employee payments, where digital or cryptocurrencies may present appealing options.

Trade ETH now on BTC Markets.

Evidence challenges SEC's claim of 'Common Enterprise' between Ripple and XRP"

New evidence presented by John Deaton, an attorney advocating for XRP, suggests that the SEC's claim of a "common enterprise" between Ripple and XRP may be weakened.

Deaton highlighted Jaskaran Kambo, a developer unrelated to Ripple, who could undermine the SEC's argument.

This development could be considered by Judge Analisa Torres overseeing the Ripple lawsuit. Deaton also suggests that the judge may examine transactions in XRP's secondary market.

Meanwhile, rumours of a US$5 billion XRP buyback by Ripple were refuted by CTO David Schwartz, stating no specific event aligned with this speculation by market participants.

Trade XRP now on BTC Markets.

Crypto news

First leveraged Bitcoin ETF in the U.S. achieves US$4.2M trading volume since debut.

The Volatility Shares 2x Bitcoin Strategy exchange-traded fund (BITX), the inaugural leveraged cryptocurrency ETF in the United States, commenced trading recently, amassing approximately US$4.2 million in trading volume thus far.

Within the first 15 minutes, the ETF witnessed trades amounting to around US$500K in value, as reported by Bloomberg. Presently, the share price of BITX stands at approximately US$15.48, and saw a high of US$15.90 since the commencement of the trading session.

While several futures-based ETF products are already available for trading in the U.S., the SEC has consistently hindered the launch of spot products. Similarly, other leveraged Bitcoin futures products have faced obstacles in securing the necessary approvals for launch.

ProShares' BITO was the first ETF backed by Bitcoin futures to launch in 2021, generating approximately US$1 billion in trading volume on its debut day and accumulating around US$570 million in assets, according to ProShares.

EDX Exchange reportedly shifts from Paxos to Anchorage for custodial services.

EDX, a recently launched cryptocurrency exchange with support from financial industry giants Citadel Securities, Fidelity Digital Assets, and Charles Schwab, is reportedly preparing to change its custody provider from Paxos Trust to Anchorage Digital.

The decision is driven by EDX's noncustodial business model, aiming to eliminate conflicts of interest, particularly considering regulatory concerns raised by the SEC.

EDX currently offers trading in four cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). Notably, BCH has experienced significant price increases since EDX's launch, rising 81.59% in the past trading week and 98.94% in the last month.

The partnership between EDX and Paxos, initially intended for custody and wallet infrastructure, was announced in October 2022. However, EDX shifted its focus to a non-custodial offering at launch.

Paxos expressed its support for EDX's noncustodial approach and highlighted the possibility of providing regulated custody services once banks and brokers join the platform.

Paxos, a blockchain infrastructure platform, holds a BitLicense from the New York Department of Financial Services. In 2021, it received preliminary conditional approval for a U.S. bank charter from the OCC, but the approval reportedly expired in March.

On the other hand, Anchorage Digital became the first crypto firm to receive a national trust bank charter from the OCC in January 2021. It faced regulatory scrutiny for Anti-Money Laundering deficiencies and subsequently formed a custody network with several crypto exchanges.

EDX is also planning to introduce EDX Clearing, a clearinghouse for settling trades executed on the EDX Markets platform, later this year.

Australian banks defend crypto payment actions.

During a panel discussion at Australian Blockchain Week, executives from major Australian banks defended their decision to impose restrictions on payments to local cryptocurrency exchanges.

Sophie Gilder, Managing Director of Blockchain and Digital Assets at Commonwealth Bank (CBA), revealed that one in three dollars scammed from Australians could be linked to crypto, making it a lever for reducing the impact of scams on customers.

CBA and Westpac have already implemented pauses, limits, and blocks on certain payments to crypto exchanges, citing the growing threat of investment scams.

Regulation Roundup

Australia's token mapping to be "Tech Agnostic," aligning with EU's MiCA.

The Australian Treasury has revealed that its token mapping of digital assets will adopt a "tech agnostic" and "principles-based" approach to define crypto assets.

Trevor Power, an assistant secretary at the Australian Treasury, explained that the framework aims to classify tokens based on their function and purpose, allowing for easy categorisation. The intention is to create a regulatory structure that draws on these principles, rather than being specific to individual tokens.

Power indicated that crypto-specific legislation is expected to emerge around 2024, depending on how it is received by Australian lawmakers. Crypto assets that evolve in terms of their function and utility over time will likely undergo review and, if deemed significant, will be subject to regulation.

The Treasury views token mapping as crucial for understanding the interaction between the crypto ecosystem and Australia's existing financial regulatory frameworks. Power emphasised the need for a robust and tech-neutral approach to account for potential changes in the industry.

The Treasury's consultation process, conducted from February to March this year, aimed to gather input on the token mapping framework, which was introduced in August of the previous year.

Power expressed a desire for the Australian market to attract digital asset firms from the United States and abroad, if they adhere to the token mapping framework, which seeks to balance innovation and consumer protection. Read BTC Markets response to Treasury.

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Prices are accurate as of 11:00 AM AEST, on 29/06/2023.