Weekly Crypto Wrap: 9th March 2023

TLDR

• Dark mode for the mobile app is here!
• RBA announces further rate increases plus US Fed warns of more aggressive rate rises.
• Major digital assets closed the week down.
• Uniswap is developing a mobile wallet app while NFT market could hit $4.5bn by 2025.
• ETH launches 'Smart Accounts' with account abstraction and Ripple takes the lead vs the SEC.
• BTC Markets’ submission to 'Treasury's Token Mapping Consultation Paper.'

Dark mode on the mobile app is here!

We're thrilled to announce that the highly requested dark mode theme is now available on our mobile app! Our designers and developers have been working tirelessly to ensure that this feature is seamlessly integrated into all our platforms.

Learn more about the dark mode mobile app update and what's next on our development road map!  

The week ahead 

March 9th: there will be announcements on the balance of trade for Canada and the USA, the Bank of Canada's interest rate decision, the US job opening, and the continuation of the Fed Chair Powell's testimony. Additionally, China's year-on-year inflation rate will be reported.

March 10th: the Bank of Japan's interest rate decision and the UK's month-on-month GDP numbers will be released.

March 11th: Canada's unemployment rate, and the USA's non-farm payrolls and unemployment rate releases will be made public.

March 14th: Australia's Westpac consumer confidence index, as well as the NAB business confidence will be announced. The UK will release the claimant count change and unemployment rate. The USA will release inflation rate data and CPI stats.

March 15th: China's industrial production year-on-year will be revealed, while the USA's monthly retail sales and PPI will also be announced.

Economic Calendar (tradingeconomics.com)

Market reflections

Australia

The Reserve Bank of Australia (RBA) has announced a 25-basis point increase in the cash rate target and the interest rate on Exchange Settlement balances. The decision comes in response to rising global inflation and a subdued outlook for the global economy, with below-average growth expected for this year and next.

While the monthly CPI indicator suggests inflation has peaked in Australia, goods price inflation is expected to moderate in the coming months, though services price inflation remains high, particularly in the housing market where rents are increasing at the fastest rate in years.

The RBA is targeting an inflation rate of 2-3% and is closely monitoring the labour market, with the unemployment rate at a 50-year low, as well as trends in household spending and the outlook for inflation.

The Board expects further monetary tightening to ensure that inflation returns to target but acknowledges that uncertainties around household spending and the global economy could lead to a range of potential scenarios for the Australian economy.

The Australian share market moved lower, following the US central bank's announcement that it may tighten monetary policy at a faster pace and for longer than previously anticipated.

The Australian dollar tumbled 2.1% to less than US$0.66, reflecting the widening yield gap between US and Australian government bonds, as US rates are set to rise while the Reserve Bank of Australia indicated it is poised to pause soon on rate increases.

USA

US Federal Reserve chairman, Jerome Powell, warned that the US central bank is willing to raise rates more aggressively and to a higher level than previously expected.

Powell’s hawkish rhetoric contrasted with Reserve Bank governor Philip Lowe, who said an interest rate pause was in sight. Goldman Sachs and ANZ warned earlier this week of the growing risk that US interest rates could reach 6%.

The rapid recalibration of the Fed’s policy outlook triggered a sell-off across bond markets, lifting the yield on the two-year Treasury to 5 per cent for the first time since 2007. The growing risk of a hard landing in the world’s largest economy weighed on equity markets, and a stronger US dollar dragged commodity prices lower. The Federal Reserve chairman’s remarks to Congress are pricing in the potential for a 50-basis point increase rise later this month.

State of crypto

For the second week in a row, major digital assets closed the week down and, in the red. Bitcoin lost 4.77%, Ethereum dropped 4.68%, and XRP was down 2.94%. Despite this, Bitcoin is still up 31.43% on the year and is trading at US$21,736, while Ethereum is up 28.87% on the year and currently trading at US$1,540. XRP is up 15.20% on the year and trading at US$0.3905. Bitcoin's market capitalisation fell 0.37% on the week, bringing its current dominance to 43.66%. The overall crypto market cap also saw a 4.41% decline last week, with the total market capitalisation currently at US$962 billion.

Alt Action

Uniswap (UNI) develops a mobile wallet app.

Uniswap (UNI), the popular decentralised exchange, is developing a mobile wallet app to allow users to easily access its platform on the go. The app is expected to offer a simplified user experience that will make it easier for users to trade and access liquidity pools. In an interview with CoinDesk, Uniswap Labs' COO, Hayden Adams, spoke about the company's plans to expand its offerings beyond its core exchange platform. He noted that the mobile wallet app is just one part of its broader strategy to create a comprehensive ecosystem of DeFi products.

Adams also discussed the challenges facing DeFi adoption, particularly the lack of transparency from major tech companies like Apple, which have been slow to embrace cryptocurrency and blockchain technology. Despite these challenges, Uniswap remains committed to driving the growth of the DeFi ecosystem and expanding access to financial services for users around the world. UNI is currently up 18.06% on the year and is trading at US$6.128.

Trade UNI now on BTC Markets!

The Big 3

BTC: Galaxy Research predicts NFT market to hit $4.5bn by 2025.

Galaxy Research predicts that the NFT market will reach a market cap of $4.5 billion in 2025, with Bitcoin having a significant role to play in its growth. According to Statistica, the total market cap of NFT projects on January 15, 2023, was approximately US $846 million.

Bitcoin Ordinals, which are unique identifiers used to differentiate one Bitcoin from another, can be used as inscriptions in NFTs. This makes NFTs (which are unique digital assets that use blockchain technology to verify their authenticity and scarcity), more secure helping to establish their authenticity. They are becoming increasingly popular in the art world, with digital artworks being sold for millions of dollars.

NFTs offer new business models and revenue streams for creators, making them an attractive option for artists and musicians. With Bitcoin's unique features, such as Ordinals, being integrated into the NFT market, it is expected to boost the adoption of NFTs even further. 

Trade BTC now on BTC Markets!

ETH: Ethereum's 'Smart Accounts' launch with account abstraction.

The Ethereum ERC-4337 smart accounts have been launched at WalletCon, marking a major milestone in the development of Ethereum's account abstraction feature. Smart accounts allow for the separation of code and balances, making it easier to build complex dApps without compromising security.

This new feature is a major step towards making Ethereum more scalable and efficient, as it allows developers to build more complex applications on top of the Ethereum network. Ethereum's account abstraction feature is designed to make it easier for developers to build decentralised applications by separating the code and balances of smart contracts.

This means that developers can create more complex dApps without the need for additional smart contracts, which can slow down the network. The launch of the ERC-4337 smart accounts is expected to be a significant milestone in the development of Ethereum and its ecosystem.

Trade ETH now on BTC Markets!

XRP: Ripple takes the lead in the epic battle with the SEC.

In the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC), the latest development could be a significant win for Ripple. The Supreme Court of the United States recently issued a ruling in a similar case that supported the "fair notice" defence, which Ripple has also invoked.

This defence argues that Ripple was not given adequate notice that its actions were in violation of securities laws. The SEC has accused Ripple of selling unregistered securities in the form of XRP, the cryptocurrency used on Ripple's payment network.

Ripple denies the allegations and claims that XRP is not a security. This recent ruling by the Supreme Court could bolster Ripple's defence in the ongoing lawsuit and may even lead to the case being dismissed.

Trade XRP now on BTC Markets!

Crypto news

VCs Prefer DeFi over CeFi for crypto funding.

According to an article published by Blockworks, Decentralised Finance (DeFi) has become the new favourite for Venture Capital (VC) funding, with billions of dollars being invested in the DeFi sector. Outlier Ventures, a data analysis company, found that DeFi has received more funding than any other sector in the crypto industry.

DeFi projects provide decentralised alternatives to traditional financial systems, offering services such as lending, borrowing, and trading. The sector's growth has been driven by the transparency and control it offers users over their financial transactions. As DeFi continues to mature, more traditional financial institutions are expected to invest in or partner with DeFi projects to stay competitive.

RBA to test 14 scenarios for digital Australian dollar in pilot program.

Fourteen companies, including ANZ and Commonwealth Bank, will participate in a pilot to test a central bank digital currency (CBDC) in Australia, according to the Reserve Bank of Australia (RBA). The companies will test a digital version of central bank-issued Australian dollars using a real claim on the RBA.

The use cases proposed by industry to be tested alongside the RBA include offline payments, trading digital assets in environmental markets, facilitating commerce on Web3, settling corporate bonds, and trading foreign exchange on blockchain systems. The RBA will use the pilot to develop its technology systems and understanding of the risks associated with the implementation of a CBDC.

The pilot will help add to policymakers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy, said RBA assistant governor Brad Jones. The RBA and the Digital Finance Cooperative Research Centre selected the 14 use cases from 142 submissions expressing interest in the pilot. A live pilot will take place over the coming months and a final report will be published mid-year.

Multinational’s piling into Web3, NFTs, and the metaverse.

Multinational corporations are increasingly filing trademark applications for Web3, NFTs, and the metaverse as the digital world continues to expand. Companies such as General Motors, Lacoste, and Walmart have been actively filing trademark applications for their brands and products despite the recent downturn in related markets.

Other well-known brands, including Pedigree, Nationwide, Jameson, Yves Saint-Laurent, and the National Geographic Society, have also filed trademark applications covering Web3, NFTs, the metaverse, and crypto-related products. According to intellectual property lawyers, there has been a record number of trademark applications for NFTs, metaverse, and crypto-related products in 2022, indicating that companies are willing to invest in the digital future and secure their place in it despite the volatile markets.

Trademarks will play a critical role in defining and protecting brand identities in the realms of Web3, NFTs, and the metaverse, and smaller businesses and startups are likely to follow suit to stay competitive and relevant in these emerging markets.

Regulation Roundup

Australia’s potential timeline for cryptocurrency legislation revealed in internal documents.

Australia's crypto legislation may be a year away or more, according to internal documents from the Treasury Department. Consultation papers on crypto licensing and custody are set to be released in Q2 2023, followed by stakeholder roundtables in Q3, but final submissions to the cabinet may not occur until later in the year, delaying a decision on legislation until 2024 or beyond.

The Treasury reportedly acknowledged stakeholders may be frustrated by the perceived delay. Meanwhile, the government has established a "crypto policy unit" within the Treasury department to explore requirements for crypto licenses and strengthen consumer protections.

BTC Markets updates

BTC Markets’ submission to 'Treasury's Token Mapping Consultation Paper.'

A note from Caroline Bowler, CEO of BTC Markets:

“BTC Markets were in the room on Tuesday evening to hear the Treasurer, Dr. Jim Chalmers, address Australian senior business leaders. Dr. Chalmers spoke of how digitisation was a priority for him, positioning Australia to benefit from the digital revolution. Australia is to take advantage of cutting-edge innovative opportunities, in his words “best captured by a collaborative working relationship between industry and government.” The Treasurer later went on to describe markets as a powerful and positive way to address our economic challenges.

Labor has history with embracing non-traditional, market-orientated economic policies, during the financial deregulation years. A similar opportunity presents itself today. A pragmatic approach to governing that embraces digital assets will strengthen our modern economy and buffer it from the “big shift” underway.

BTC Markets has long understood the need for appropriate, proportionate regulation of our sector. In our policy consultation submissions, we look to ensure that any regulation protects Australian crypto investors while supporting the Australian digital economy in the longer term. We believe that embracing digital assets, including cryptocurrency, is a key path to achieve that.”

BTC Markets has submitted a response to the 'Treasury's Token Mapping Consultation Paper' reiterating our stance that appropriate and proportionate regulation is needed for the digital asset industry. The Treasury is proposing certain crypto products be considered as financial products and be regulated similarly to their traditional counterparts. This will bring digital currency exchanges into the mainstream Australian financial ecosystem, attracting mainstream investors and international investment.

However, there may be unintended side effects, such as confusion for retail investors and the potential for international digital asset exchanges to dominate the domestic market. The proposed regulatory approach could also breakdown when it comes to Decentralised Finance (DeFi).

Read the complete submission to Treasury on our website.

Scam Watch!

Last week we posted a list from ASICs of the top 10 signs of a potential crypto scam. Each week, we are going to walk through a scam in more detail.

As more people are drawn to the world of cryptocurrencies, the potential for scams and fraud also rises. The decentralised nature of cryptocurrencies and the promise of high returns have made it an attractive target for scammers, resulting in investors losing millions of dollars.

However, there are steps that you can take to protect yourself from falling victim to these scams. By being aware of the red flags and doing your due diligence, you can mitigate the risks and safely enter the cryptocurrency space.

One common crypto scam is receiving an unsolicited offer out of the blue. Scammers may contact individuals through email or social media, offering investments in a new cryptocurrency or an opportunity to invest in an existing one. The offer may appear to be a once-in-a-lifetime opportunity with promises of guaranteed returns or exclusive benefits.

A sample case of this scam is when you receive an email from someone claiming to be from a cryptocurrency exchange like BTC Markets. The scammer offers you an investment opportunity in a new or existing cryptocurrency that promises high returns. You’re excited about the prospect of making a profit and invest your money or crypto. Unfortunately, it turns out to be a scam, and your money or crypto is gone.

To avoid falling victim to this type of scam, it is essential to do your research and be wary of unsolicited offers. Always verify the legitimacy of the company or individual offering the investment opportunity.

Never invest more than you can afford to lose and always seek advice from a trusted financial advisor before making any investment decisions. Remember, if it seems too good to be true, it probably is.

To learn more, visit ASIC's website.

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Prices are accurate as of 11:00 AM AEDT, on 09/03/2023