Weekly Crypto Wrap: 9th May 2024

TLDR

• Render (RNDR) is coming to BTC Markets!
• Discover our OTC Desk, offering global liquidity for your trading needs.
• Bitcoin's key trading indicators show bullish signs, after cooling off.
• MicroStrategy now holds more Bitcoin than any country, surpassing US$14 billion.
• Grayscale Bitcoin Trust gains 2.4%, sees first inflows in 78 days.
• Tether's (USDT) record Q1 profits highlight its dominance and rising competition.
• The RBA held Australia's cash rate at 4.35%, amid inflation concerns.

BTC Markets announcements

New listing: Render (RNDR) is coming to BTC Markets.

We are excited to share that Render (RNDR) will be the next addition to the BTC Markets exchange. The Render Network is a decentralised GPU rendering platform that empowers artists to enhance their rendering work using high-performance GPU nodes worldwide.

Utilising a blockchain marketplace for idle GPU compute, it allows artists to scale rendering tasks more efficiently and affordably compared to centralised GPU cloud services, resulting in significant cost savings and vastly improved rendering speeds.

Read more about Render (RNDR) on our blog and stay updated on the latest developments regarding this listing by following us on X/Twitter or LinkedIn.

Ticker News ‘Crypto Corner’: HR solutions for a rapidly changing tech landscape.

Karen Cohen, Founder and Director of Emerging Tech Talent, sits down with BTC Markets CEO, Caroline Bowler to discuss the role of innovative HR in navigating tech evolution. They cover community building, talent services, and engaging educational and consulting approaches.

The conversation also addresses challenges women face in tech, the role of male allies, and beginner tips for getting into crypto.

Watch now on YouTube or Ticker News.

Previous episode: Exploring Web3, virtual reality artistry and NFT innovation with Giant Swan on ‘Crypto Corner’.

In this previous episode, sculptor and digital artist, Giant Swan, talks about his journey into the world of virtual reality artistry and NFT innovation. Watch the full episode here.

Tune in to our YouTube channel or Ticker News to watch the latest episode.

CEO’s corner: Vanessa Ronan Pearce from Payments NZ

Check out Caroline's one-on-one with Vanessa Ronan Pearce, Strategic Projects Lead at Payments NZ, as they discuss the strategic priorities of Payments New Zealand.

Watch the video here.

OTC Desk: Unlocking global liquidity, tighter spreads, and T+0 settlements.

At BTC Markets, our OTC desk is your dedicated partner in achieving a variety of financial objectives. We specialise in helping clients reposition their SMSF holdings, assisting them through the complexities of EOFY, and facilitating the release of additional capital during the tax season. Our commitment to personalised service means that we work closely with businesses engaged in crypto payments, ensuring they optimise the value of their frequent conversions to AUD.

Whether you're a seasoned trader looking for a discreet and highly efficient means to execute substantial positions, or a business seeking a streamlined solution to manage your crypto portfolio, our OTC team is here to empower you. With access to global liquidity, tighter spreads, and T+0 settlements, we offer a comprehensive range of services tailored to meet your unique needs.

Schedule a call with our team of expert traders today.

State of crypto

• Bitcoin's key trading indicators show bullish signs after cooling off.
• MicroStrategy now holds more Bitcoin than any country, surpassing US$14 billion.
• Grayscale Bitcoin Trust gains 2.4%, sees first inflows in 78 days.
• Tether's record Q1 profits highlight its dominance and rising competition.

Bitcoin's key trading indicators show bullish signs after cooling off.

Last Thursday, Bitcoin's price dipped to US$56,911.84 before recovering to close the day in the US$59k range. On Friday, it surged 6.47%, breaking resistance to close at $62,882.01. It briefly reached $65,500 before falling back to the $62,000 range. According to crypto analysts, two key Bitcoin indicators, the funding rate, and the 3-month annualised basis rate, showed negative readings but have stabilised, suggesting a potential uptick.

These indicators cooling might signal a consolidation phase before a possible price increase, reflecting growing optimism among traders about Bitcoin's prospects. This optimism is supported by a recovery in Bitcoin's price and stabilising funding rates. The Bitcoin funding rate helps balance leverage in perpetual futures contracts, aligning contract prices with the spot price of Bitcoin, thus mitigating risks of price manipulation and volatility.

MicroStrategy now holds more Bitcoin than any country, surpassing US$14 billion.

MicroStrategy has become the largest corporate holder of Bitcoin, now owning over US$14 billion worth, surpassing even the United States in holdings. The company acquired an additional 25,250 Bitcoins in early 2024, bringing its total to 214,400 BTC, representing more than 1% of all Bitcoins.

This strategic accumulation reflects a significant appreciation in value, as Bitcoin's current price substantially exceeds MicroStrategy's average purchase price. Despite market volatility, the firm's commitment to holding Bitcoin remains steadfast, driven by a long-term investment perspective.

FTX claims to have ample funds to repay victims; plans full compensation plus interest.

Collapsed cryptocurrency exchange FTX reports having over US$16 billion, significantly more than the US$11 billion needed to repay customers. The company plans to fully compensate all non-governmental creditors, covering 100% of their bankruptcy claims plus interest.

This comes after the company liquidates its remaining assets, primarily investments from Alameda Research and FTX Ventures. FTX co-founder Sam Bankman-Fried was sentenced to 25 years for fraud. Approval from a US bankruptcy court is pending for the reorganisation plan.

Grayscale Bitcoin Trust gains 2.4%, sees first inflows in 78 days amid plans for lower fee spinoff.

Shares of Grayscale Bitcoin Trust (GBTC) appreciated by 2.4% following the first positive inflows since January, ending a 78-day period of net outflows. This marks a significant shift for GBTC, which has faced substantial withdrawals since its transition to an ETF, largely attributed to its comparatively high fees.

Despite these challenges, GBTC recorded US$63 million in inflows on Friday while managing assets totalling US$18.08 billion. Its position as the leading spot Bitcoin ETF by assets, however, faces competition from BlackRock's iShares Bitcoin Trust.

In response, Grayscale is planning to introduce a Bitcoin Mini Trust with lower fees, pending approval from the Securities and Exchange Commission. This move is intended to enhance Grayscale's attractiveness to investors seeking exposure to Bitcoin without direct ownership of the cryptocurrency, especially in a market environment where economic conditions and interest rate expectations are affecting ETF performance.

Source: TheBlock.co

Robinhood crypto faces possible SEC enforcement over token listings.

Robinhood Markets, a prominent U.S. retail trading platform, announced on May 6, 2024, that it has received a Wells notice from the U.S. Securities and Exchange Commission (SEC). Issued on May 4, this notice is a preliminary step by the SEC indicating potential enforcement action regarding certain cryptocurrency tokens traded on Robinhood's platform. A Wells notice does not imply any wrongdoing but serves as a formal indication that the SEC is considering enforcement.

Robinhood strongly contends that the crypto assets listed on its platform are not securities, as stated by Dan Gallagher, the company's chief legal, compliance, and corporate affairs officer. Robinhood stated that it is prepared to demonstrate the lack of basis for any legal action against its crypto services and is ready to defend its position vigorously in court if necessary, according to CEO Vlad Tenev.

The SEC has been assertive in its stance that most crypto tokens are securities and should comply with registration requirements, a position challenged by major crypto firms including Coinbase, which argues that cryptocurrencies do not meet the traditional definitions of securities.

Tether's record Q1 profits highlight its dominance and rising competition in the stablecoin market.

Tether has achieved a record US$4.52 billion profit in Q1 2024, solidifying its lead in the stablecoin sector despite ongoing regulatory scrutiny. A significant portion of these profits, US$3.52 billion, came from gains in Bitcoin and gold investments, reflecting the benefits of incorporating these assets into its reserves. An additional US$1 billion was generated from U.S. Treasury holdings, benefitting from the current high-interest rate environment.

Despite Tether’s success, competition is intensifying, particularly from USDC, which has surpassed Tether in transactional volume, though not in market capitalisation. USDC's recovery from reputational hits and operational challenges, along with enhanced transparency and stability, are contributing factors to its increased usage, especially following Stripe’s reintroduction of crypto payments using USDC.

The weekly crypto close on Tradingview*

The crypto market regained confidence this week, led by a surge in Avalanche (AVAX) which climbed by 10.08%.

Solana (SOL), Chainlink (LINK), Ripple (XRP), and Bitcoin (BTC) also showed gains of 5.69%, 4.13%, 4.00%, and 1.32% respectively.

However, Ethereum (ETH), Litecoin (LTC), and Cardano (ADA) experienced declines of 3.83%, 3.02%, and 0.43% respectively.

Overall, the crypto market capitalisation saw a modest increase of 0.59%, reaching US$2.297 trillion by the end of the week.

*The weekly trading stats as of Monday, May 6th 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:

• Bitcoin (BTC) leads with an impressive gain of 44.82%.
• Solana (SOL) follows closely behind with a solid increase of 41.43%.
• Ethereum (ETH) shows a resilient performance with a gain of 31.14%.
• Litecoin (LTC) holding onto a gain of 12.43%.

*Year-to-date performance as of Thursday, May 9th at 11:00 am AEST approximately. Based on data from Tradingview in USD.

Crypto Fear& Greed Index

Source: alternative.me

The week ahead: economic events

May 9th: China Balance of Trade. United Kingdom Interest Rate.

May 10th: United Kingdom GDP Growth Rate, GDP Annual Growth Rate and Monthly GDP MoM. Canada Unemployment Rate.

May 11th: United States Michigan Consumer Sentiment. China Inflation Rate.

May 13th: Australia Business Confidence.

May 14th: United Kingdom Unemployment Rate. Germany ZEW Economic Sentiment Index. United States Producer Price Inflation MoM.

May 15th: United States Core Inflation Rate MoM, Core Inflation Rate, Inflation Rate MoM, Inflation Rate YoY and Retail Sales.

May 16th: Japan GDP Growth Rate.

Source: Economic Calendar

Market reflections

Overview

The RBA held Australia's cash rate at 4.35% amid inflation concerns and shifting trade dynamics. Domestic housing remains robust with increased dwelling approvals. Globally, the U.S. sees job market cooling and service sector contraction, while Germany reports strong export-driven growth. Japan faces declining consumer confidence, and Canada's trade deficit contrasts with strong business confidence, reflecting a complex global economic landscape.

Australia

• RBA holds cash rate steady at 4.35%, amid continuing inflation concerns.
• Trade dynamics experience a decline in surplus, alongside shifts in exports and imports.
• The housing market shows consistent expansion in dwelling approvals.
• Services sector growth continues despite broader economic slowdown.
• Employment and inflation trends show signs of stability.

RBA holds interest rates steady, amid inflation challenges.

The Reserve Bank of Australia (RBA) has maintained the cash rate at 4.35% during its May meeting, consistent with expectations. This decision marks the fourth consecutive rate hold since the last increase in November 2023.

The central bank continues to face challenges in returning inflation within the target range of 2-3%, citing a slower than anticipated reduction in cost pressures, particularly from the service sector. The RBA stated that it remains committed to vigilantly monitoring economic indicators including global economic conditions, domestic demand, and labour market trends to maintain price stability.

Trade dynamics: a dip in surplus and a shift in exports and imports.

Australia recorded a trade surplus in March, down from the previous month and below expectations, marking the smallest surplus since November 2020. Despite a slight increase in exports, driven mainly by other mineral fuels and a notable recovery in exports to China, imports surged by 4.2%, a record due to higher consumption, capital, and intermediate goods.

Housing market: steady growth in dwelling approvals.

The housing sector witnessed a 1.9% month-on-month increase in total dwelling approvals in March, the strongest in five months, supported by rises in both private sector houses and dwellings. The growth varied regionally with increases in Victoria and Western Australia, while other states experienced declines.

Housing finance: surge in home loans.

The value of new home loans for owner-occupied homes rose significantly by 2.8% month-on-month in March, exceeding market forecasts. Investment lending for homes also saw an increase, indicating robust activity in the housing market despite variations in new home loan uptake across different regions.

Services sector: expansion continues despite slowdown.

The Judo Bank Flash Australia Services PMI Business Activity Index declined slightly, indicating a slower pace of expansion in April.

The services sector, especially real estate, and business services, continued to see growth driven by new business inflows, including a recovery in new export business. However, the composite output index also saw a minor decrease, reflecting a slight deceleration in the private sector’s overall output growth.

Employment and inflation trends: signs of economic stability.

Job advertisements in April showed a 2.8% increase, suggesting positive momentum in the employment sector. The Melbourne Institute’s Monthly Inflation Gauge also showed a modest increase of 0.1%, maintaining stability as the RBA approaches its next monetary policy meeting.

Meanwhile, retail sales experienced a slight downturn in March, declining by 0.4% and indicating a cooling in consumer spending across various sectors.

Global

• U.S. job market shows signs of cooling amidst rising unemployment.
• Services sector in the U.S. contracts, indicating economic tightening.
• Japanese consumer confidence dips, reflecting economic concerns.
• German trade surplus expands, driven by robust export growth.
• Canada's trade balance shifts to deficit amid falling exports.
• Ivey PMI in Canada signals robust business confidence despite economic headwinds.

U.S. job market shows signs of cooling amidst rising unemployment.

In April, the U.S. job market displayed signs of deceleration, adding 175,000 jobs, which was significantly below the expectations of 243,000 jobs and marked a slowdown from the 315,000 jobs added in March. This represents a noticeable pullback from the robust growth observed in the first quarter, with the healthcare sector contributing significantly by adding 56,000 positions.

Despite the job additions, the unemployment rate slightly increased to 3.9% from 3.8%, as per the latest figures from the U.S. Bureau of Labor Statistics. This uptick in unemployment alongside a stable labour force participation rate at 62.7% suggests a tightening in labour market conditions.

Services sector in the U.S. contracts, indicating economic tightening.

The U.S. Services Purchasing Managers Index (PMI) reported by the Institute for Supply Management fell sharply to 49.4 in April from 51.4 in March, entering contraction territory for the first time since December 2022.

This decline indicates that higher borrowing costs are starting to impact the services sector, mirroring a similar downturn in manufacturing. With new orders and output both slowing, the sector saw a third consecutive period of job reductions, highlighting increasing economic challenges driven by monetary policy and persistent inflationary pressures.

Japanese consumer confidence dips, reflecting economic concerns.

Japan's consumer confidence weakened in April, with the index dropping to 38.3 from 39.5 in March, signalling growing economic concerns among households. The decline was noted across all components, including income growth, employment confidence, and willingness to buy durable goods, marking the lowest confidence level in three months.

This broad-based decline underscores the fragile state of consumer sentiment in Japan, reflecting apprehensions about the future economic landscape.

German trade surplus expands, driven by robust export growth.

Germany's trade surplus increased in March, supported by a strong growth in exports which rose by 0.9%. Increases in exports were seen to the US and China, while there were significant drops in trade with Russia and the UK, indicating shifting global trade dynamics.

The unexpected rise in imports, particularly from China and the US, further highlights Germany's strong intra-regional and international trade activities.

Canada's trade balance shifts to deficit amid falling exports.

Canada recorded a trade deficit in March, a significant shift from the surplus reported in February. This marked the largest deficit since June of the previous year, driven by a sharp 5.3% decline in exports, particularly in metals and energy products. While imports also decreased, the drop was less pronounced, emphasizing a more substantial impact on exports. This downturn reflects weakening trade activities and poses challenges for Canada's economic performance.

Ivey PMI in Canada signals robust business confidence despite economic headwinds.

Canada's Ivey Purchasing Managers Index rose significantly to 63 in April, from 57.5 in March, indicating strong business confidence and marking the highest level in two years. Despite some declines in inventories and supplier deliveries, the overall business activity remains robust, with notable improvements in employment and price indices, suggesting a resilient economic stance amidst broader challenges.

Crypto news

SEC delays decision on Invesco Galaxy Ethereum ETF.

The United States Securities and Exchange Commission (SEC) has extended the deadline for its decision regarding Invesco Galaxy's application for a spot Ethereum exchange-traded fund (ETF).

In a filing on May 6th, the SEC granted itself an additional 60 days, pushing the decision deadline to July 5th. The SEC stated that the extension was necessary to thoroughly evaluate the proposed rule change and the associated concerns.

In recent months, the SEC has postponed decisions on applications from all eight potential issuers of Ethereum exchange-traded funds (ETFs). This includes prominent names such as BlackRock, Fidelity, Franklin Templeton, Hashdex, and Ark 21Shares.

The final deadline for VanEck's Ethereum ETF application is May 23rd, but Bloomberg analysts are sceptical about SEC approval, with odds downgraded from 50% to 35%. They cite prolonged SEC silence and political pressure. Despite this, Ethereum advocate Anthony Sassano remains hopeful, pointing to past approvals and recent industry meetings as reasons for potential approval.

Trade ETH/AUD on BTC Markets.

Zeus Network's SOL-to-BTC cross-chain bridge set to launch in Q3 2024.

Zeus Network is set to launch its Zeus Program Library (ZPL) by Q3 2024, bridging Solana and Bitcoin ecosystems. ZPL-Assets unlock various opportunities on Solana, facilitating DeFi, GameFi, SocialFi, DePIN and more. Powered by Solana Virtual Machine (SVM) programs, ZPL enables developers to integrate native Solana support into decentralised applications and enable transactions across multiple blockchains.

Through ZPL and the Apollo bridging protocol, users can deposit Bitcoin and receive ZPL-wrapped zBTC tokens, enabling engagement with decentralised exchanges, NFT marketplaces, borrowing, lending, gaming, and SocialFi within the Solana ecosystem.

Future plans include expanding ZPL-supported assets on Solana to Bitcoin Runes and Ordinals ("zRuneX" and "zOrdX") and enabling Bitcoin staking on the Apollo mainnet in Q3.

Zeus Network, backed by Solana co-founder Anatoly Yakovenko and Stacks co-founder Muneeb Ali, recently secured an US$8 million funding round, valuing the protocol at US$100 million.

Buy SOL/AUD on BTC Markets.

SUI partners with tech giants for web3 innovation.

Mysten Labs, the creator of Layer 1 Sui protocol, is optimistic about the future of blockchain technology after a productive year that included mainnet launch and partnerships with tech giants like ByteDance and Google. CEO Evan Cheng believes that the "killer app" for web3 is imminent, paralleling the rise of ChatGPT.

Recently, Mysten Labs has established ecosystem partnerships with Alibaba Cloud and Google Cloud, focusing on enhancing security and scalability. Additionally, partnerships with BytePlus, the tech division of TikTok parent ByteDance, aim to explore web3 gaming, SocialFi, recommendation solutions, and augmented reality products. Cheng suggests that established tech firms are embracing blockchain for perpetual innovation, recognising its potential beyond immediate threats to their business models.

In the past year, Sui has shown progress by briefly entering the top 10 for Total Value Locked (TVL) shortly after its mainnet launch, as reported by Mysten Labs. However, it has since dropped to thirteenth place on the list, trailing behind protocols like Ethereum, Solana, and Avalanche, according to data from DeFiLlama.

Trade SUI/AUD on BTC Markets.

Regulation roundup

US Lawmakers press SEC on Bitcoin Options trading approval.

US lawmakers are pushing the Securities and Exchange Commission (SEC) to greenlight options trading on Bitcoin exchange-traded products (ETPs). Representatives Mike Flood and Wiley Nickel penned a letter to SEC Chair Gary Gensler, urging the commission to end bias against crypto funds.

They demand approval for options on spot Bitcoin ETPs or an explanation for the discrepancy in treatment compared to options for Bitcoin futures ETFs, which are currently trading.

Options are financial contracts allowing the holder to buy or sell an asset, such as Bitcoin, at a predetermined price by a specified date. They're commonly used for hedging against price fluctuations, minimising potential losses, and enabling investors to create extra income through various strategies.

The SEC has delayed decisions on applications from major exchanges like the New York Stock Exchange (NYSE), Nasdaq, and Cboe Global Markets since January. Nasdaq seeks to list and trade options on BlackRock's iShares Bitcoin Trust, while Cboe plans to offer options trading on various Bitcoin funds. Similarly, the NYSE aims to trade options on Bitwise Bitcoin ETF, Grayscale Bitcoin Trusts, and other trusts holding Bitcoin.

The SEC has launched a new consultation round regarding a proposed rule change to allow options trading on Bitcoin funds. In an April 24 filing, the SEC aims to assess the potential impact of Bitcoin options on market stability, especially during periods of volatility. The agency is also evaluating the adequacy of existing market surveillance and enforcement measures in handling the complexities associated with Bitcoin options. Participants can submit initial comments by May 15 and rebuttal comments by May 29.

Compliance conversations

Mother's Day shopping scams on the rise.

Minister for Consumer Affairs, Gabrielle Williams has advised consumers to stay vigilant for scams, especially when shopping online for Mother's Day gifts in the weeks preceding May 12th.

Data from the Commonwealth Government's National Anti-Scam Centre indicates that May was the second-highest month for scams in 2023, with over 25,000 complaints nationally and AU$53.2 million reported lost to scammers, slightly behind January's AU$53.3 million in reported losses.

Online shopping scams and fake websites are particularly concerning for Mother's Day, as victims often pay for goods that never arrive. Scammers posing as sellers create fake advertisements for non-existent products, which they post on legitimate websites, online classifieds, and auction sites. Additionally, scammers hijack reputable sellers' profiles to deceive consumers. They typically request payment via money wiring services or fake payment platforms.

Some scams involve scammers posing as buyers who trick sellers into sending goods without payment. These scammers often claim to have overpaid and request the excess funds be returned, using fake emails from seemingly legitimate payment services to confirm the transaction.

Consumers can access guidance on avoiding scams and handling scam-related issues via the Consumer Affairs Victoria website at consumer.vic.gov.au.

Gabrielle warns that the period leading up to Mother's Day is a prime time for shopping scams. She advises consumers to exercise caution against scammers who employ fake advertisements and payment methods to defraud both buyers and sellers.

To prevent falling victim to scams when shopping for Mother's Day, consumers are urged to be sceptical of sellers offering goods and popular brands at unusually low prices and to opt for secure payment methods like PayPal or credit cards.

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 06/05/2024.