Weekly News Wrap Up
U.S. inflation slid to a more than 2Y low of 3.0% prompting a rally in risk assets as markets anticipate July’s potential rate-hike as the final one in the cycle – equity markets rose, Treasury yields declined, and the USD sank. In crypto, Ripple (XRP) scored a partial win in its case against the U.S. SEC – a judge ruled that institutional sales of the token violated federal securities law, but sales on public exchanges did not.
Weaker inflation drove U.S. equity markets higher last week: SPX +2.42%, DJIA +2.29% and NASDAQ +3.32%. Cryptocurrency majors BTC +0.26% and ETH +3.16% followed the general market and also benefited from the XRP news, but succumbed to profit-taking pressures late in the week.
On-chain, data from Glassnode shows the impact of the recent wave of spot Bitcoin ETF applications in the U.S. – the supply of Bitcoin (BTC) held by US entities has increased, suggesting a significant change in BTC supply dominance. Previously, Asia had a strong presence in the BTC market with US supply dominance having fallen by 11% since mid-2022 as regulatory actions and uncertainty in the US led some entities to move their operations offshore. However, even with Asia’s receptive approach to the crypto ecosystem, for the foreseeable future, it seems that the trend will reverse course, with Asia’s crypto holdings falling relative to the US.
Cryptocurrency News
- Bank for International Settlements: survey shows that 24 central banks will have digital currencies by 2030. Central banks around the globe have been studying and working on digital versions of their currencies for retail use to avoid leaving digital payments to the private sector amid an accelerating decline of cash. Some are also looking at wholesale versions for transactions between financial institutions.
- Stablecoin issuers urged to anticipate MiCA rules by EU banking agency. Regulators can be notified of stablecoin-related operations now even though the rules don’t take effect until June 2024, the European Banking Authority said.
- Cboe Global Markets partners with Coinbase on surveillance-sharing agreement in spot Bitcoin ETF push. The exchange operator filed amended applications for 3 spot Bitcoin ETFs to add a surveillance-sharing agreement with Coinbase. This follows from Nasdaq’s re-filling on 29 June for BlackRock’s application with a similar arrangement with Coinbase. The U.S. SEC has rejected prior applications in the past on the grounds that the proposals do not meet standards designed to prevent fraudulent and manipulative practices and protect investors and the public interest.
Our View: any progress towards the listing of the first spot Bitcoin ETF in the U.S. is a positive for market sentiment, however there still exists considerable hurdles to an eventual approval from the SEC that has taken a hardline approach towards cryptocurrencies - Silk Road–linked Bitcoin worth $300 million moved by the U.S. Government. On-chain data shows that two wallets tagged as belonging to the U.S. government and linked to the Silk Road seizure of crypto moved 9,825 BTC in 3 separate transactions on 12 June. The same wallet transferred over $1 billion in BTC in March 2023 that caused a slump across all major cryptocurrencies.
Our View: any technical-driven selloff presents an accumulation opportunity, in our view. Fears of an open-market sale by the U.S. government seems overblown as the sale is normally conducted through an auction. A repeat of the price-action in March is likely to be absorbed by the market. - Google Play changes policy on tokenized digital assets, allowing NFTs in apps and games. The company is opening up the ability for developers to let users buy, sell or earn digital assets in apps as long as they maintain transparency and adhere to other rules.
- Coinbase’s domain name reportedly used by scammers in high-profile attacks. Twitter users have been sharing security incidents surrounding the crypto exchange, including claims that scammers are using Coinbase’s domain name for attacks.
Our View: the article highlights how phishing attacks have become more sophisticated, reminding us to be ever more vigilant in protecting your accounts! - Messari: XRPL grows in 2Q despite regulatory headwinds. Despite lingering concerns over the Ripple vs. SEC lawsuit, the XRP Ledger (XRPL) grew significantly in total new address count, reaching 138,790 (+31.8% YoY) in 2Q2023.
- Vanguard’s investments in Bitcoin mining firms Marathon, Riot approach $620M. It owns 17.5 million shares in Marathon and 17.9 million shares of Riot Blockchain, July filings show.
Investment Consideration
Our best strategy for the moment is to take at least 1-3 years in Moderate Portfolio because it has a good defense with 50% Fixed Deposit , 30% In DCD and 20% in Staking. After all, we still have potential returns in DCD and Staking, especially in BTC.
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