Biweekly Headlines 2023.8 W1-2

“When you own an altcoin, it owns you.

When you own Bitcoin, it serves you.”  – Jimmy Song

Biweekly News Roundup

After beginning the year with a sharp price increase, nearly doubling its value, BTC has mostly oscillated within a narrow band for the past few months, finding it challenging to consistently stay above $30,000. However, Bitcoin’s “taker buy-sell ratio” has soared to its highest point in at least a year, indicating heightened purchases by major investors and suggesting renewed bullish momentum. Since the onset of 2023, the 30-day average network hashrate has leapt by 49% from 249 EH to 370 EH, significantly eclipsing the 22% rise seen in H1 2022. The number of addresses with a non-zero bitcoin balance has increased to a new record high of 47.9 million. Per Glassnode, it’s a sign of continued bitcoin adoption. Bitcoin’s price saw a 3% uptick, surging past $30,000 on August 8in response to a plunge in global long-dated government bond yields. The fall in yields was triggered by China’s far weaker than anticipated trade numbers for July. The U.S. 10-year Treasury yield tumbled below the 4% mark. Yields on long-dated government bonds across Europe are posting even steeper declines on Tuesday, including in Germany, where the 10-year Bund yield is down 15.4 basis points. As the global economy continues to absorb geopolitical tensions, the U.S. dollar’s global dominance could wane with a steady decline in the dollar’s share of central bank reserves and increasing de-dollarization efforts among BRICS nations (Brazil, Russia, India, China and South Africa) and other emerging markets. The current global economic landscape is marked by an increased tendency among nations to diversify their reserves away from the U.S. dollar, exacerbated by the Fed’s rate hikes to tackle domestic inflation. The move higher in Treasury yields and the dollar in the wake of the Fitch downgrade and the U.S. Fitch’s downgrade of U.S. debt this week is a warning to American policymakers.

Bloomberg analysts now see a 65% chance a U.S. spot bitcoin ETF will launch this year, up from 50% previously. The SEC is likely to approve several spot bitcoin ETF in quick succession, triggering the next move higher for the world’s largest digital currency, Matrixport said in a report on August 10. Cathie Wood and Mike Novogratz have expressed optimism regarding the approval of a spot bitcoin ETF. The SEC has also been recently inundated with applications for Ether futures ETFs, with a grand total of 11 Ether-based filings being submitted in less than a week. On August 9, the SEC is moving to appeal a July court decision from its lawsuit against XRP is not a security. Gemini announced it had made XRP available again for trading on the crypto exchange on Aug. 10. The SEC will respond to Grayscale’s GBTC lawsuit filing and ARK 21Shares bitcoin ETF refiling next week and is expected to respond to seven other bitcoin ETF filings during the first week of September. Binance could face U.S. Department of Justice fraud charges, though prosecutors are weighing alternatives given the risk of an FTX-style bank run.

Russian President Putin signed the Digital Ruble Act on July 24 and it came into effect on August 1. The new law officially authorizes the Central Bank of Russia to launch the first CBDC pilot to consumers in August. MicroStrategy filed on August 1 to sell $750M in stock with the capital targeted to purchase more Bitcoin. MicroStrategy now owns around $4.5B worth of bitcoin and is planning to buy more in the third quarter of this year. Daily active users on Coinbase’s layer 2 blockchain Base hit 136,000, just the day following the official launch of the network on August 9. The base now ranks 4th in daily transactions per second among layer 2 solutions, behind zkSync Era, Arbitrum and Optimism. Visa said on August 10 that it has completed testing a new way to allow users to pay gas fees in fiat currency with their credit cards. PayPal is entering the cryptocurrency market with its own U.S. dollar-pegged stablecoin based on Ethereum, PayPal USD (PYUSD), the company announced on August 7. The move marks a significant milestone as it’s the first time a major financial institution is issuing its own stablecoin. Bernstein stated in a research report on August 9 that the stablecoin market is projected to expand from its current $125B to $2.8T over the next five years.

August 12, 2023

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