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Taiwan Develops CBDC Prototype Platform, Plans Public Hearings for Next Year
Taiwan's central bank has developed a prototype platform for a potential central bank digital currency (CBDC) and plans to hold multiple hearings and forums next year. The bank began researching CBDCs in 2019 and has completed two stages of testing. The prototype includes a two-tier issuance structure, with non-interest-bearing CBDC wallets available in anonymous and registered types. The platform can process 20,000 transactions per second, and the bank is also exploring wholesale CBDC use for asset tokenization. Taiwan's central bank governor, Chin-Long Yang, emphasized a cautious approach to CBDC issuance and will present a progress report to parliament. Cryptocurrency and stablecoins are excluded from the CBDC research, and Taiwan's crypto industry remains largely unregulated, although new AML compliance measures are being proposed.
Germany Transfers Additional $28 Million in Bitcoin to Major Exchanges
The German government transferred 250 BTC each to Coinbase and Bitstamp and another 500 BTC to an unidentified address, totaling over $28 million. This move is part of a recent trend of the German government offloading its Bitcoin holdings, which amount to 38,826 BTC seized from criminal cases, valued at over $2.23 billion. These sales have contributed to Bitcoin's price fluctuations, causing it to drop below $55,000 before recovering to around $57,590. Criticism has emerged over the government's lack of strategy for handling Bitcoin, while figures like Tron founder Justin Sun have offered to purchase the remaining holdings to minimize market impact.
Japan's Metaplanet Acquires More Bitcoin Amid Economic Slowdown
Publicly traded Metaplanet Inc. has acquired an additional 42 Bitcoin, valued at $2.4 million, amid Japan's ongoing economic struggles. This purchase brings the company's total Bitcoin holdings to 203 BTC. Last month, Metaplanet established a subsidiary, Metaplanet Capital Limited, to enhance its Bitcoin accumulation strategy. Japan's economic challenges include a declining yen, prolonged stagnation, and a shrinking workforce. Despite its relatively small size, Metaplanet's move mirrors the strategies of larger companies like MicroStrategy, which holds 226,331 BTC. Metaplanet's stock price increased by 1.2% following the announcement.
Trading Desk Insights
Bitcoin is attempting a recovery from its recent lows after a tumultuous week. The critical support level of $53,000, which has been the subject of much discussion across online forums and dinner tables alike, has finally been tested. The RSI indicator has signaled its first oversold condition since August, just before the upward squeeze. For Bitcoin to gain further momentum, prices need to surpass $58,500, with a breakthrough above $60,500 marking a return to bullish territory.
The recent shake-up in the crypto market has been influenced by Germany's bitcoin sales and Mt. Gox's reimbursements. Germany, the eurozone's largest economy, still holds 39,826 BTC valued at $2.2 billion, according to Arkham Intelligence. This significant holding represents a potential source of selling pressure, accounting for nearly 9% of Bitcoin's 24-hour trading volume of $25.3 billion, suggesting continued price volatility.
In the US, Bitcoin ETFs saw robust inflows of $143.1 million, the highest in over two weeks, with Fidelity leading the way once again.
Meanwhile, the Grayscale Ethereum Trust (ETHE) has seen the discount to its net asset value (NAV) vanish for the first time in over two years, signaling increased investor confidence and demand for ETH-related investments. Although issuers are awaiting the effectiveness of their S-1 registration statements before trading can commence, the elimination of the NAV discount indicates a strong expectation of SEC approval for Ethereum ETF trading, potentially around mid-July.
Equity futures hit a new record high on Monday as investors anticipate key inflation data, which could provide further insight into the sustainability of this year’s market rally. The market has experienced its fourth positive week out of the last five, driven by optimism that easing inflation might prompt a Federal Reserve interest rate cut. The June consumer price index, set to be released on Thursday, could reinforce these hopes if it shows a slight improvement. Additionally, producer price index data will be released on Friday.
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Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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