Markets Insights
Next FOMC meeting: July 26 2023.
- Probability of a 0bps hike → 5%
- Probability of a 25bps hike → 95%
The News Room
IRS Investigates Puerto Rico Crypto Tax Probe
The Internal Revenue Service (IRS) is conducting an investigation into potential tax evasion related to cryptocurrency activities in Puerto Rico. The investigation is focusing on individuals who have claimed tax benefits associated with moving to Puerto Rico while engaging in significant crypto transactions. This move demonstrates the IRS's determination to ensure compliance within the crypto industry and highlights the importance of accurate reporting and adherence to tax regulations.
https://cointelegraph.com/news/puerto-rico-crypto-tax-probe-irs-investigation
BNB Beacon Chain Hard Fork Introduces Panic Feature
Binance's BNB Beacon Chain has undergone a hard fork that introduces a panic feature capable of halting the blockchain in emergency situations. The panic feature aims to protect the network from potential security vulnerabilities or critical issues by enabling a temporary suspension of block production. This upgrade emphasizes Binance's commitment to maintaining the security and stability of its blockchain infrastructure, and it showcases the importance of proactive measures to address potential risks in the crypto ecosystem.
Lummis and Gillibrand to Introduce Revised Comprehensive Crypto Bill
U.S. Senators Cynthia Lummis and Kirsten Gillibrand are set to introduce a revised version of a comprehensive crypto bill. The legislation seeks to provide regulatory clarity and support innovation within the crypto industry while addressing concerns related to investor protection and national security. The revised bill reflects ongoing efforts to establish a balanced regulatory framework that promotes the growth of cryptocurrencies and blockchain technology in the United States.
https://www.theblock.co/post/239210/lummis-gillibrand-to-introduce-revised-comprehensive-crypto-bill
SEC's Gensler Rejects Industry's Call to Recuse from Crypto Actions
Securities and Exchange Commission (SEC) Chairman Gary Gensler has pushed back against the crypto industry's request for him to recuse himself from regulatory actions related to cryptocurrencies. Gensler maintains that his expertise in the field and commitment to investor protection make him well-suited to address the regulatory challenges posed by digital assets. This stance underscores Gensler's proactive approach to overseeing the crypto space and signals the SEC's commitment to robust and effective regulation of cryptocurrencies and initial coin offerings (ICOs).
TradFi
Stocks experienced an uptick on Thursday following a lower-than-anticipated inflation report, subsequently after the S&P 500 traded at its peak level in more than a year.
The Producer Price Index (PPI) for June, a critical gauge of the costs borne by wholesalers for goods, witnessed a subdued rise of 0.1%, which was lesser than the predicted increase of 0.2%. This news bolstered the already optimistic sentiment stemming from Wednesday's Consumer Price Index data, leading to the less than expected inflation report.
The S&P500 is trading at the highest level in more than a year. The index keeps reaching higher levels as the Dollar Index is falling to the lowest figure since April 2022. As we broke above the 4500 level, our next target is in the 4600 range.
Upcoming:
- THURSDAY: US PPI + unemployment claims
- FRIDAY: US consumer sentiment
Bitcoin
The SEC, DOJ, CFTC, and FTC sues Celsius Network and Alex Mashinsky in a New York federal court. Celsius, the bankrupt crypto lender, collapsed last year amid early crypto distress. This morning, its CEO Alex Mashinsky was arrested and charged with fraud as well as a scheme to manipulate the crypto market.
The regulator alleges that: - “Defendants falsely promised investors a safe investment with high returns through its “Earn Interest Program,” they misled investors about the financial success of Celsius’s business, and they fraudulently manipulated the price of Celsius’s own crypto asset security—the so-called “CEL” token.”
BTCUSDT is stuck in a tight range between 29,900 and 31,250. As much as the stock market gained a lot of inflows following the soft inflation print, the crypto market overall isn’t feeling the same amount of love. We’ve noticed in the past that sometimes there’s a lag between the overall liquidity and the crypto market. It doesn’t help when we keep witnessing negative headlines regularly coming out. As long as the US Dollar Index is coming down, then risk assets should continue to flourish. Not sure what the exact catalyst will be, but eventually, Bitcoin will break above these yearly highs and test the next major resistance area around $33,000.
- BTC > 27,500 → Bullish
- BTC < 27,500 → Neutral
- BTC < 24,850 → Bearish
Ethereum
ETHUSDT is no longer the high Beta play that it used to be. Its volatility has come down quite a bit and is now lower than Bitcoin’s volatility. Looking at its market share vs. altcoins on centralized exchanges, we can see that the volume relative to altcoins has dropped to its lowest level since March 2022. Clearly, market participants prefer the risk-adjusted return of altcoins compared to Ethereum.
Looking at price action, once again, nothing significant to report here. Prices continue to range between 1825 and 1935. A breakdown of 1825 would confirm the breakdown of a Head-and-Shoulders pattern while a breakout of 1935 would trigger bullish implications sending the coin higher towards 1995.
- ETH > 1910 → Bullish
- ETH < 1910 → Neutral
- ETH < 1630 → Bearish
Altcoin Watch - Cosmos (ATOM)
Kava, a Layer-1 blockchain that combines the developer power of Ethereum with the speed and interoperability of Cosmos has launched the Kava 14 upgrade. This upgrade deploys 'internal bridge' technology to seamlessly convert native Cosmos assets to and from Ethereum’s ERC20 token standard.
“Within the first few days of Kava launching the official Tether integration, more USDt has been issued on Cosmos than on Polkadot and Near combined,” said Scott Stuart, Kava Co-Founder. “It’s clear that people want USDt on the interchain. I’m optimistic that having a native stablecoin and a safe, reliable way to convert it across chains via the Kava 14 upgrade will finally unlock the incredible tech the Cosmos ecosystem has built.”
ATOM/USDT - On the daily chart, price is in an established downtrend. Since our last visit, the resistance levels that we were watching have provided strong reactions. Price is now likely to seek lower levels to mitigate the wick created 10th June, which would mean revisiting lows from June of the previous year.
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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.
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