Bitcoin rose in Tuesday morning trading in Asia to hold above support at US$26,000. Ether also logged gains along with most other top 10 non-stablecoin cryptocurrencies. Binance’s BNB token was little changed to lower on signs the world’s largest crypto exchange may be winding down its expansion in Europe amid widespread regulatory woes. Equity futures in the U.S. edged lower after the long weekend break, recent mixed signals on the state of inflation, and speculation about more interest rate hikes by the Federal Reserve.
Crypto
Bitcoin rose 1.41% over the last 24 hours to US$26,765 at 07:00 a.m. in Hong Kong, moving up 3.21% for the past seven days, according to data from CoinMarketCap. The world’s largest cryptocurrency reached a weekly high of US$26,984 early Tuesday to test resistance at US$27,000.
Ether gained 0.86% to US$1,734, but has flatlined over the past seven days to log a weekly loss of 0.48%. Solana led the winners in the top 10, rising 3.76% to US$15.95 and up 4.95% for the week.
Most other top 10 non-stablecoin tokens moved higher in early morning trade. However, Binance’s BNB posted a dip of 0.25% to US$242.87, though the token is still holding onto a weekly gain of 5.38%. The Binance exchange seems to be reining in its global expansion plans amid growing regulation challenges.
Binance Markets Ltd, the U.K. subsidiary of Binance, can no longer “provide regulated activities and products” for non crypto-related activities in the country, according to a Monday posting on the website of the country’s Financial Conduct Authority (FCA). According to reports, Binance had permission to provide such services in the U.K. but had requested to the FCA it be withdrawn as they were unlikely to be used.
Apart from the ongoing lawsuit with U.S. regulators, Binance is also facing challenges in Europe. The company on Friday said it will withdraw from the Netherlands after being unable to secure a virtual asset service provider registration in the country. The crypto exchange is also reportedly under an anti-money laundering probe in France.
Digital asset investment products saw an outflow of US$5.1 million last week, according to data tracked by Europe-based cryptocurrency investment firm CoinShares on Monday. The data marks the ninth consecutive week of outflows, while the number is smaller than US$88 million in the previous week after the world’s biggest asset manager BlackRock filed for a spot Bitcoin ETF.
“(BlackRock’s) move also conveys a compelling message to the SEC, implying a firm stand on the importance and role of cryptocurrencies in future financial innovation in the U.S,” Rachel Lin, the co-founder and chief executive officer of crypto derivatives exchange SynFutures, said in an emailed comment.
BlackRock’s Bitcoin ETF efforts could be a sign of a major crypto trader migration, according to Markus Thielen, Head of Crypto Research & Strategy at digital asset service platform Matrixport.
“There are now 420 million cryptocurrency holders; migrating them to regulated entities might be the most significant task in 2023 mainly because fighting those crypto companies with deep pockets is also very time-consuming for regulators,” said Thielen in an emailed comment. “Ripple Labs has spent $200m on its lawsuit with the SEC, while Coinbase, especially Binance, could spend billions. So why not approve the Blackrock ETF and let nature play is part?”
CoinShares indicated the slump in prices of many tokens had brought in some bargain-hunting. “The prior week crash in altcoin prices prompted investors to add to positions (in altcoin-linked investment products),” wrote CoinShares in its Monday report, “with XRP, Cardano and Polygon being the focus.”
The total cryptocurrency market cap rose 0.86% to US$1.07 trillion in the last 24 hours, while crypto trading volume rose 35.69% to US$26.74 billion, according to CoinMarketCap data.
NFT transactions rise
In the non-fungible token (NFT) market, the Forkast 500 NFT index dipped 0.17% to 2,868.69 in the 24 hours to 09:20 a.m. in Hong Kong. The index is down 3.36% for the seven days.
NFT transactions on Ethereum rose 6.74% in the past 24 hours to US$13.16 million, according to CryptoSlam data. Transactions on the Bitcoin blockchain surged 135.38% to US$3.43 million, while the Polygon and Cardano networks also logged two-digit gains in NFT transactions.
“Forkast 500 NFT Index along with Ethereum, Solana, Polygon, and Cardano are all close to even, which may be a sign that the market has finished reacting to the SEC’s lawsuits against Binance and Coinbase,” said Yehudah Petscher, NFT Strategist at Forkast Labs, the parent company of Forkast.News.
“Sneakerhunt”, a teased collaboration between Nike’s NFT platform .SWOOSH and online video game Fortnite is set to be unveiled on Tuesday, which might bring more public exposure to NFTs.
“This may be a huge week for NFTs after Nike’s tease about an incoming in-game sneaker event in Fortnite,” said Petscher. “Many speculate that it’s Nike’s .SWOOSH shoes that may be the prize at the end of the hunt, titled Airphoria. With Fornite’s 242+ million strong userbase, this could end up being another mass onboarding event for NFTs.”
Elsewhere, CryptoPunk #8611 of the Ethereum-based CryptoPunk NFT collection was sold for around US$95,000 on Saturday and immediately burned and “revived” as an Ordinal inscription on the Bitcoin network, with the process directed by NFT enthusiast NatanStein.
“(The action) may be a vote of confidence in the value of assets existing on Bitcoin, but this asset now loses any potential benefits it would have received from Yuga Labs if they were to incorporate it in their Otherside Universe,” said Petscher. “Yuga Labs famously had thousands of $APE Coin claimable for each BAYC NFT, along with land in their Otherside game, and some have speculated that CryptoPunks may one day see their own rewards.”
U.S. futures lower
U.S. stock futures traded lower as of 11.00 a.m. in Hong Kong. Dow Jones Industrial Average futures fell 0.37%, while the S&P 500 and Nasdaq futures both lost 0.22%.
All the three major U.S. stock indexes logged gains last week as the Federal Reserve left interest rates unchanged at the June 14 meeting, but this was tempered by Fed Chair Jerome Powell, noting “nearly all Committee participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year.”
The Fed projects the interest rate to reach 5.6% in 2023, indicating two more rate hikes within the year. New York Fed President John Williams will be speaking on Tuesday in the U.S. and may make further comments on the Fed’s fight with inflation.
On the economic data front, the U.S. housing market index, a measurement of homebuilder sentiment, reached an 11-month high of 55 in June to beat analysts’ expectations, according to Bloomberg on Monday. Readings above 50 indicate more housebuilders see the market condition good than bad.
U.S. interest rates are now between 5% and 5.25%, the highest since 2006, and the Federal Reserve’s next meeting on rates is July 26. The CME FedWatch Tool predicts a 25.6% chance the Fed will keep rates unchanged in July, and a 74.4% chance for another 25-basis-point rate hike, up from 71.9% on Monday.
China’s central bank lowered its one-year and five-year loan prime rates to 3.55% and 4.2% on Tuesday as economists expected, as the country seeks to boost its slow post-Covid recovery, according to the Financial Times on Tuesday.
(Updates with equities section.)