BullionFX Market Report – August 5, 2023

Spot Gold, currently trading at $1,936, held near three-week lows. Gold Price remains on the back foot despite recent consolidation. In doing so, the precious metal prints a three-day losing streak amid a firmer US Dollar and risk-off mood. US private payrolls data suggested the economy could avoid a recession, fuelling bets of more monetary policy tightening and, in turn, boosting the dollar and Treasury yields.

Markets quietly started the week as participants refrained from taking large positions ahead of the Federal Reserve policy announcements. As the S&P Global PMI surveys showed that the US economy remained in a better shape than the Eurozone and the UK economy in June, the USD captured capital outflows out of the Euro and Pound Sterling. In turn, XAU/USD stayed under modest bearish pressure.

The gold price rally beyond $1,955 could open doors for the bull’s visit to the 100-DMA resistance of around $1,970.

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The price of Bitcoin, $29,100, has shed almost 1% since last week, falling to just above $29,000 and moving further from the range between the psychologically important $30,000 level and $31,000 that has provided the largest crypto with the support for the months. Bitcoin has managed to avoid accelerating the sell-off, but it’s only a matter of time before it does. Bitcoin rose on Wednesday after Fitch downgraded US debt-briefly topping $ 30,000 as crypto bulls pointed at principles of deteriorating confidence in the finance system and decentralised alternatives but have since fallen back.

Ethereum is trading at $1,830, the lowest level since June 28th, 2023, when it traded at $1,831. The world’s second-largest cryptocurrency by market cap is still up 12% from 52 weeks ago when it traded at $1,641. US Ethereum futures ETFs have suddenly taken centre stage. At least five applications from different firms were filed within 24 hours on August 1st, and another was submitted last week. An ETF tracking Ethereum futures would invest in futures contracts of the industry’s second-largest cryptocurrency traded on the CFTC-regulated Chicago Mercantile Exchange (CME) rather than directly holding the underlying asset.

MicroStrategy’s financial report of Q2 2023, which was released this Tuesday, shows that as of July 31st, 2023, the company held 152,800 Bitcoin acquired for a total cost of $4.53 billion, $29,672 per Bitcoin. MicroStrategy bought 12,333 Bitcoin for $347 million in Q2 and another 467 Bitcoin for $14.4 million in July. In Q2, MicroStrategy had an impairment loss of $24.1 million on its Bitcoin holdings. Meanwhile, according to the filings MicroStrategy submitted to the US Securities and Exchange Commission (SEC), the company plans to sell up to $750 million of stock and use part of the net proceeds to buy more Bitcoin. 

Binance Japan, a subsidiary of Binance, announced the launch of a local dedicated crypto exchange to start onboarding new customers in Japan. Existing customers who have global Binance accounts will be able to initiate the migration process after August 14th. Binance Japan will offer spot trading, Earn products, and an NFT marketplace for local users. At launch, 34 cryptocurrencies are available on Binance Japan, including $BTC, $ETH and $BNB. This is the first time that $BNB is available in Japan. The exchange said it would also provide derivatives services in a locally compliant manner in the future. 

Tether Holdings published its Q2 attestation from accounting firm BDO, highlighting an $850 million increase in its excess reserves, which takes its total to $3.3 billion. Tether tipped its operational profits at $1 billion from April to June 2023, accounting for a 30% increase from Q1 2023. The 2023 Q2 report notes that 85% of Tether’s reserves are held in “liquid” cash or cash equivalents investments. Tether’s latest reserve attestation estimates its total assets at $86.4 billion. Tether’s outstanding liabilities in relation to circulating USDT tokens are estimated at $83.17 billion. 

Curve Finance stated that the attack targeted several stablecoin pools (alETH/msETH/pETH) that use Vyper 0.2.15 due to the malfunctioning re-entrance lock. The Curve Finance stablecoin pool attack has resulted in a cumulative loss of 52 million USD for Alchemix, JPEG’d, MetronomeDAO, deBridge, Ellipsis, and the CRV/ETH pool. 

HashKey Exchange Becomes First Licensed Crypto Exchange in Hong Kong to Offer Retail Services

Asia’s digital asset group HashKey Group announced that its regulated crypto exchange HashKey Exchange has been approved by the Hong Kong Securities and Futures Commission (SFC) to upgrade its Type 1 and Type 7 licenses, becoming the first exchange to offer retail services in Hong Kong.

ETF issuer and TradFi giant Direxion applied for a Bitcoin and Ethereum futures ETF with the US Securities and Exchange Commission on Wednesday. Named Direxion Bitcoin Ether Strategy ETF, Direxion’s products will invest in Bitcoin and Ethereum futures contracts and may also invest in other ETFs with exposure to futures products.

The US Department of Justice is considering fraud charges against Binance but worries that the move could cause a run on the exchange and spur a panic in the crypto markets, Semafor reports. According to people familiar with the matter, the DOJ is also considering other options, such as fines and deferred or non-prosecution agreements. The $BNB price dropped immediately after the report was published. The price of $BNB dropped 3.04% over the last 48 hours.

FTX laid out its first vision of the crypto company’s future after bankruptcy, saying it could hand over stakes in a rebooted exchange to customers who are owed more than $9 billion in deposits the company can’t locate. According to a bankruptcy reorganisation plan filed Monday, the management team guiding FTX through bankruptcy will try to reboot its international exchange, FTX.com. The company also said it may try to bridge any shortfall of funds owed to those customers by offering them “equity securities, tokens or other interests” in the restarted platform.

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