BullionFX Market Report – July 08, 2023

This week gold has struggled to hold ground above $1,910 while failing to break its lower support of $1,890, remaining within its narrow trading band mentioned last week. 

Gold Markets continue to be negatively impacted by fears around the upcoming US Fed meeting this month. Minutes from their recent meeting in June show that most officials want to raise interest rates and have agreed that further rate rises will be needed but agreed to wait to assess the impact before doing so. Accordingly, Gold markets are fearful of an impending rise which would see demand push capital from gold markets to high interest-bearing cash markets, placing further downward pressure on the price of gold. Markets are also seeing pressure from a recently positive US ADP National Employment report. The US report is one of many with further unemployment figures to be released from the US Bureau of Labor Statistics, providing further uncertainty around the Dow Jones, which has also been struggling over the past few days to break the 34,000barrier decisively. 

Over the coming week, we may see gold markets decline further if we see further fears around hiking rates and growing employment figures; the $1,890 area is worth keeping an eye on as if this breaks, we will likely see further declines towards $1,800. On the flip side, the Dow looks to be topping out around 34,000 – if this fails to break and we see a sharp movement downwards in equity markets or further fears of recession, gold is capable of breaking out of its trading range ($1,890 – $1,925) to the upside and re-test the $2,000 mark. 

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  • Physical gold is a hassle > to receive, store, and sell at market price when you need to 
  • Paper Gold isn’t backed > Today’s paper gold ratio is 124:1* (meaning for every 124kg of paper gold, only 1kg exists) *usdebtclock.org 
  • BullionFX allows users to hold Digital Gold, which is 1:1 physically backed & allow users to trade it at the wholesale market. 
  • Click here for our easy guide to trade gold, or contact OTC@BullionFX.com.  

Bitcoin Price Hits 2023 High as ‘Bullish Event’ The world’s leading cryptocurrency reached above $31,000 this week, up from $16000 in January, pushing its market cap above $600 Million for the first time in more than a year, the approaching “halving” event which will see bitcoin mining reward drop by 50%, could be one factor behind cryptocurrency’s positive price trend.   

Ethereum — the world’s second-most famous blockchain network soars to $2000 again this week, and the price has been trending upward, currently up 5.23% from last week. Ethereum is making investors optimistic that a new bull market is on the horizon. Yet, key resistance levels must be taken out for ETH to experience a new long-term bullish trend.  

Optimism, Aptos, and ApeCoin Set for Significant Unlock in July Optimism, Aptos, and ApeCoin are set to unlock a significant number of tokens this month, injecting over a combined $100 million worth of tokens into circulation. According to Token Unlocks, ApeCoin, the governance token of the ApeCoin DAO, will release 15.6 million $APE tokens on July 17th, amounting to 4.23% of its circulating supply, worth $34.3 million. On the other hand, Aptos will release 4.5 million tokens on July 12th, equivalent to 2.17% of its circulating supply, worth $33.9 million, with $24 million going to the community and $10 million to the Aptos Foundation. Lastly, Ethereum Layer 2 Optimism will release 24.2 million OP tokens on July 30th, representing 3.75% of the circulating supply, worth $32.4 million, with $17 million going to core contributors and $15 million to investors.  

Asset management company Valkyrie Digital Assets has also refiled its application for a spot Bitcoin ETF with the US Securities and Exchange Commission (SEC), with Coinbase acting as its crypto exchange partner to enter a surveillance-sharing agreement, which is a prerequisite for the SEC, aiming at preventing fraud and manipulation in the underlying market of an asset. Valkyrie first filed its application in January 2021. It refiled last month, naming Nasdaq as its chosen exchange. Last week, the SEC returned the recent spot Bitcoin ETF applications because they were not “sufficiently clear or comprehensive”. By now, companies like BlackRock and Fidelity have refiled applications.  

Crypto Giant Binance Struggles in Europe  

The Netherlands and Belgium have barred it, Germany hasn’t issued an operating license, and French prosecutors are investigating it. Crypto giant Binance opened a regional headquarters in Paris last year, hoping to expand its business in Europe, and things haven’t gone their way. The Netherlands and Belgium have shut their doors to the exchange. Germany, Europe’s largest economy, still needs to give it a license tooperate. And French prosecutors recently searched the exchange’s office as part of an investigation of money laundering controls. Cryptocurrency traders have rushed out of Binance’s American exchange following a regulatory crackdown, dropping the market share of Binance.US to a little more than 1% last week from a record high of 27% in April, according to data provider Kaiko. The decline started in late April and accelerated after the Securities and Exchange Commission sued Binance, Binance.US and founder Changpeng Zhaoon on June 5th, accusing them of violating US securities laws. 

Nasdaq refiled for the iShares Bitcoin Trust, a spot bitcoin ETF with BlackRock. The move followed similar filings last week from the Cboe exchange. According to the filing, the exchange said it reached an agreement with crypto exchange Coinbase to enter into a surveillance-sharing agreement, expecting a “definitive agreement” to be done ahead of trading.   

Bitcoin ATM operator Bitcoin Depot launched on the Nasdaq stock exchange, making it the first US company of its kind to go public. Bitcoin Depot is listed under the ticker BTM. Based in Atlanta, Georgia, Bitcoin Depot said it is North America’s largest provider of Bitcoin ATMs, with 6,440 kiosk locations. “Bitcoin Depot is well positioned with the largest market share in North America, and the additional capital from this transaction will help support our numerous growth opportunities while advancing our mission to safely [and] securely bring Bitcoin to the masses,” Bitcoin Depot founder and CEO Brandon Mintz said in the official announcement. A Bitcoin or crypto ATM is like a regular ATM but allows users to buy and sell digital assets. Would-be traders can buy and sell coins and tokens quickly via such ATMs without having to deal with setting up an account with an exchange.  

The boom in demand for high-end chips powering the rise of artificial intelligence has given new life to some of the survivors of the last tech-hype cycle: cryptocurrency miners. During the crypto upsurge, Satoshi Spain sold and leased out hundreds of souped-up computers—known as mining rigs—equipped with powerful graphics chips. Then, as many of them sat idle starting last year because of the decline of mining currencies, the Spanish company began helping its customers retool the machines for AI. Today, Satoshi Spain’s machines handle AI workloads for start-ups, universities and individual developers in Europe. “You can still make money from your mining rig,” Satoshi Spain founder Alejandro Ibáñez de Pedro said. “It’s mining 2.0.” Satoshi Spain is one of many reformed—and opportunistic—companies connected to the cryptocurrency business that have turned their attention to the AI boom, for which one of the most crucial assets is access to the graphics chips, known as graphics processing units or GPUs. Initially popularised by gamers who needed powerful graphics processing on computers, the chips are well-suited for the intensive calculations needed to create new cryptocurrency units. They are also suitable for the computational workloads needed to train and run AI systems that generate sophisticated text and images.   

Circle is considering issuing a stablecoin in Japan, given that legislation governing stablecoins took effect on June 1st, the payment services company’s co-founder and CEO Jeremy Allaire said. Japan’s stablecoin bill makes it one of the first countries toestablish a framework for using overseas stablecoins, which Allaire considers “the most important thing the government and the Financial Services Agency have done.” Japan is one of the first major economies to pass a law specific to stablecoins. The bill clarifies the definition of stablecoins, which will now be considered digital money and must be linked to the yen or another legal tender, guaranteeing holders the right to redeem them at face value. Stablecoins can now only be issued by licensed banks, registered money transfer agents and trust companies. The bill does not address existing asset-backed or algorithmic stablecoins. However, exchanges in Japan do not list stablecoins. Major Japanese financial institutions have been exploring stablecoins, with Mitsubishi UFJ Trust and Banking Corporation announcing its plans to issue its stablecoin platform, Progmat.  

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