BullionFX Market Report – June 23, 2023

Gold has continued to trade along its support this week, ranging between $1,930 and $1,950. During the week we saw the USD rally due to the Fed leaving interest rates on hold, placing downward pressure on Gold markets. Risk remains to the downside with strong support around current levels, where if held could see gold re-test its recent $1,984 high.  

Generally in high interest rate environments retail investors prefer cash to gold as high interest rates are able to be earned, leading to lower market price for gold. When high inflation exists the value of currency falls and as such gold market price is positively affected (as it trades over USD). Gold markets this week are seemingly stagnant in the face of interest rate uncertainty. It remains likely that we will see Gold stay within the above range as long as the US Fed’s interest rate path remains uncertain.   

Last week the US Fed paused rates as a response to softening inflation figures, re-iterating a desired 2% target without inflicting excessive strain on the economy. The Fed seems clearly focused on inflation, with markets eagerly awaiting June results. If we see inflation continue to decline it is likely we see the Fed easing further which would have positive impacts on gold markets.   

While the week ahead is likely to bring further uncertainty, it’s worth keeping an eye on the market in case gold is to break its lower or upper resistance ($1,930’s/$1,980’s) prior to assessing any potential long or short positions. 

Bitcoin reaches 50% market dominance for first time in 2 years. This means that Bitcoin alone accounts for half of crypto’s total $1.1 trillion dollar market capitalization. Bitcoin’s current market capitalization stands at $519 billion, according to data from Coingecko. 

Notably, Bitcoin’s market dominance has surged by more than 10.5% since Nov. 27, 2022, an increase driven in large part by investors looking to the flagship crypto asset as a safe haven following US regulatory scrutiny of crypto assets and in the wake of the FTX scandal. 

Bitcoin surged over 5% in Wednesday morning trading in Asia to breach the US$28,000 resistance level, leading a rally of the top 10 non-stablecoin cryptocurrencies except XRP. Bitcoin’s jump followed the Tuesday evening launch of EDX Markets, a cryptocurrency exchange backed by major Wall Street players such as Citadel Securities, Fidelity and Charles Schwab. 

Ether also gained 2.94% to US$1,788 and added 3% for the week. Most top 10 non-stablecoin tokens traded higher in the past 24 hours as Bitcoin spearheaded the rally. NFT transactions on Ethereum dipped 0.81% in the past 24 hours to US$13.84 million, according to CryptoSlam data. Transactions on the Bitcoin, Solana and Polygon blockchains also logged gains for the past 24 hours. 

Azuki topped the 24-hour transactions on the Ethereum blockchain, which rose 3.33% to 1.21 million, while Bored Ape Yacht Clubs (BAYC) transactions gained 37.05% to US$1.15 million. 

UK Crypto, Stablecoin Laws Approved by Parliament’s Upper House – U.K. parliamentarians have voted through a new bill that could recognize crypto as a regulated activity in the country. The approval of the Financial Services and Markets Bill (FSMB) on Monday by Parliament’s upper chamber, the House of Lords, means the bill is going to enter the final stages before it is put into law. The U.K. wants the FSMB to give regulators the powers that they need to be able to set crypto rules that the Treasury, the government’s finance arm, has been consulting on. 

Hong Kong govt pressures banking giants to accept crypto clients – The Hong Kong Monetary Authority (HKMA), which serves as the region’s central bank and regulator, has reportedly put pressure on major banks including HSBC and Standard Chartered to accept crypto exchanges as clients. 

Binance.US Reaches Agreement With SEC to Avoid Full Asset Freeze – The accord will let crypto platform access funds for operations. The SEC had sought a freeze to protect funds while its suit proceeds 

Binance leaving the Netherlands market – Global cryptocurrency exchange Binance has terminated its services in the Netherlands, exiting the Dutch market after a failed bid to obtain a virtual asset service provider (VASP) license. 

BlackRock files for Bitcoin ETF – BlackRock, which manages $9.5 trillion in assets, rocked the crypto world yesterday when it applied to the U.S. Securities and Exchange Commission for a Bitcoin exchange-traded fund (ETF). Many investment firms have applied for a Bitcoin ETF since 2013, only to face rejection from Wall Street’s top regulator—which cites concerns about market manipulation as reasons for not allowing such a product to exist in the States. The application says that Bank of New York Mellon would be the custodian for the Trust’s cash holdings—another reputable financial institution. It plans to work with Coinbase as the custodian for bitcoin. 

EDX Markets, a New Jersey-based crypto exchange, officially launched on Tuesday. Its investors include Fidelity Investment, an asset manager overseeing more than US$4 trillion in assets, and will offer Bitcoin, Bitcoin Cash, Ethereum and Litecoin trading services. 

30,000 ‘Ethscriptions’ land on Ethereum – Ethereum users have been given another way to create nonfungible tokens (NFTs) and other digital assets on the blockchain with the launch of a new protocol. In less than six months, the total number of Ordinals inscribed on Bitcoin surged from zero to 10 million. The enormous surge in activity was driven in large part by users embracing the novelty of being able to mint assets, which later included entirely new tokens — by way of the BRC-20 token standard. 

Bit2Me, based in Spain, successfully secured $15 million, bucking the trend of crypto exchanges falling prey to American regulators – Bit2Me, a Spanish crypto exchange, pulled in the most capital this week — $15 million — in a bid to grow its home business as well as expand into Latin America, an area of the world venture capital firms are beginning to see as a crypto hotbed. 

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