BullionFX Market Report – June 9, 2023

Over the weekend gold recovered towards the $2,000 barrier hitting a high of $1,984 and moving back towards its support around $1,950. Gold has now completed the retest of its long term trend line and should be poised for higher gains. If gold can break through its $1,984 high and $2,000 psychological barrier we could see the market adjust to new highs. 

Next week on June 14th the US fed will decide whether of not to raise interest further, if rates go up further the market may see further downward pressure on gold price. If the US Fed does raise rates it will be the 11th time this year, with many experts claiming there may be one further rise on the way. As we move into a market where rates remain unchanged or are reduced gold markets would likely react positively as generally the price of gold has an inverse relationship with interest rates.

Fundamentally the news comes as US lawmakers approve an increase in the US debt ceiling which saw the Dow rally almost 3%.

Bitcoin recovered to US$26,926 at the time of reporting. It has achieved a bounce even despite two US Government Securities and Exchange Commission (SEC) filing of lawsuits against Binance and Coinbase. Overall for the week, Bitcoin is lower by 2.70%.

Ethereum followed a similar trajectory to bitcoin over the last week, but is currently at US$1,878, close to the same level as 7 days ago.

The initial panic of the sell down quickly paved for a renewed buying activity.

BNB, Cardano and Polygon were each down approximately 10% for the 7 days. A number of altcoins were included in the SEC lawsuits by being considered as securities. BTC and ETH were not classified in this same bucket.

Meanwhile the median trading volume across the top three decentralized exchanges (DEX) jumped 444% in the past 48 hours as crypto investors reeled from the United States securities regulator’s recent legal actions against cryptocurrency exchanges Coinbase and Binance.

NFT sales on Ethereum rose 22.81% over the last 24 hours to US$30 million, and sales on the Bitcoin network jumped 159% to US$8.5 million, according to CryptoSlam data. Binance announced this week that it had launched support for Bitcoin NFT’s.

The biggest news of the week was the SEC announcing that it is suing both Binance and Coinbase.

SEC sues Coinbase for violating securities rules – The SEC charged Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency and for failing to register the offer and sale of its staking program. In a press release on Tuesday, the SEC alleged that Coinbase made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities since at least 2019. The SEC said that Coinbase’s failure to register has deprived investors of SEC’s protections and safeguards against conflicts of interest, among other risks. The exchange had already received a Wells notice from the regulator earlier this year, a letter notifying a company when SEC action is pending.

SEC sued Binance, its U.S. branch, and Chief Executive Officer Changpeng Zhao with charges related to securities violations –  The SEC has initiated legal action against cryptocurrency exchange Binance, its U.S. platform, and Chief Executive Officer Changpeng Zhao, levying charges related to securities violations. Binance denies the claims. Binance faces 13 charges in the lawsuit, including unregistered offers and sales of the BNB and BUSD tokens, and unregistered activity related to its Simple Earn and BNB Vault products and its staking program. The SEC also alleges that Binance did not register Binance.com as an exchange or a broker-dealer clearing agency. Binance and BAM Trading, the operator of Binance.US, allegedly failed to register the U.S. platform as an exchange, broker, and clearing agency. The SEC said in a Monday complaint that tokens traded on Binance, including the BNB token issued by Binance, stablecoin BUSD, Solana, Cardano’s ADA, Polygon’s MATIC, are securities and require registration and regulation. This will take some time to play out with significant activity by Binance lawyers on this one. It also led to an exodus of funds from Binance in the 24 hours following the SEC action (being $780m withdrawn).

Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, outlined its Progmat Coin platform last Friday to enable the issuance and trading of stablecoins issued and backed by Japanese banks – Progmat Coin uses blockchain technology to enable the issuance and trading of digital assets. This platform will allow banks in Japan to launch stablecoins on Ethereum, Polygon, Avalanche and Cosmos, with plans to expand to more public blockchains in the future. MUFG’s announcement came a day after Japan’s new laws that limit stablecoin issuance to established financial institutions came into effect.

Crypto.com secures licence for digital payment token (DPT) services in Singapore – Crypto.com, announced on June 1 that it had been granted a major payment institution (MPI) license for digital payment token (DPT) services by the Monetary Authority of Singapore (MAS).

USDC stablecoin issuer Circle obtains Singapore license for digital payments – Circle announced it has received its licence (Major Payment Institution) from the Monetary authority of Singapore to allow it to offer digital payment token services, cross border money transfer services and domestic money transfer services.

JPMorgan uses blockchain for 24/7 dollar transfers with Indian banks – JPMorgan has partnered with six major Indian banks to introduce a blockchain-based platform enabling interbank settlement of dollar transactions. By leveraging blockchain technology to facilitate transactions on a 24×7 basis, processing is instantaneous and enables GIFT City banks to support their own time-zone and operating hours. The initiative also aims to help New Delhi position the GIFT City as an alternative trading center to Singapore and Dubai.

Louis Vuitton To Release $42,000 Physical-Backed NFTs – French luxury fashion house Louis Vuitton is gearing up to release a new physical-linked non-fungible token (NFT) collection called Via Treasure Trunks, paving the way for exclusive members-only products and experiences. The new collection of “a few hundred” digital trunks will open for registration on June 8 to consumers based in the U.S., Canada, France, the U.K., Germany, Japan and Australia. Select customers can then purchase the NFTs on June 16 for €39,000, or about $42,000. As part of the token’s utility roadmap, holders will receive a physical replica of their digital Treasure Trunk, which will also unlock access to upcoming Louis Vuitton products and immersive events.

Zodia Custody launches staking services for institutional clients – The firm said it is the first bank-owned custodian to offer staking services to institutional clients. Cryptocurrency storage provider Zodia Custody said it will offer crypto staking to institutional clients through an agreement with infrastructure provider Blockdaemon. The two firms are attempting to capture the growing institutional interest for staking – the process of offering digital assets to help run a blockchain network in return for rewards.

Standard Chartered, PwC make case for programmable CBDC in China Greater Bay Area – British multinational bank Standard Chartered and PwC China have teamed up to produce a white paper on applications for central bank digital currency (CBDC) in the so-called Greater Bay Area of China — Guangdong Province, Hong Kong and Macao. Programmability will make all the difference, they concluded. The successful launch of programmable use cases in the GBA could provide a foundational framework for how other CBDCs could interact in cross-border commercial scenarios.

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