Weekly Crypto Market Wrap, 24th July 2023

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Week in Review

• International Financial Stability Board (FSB) finalises global regulatory framework for digital asset activities.
• Nasdaq halts launch of crypto custody service, claims to continue its position as “a leading digital assets software solutions provider.”
• SEC hints at potential appeal to XRP ruling from Ripple Labs lawsuit – Meanwhile, Ripple applies for crypto license in the UK.
• FTX sues Sam Bankman Fried and other former execs for more than $1 billion.
• Number of crypto-related employees surged by 160% since 2019.
• Celsius Network (CEL) reaches settlement to exit bankruptcy.
• Federal Reserve launches instant payments service FedNow, clarifies no relation to CBDC development.
• Binance integrates with Bitcoin lightning network.
• US Presidential candidate Robert Kennedy Jr. vows to back the US dollar with Bitcoin and end its taxes, if elected president.
• Dormant, pre-mined Ethereum address worth $116 million is activated after 8 years of inactivity.
• Kuwait bans crypto payments, investing and mining as an AML measure.
• China’s quarter GDP growth registers at 0.8%, compared to 2.2% in Q1 2023.
• Canadian inflation faults to 27-month lows, UK inflation report also below expectations.

Winners & Losers

Data source: TradingView

Market Highlights

• Bitcoin’s price continues to languish between $29,500 and $30,500 as the market takes on a tentative stance in anticipation of the upcoming FOMC decision on Wednesday. Despite a brief price surge on Thursday, Bitcoin and Ether remain in their respective confined trading ranges, contributing to an overall lacklustre trading week. Other cryptocurrencies such as SOL and XRP managed to recover some of their losses from last weekend, and MakerDAO’s MKR token saw double-digit gains due to a token buyback program. Meanwhile, the effect of an SEC-approved Bitcoin ETF on the market remains a critical price driver, with the lack of price action we see largely down to the looming decision of the first ETF in mid-August. 

• The past week has been quiet for traditional markets in anticipation of FOMC this week with the SPX gaining 0.69% and the DXY gaining 1.13%. Bonds also had a very quiet week with the 10-year yields recording the smallest daily range in almost a year on Friday. Markets are pricing in a 25-basis point hike by the Fed this week. The market is undecided on September’s decision with a 56% chance of a hike, and will be looking for clues on a potential pause or pivot in the press release which may become a key driver of the markets in the coming weeks.
  

Key data releases to monitor this week

Tues | AUD Inflation Rate (YoY) – Forecast: 6.3%, Previous: 7%
Thurs (AEST) | FOMC – Forecast: 5.5%, Previous: 5.25%
Thurs | ECB IR Decision – Forecast: 5.5%, Previous: 5.25%
Fri | BOJ IR Decision – Forecast: -0.1%, Previous: -0.01%

• The past month’s price movements have been shaped by the ETF narrative & XRP’s partial case victory against the SEC. On Friday last week, we saw the SEC challenging the recent court ruling in favour of Ripple Labs, in which the judge ruled the company did not violate securities laws when offering its XRP token to retail investors but breached regulations for its institutional sales. Amid these legal battles is the use of the Howey test, with the SEC maintaining the Ripple decision incorrectly applied this test and created an unwarranted distinction between institutional and retail investors. XRP’s price has stagnated as a result, trading 14% lower than the highs reached early in the week. Considering the implications, it’s no surprise that the SEC has chosen this course of action and it proves to be a critical case for crypto assets. 
• BTC collars in August are an interesting play, given the first ETF decision scheduled for August 13th. The market is expected to remain range-bound until the verdict is known, after which we may finally see this range tested in either direction. Although there’s been a spike in put skew for July, calls continue to be favoured in August. To leverage this skew, one could consider purchasing an August 27k/33k collar, where you buy a 27k put and sell a 33k call. 

Data source: Velodata

What to Watch 

• France, Germany, UK and US’ flash manufacturing reports, on Monday.
• US consumer confidence report, on Tuesday.
• FED’s FOMC press conference and federal funds rate, on Wednesday.
• EU’s monetary policy statement and US’ advance GDP, on Thursday.
• BOJ’s outlook report and monetary policy statements, on Friday.

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* Index used:

Bitcoin	Ethereum	Gold	Equities	High Yield Corporate Bonds	Commodities	TreasuryYields
BTC	ETH	PAXG	S&P 500, ASX 200, VT	HYG	SPGSCI	U.S. 10Y

FAQs

What was the significant event for the International Financial Stability Board in the week of 24th July 2023?

The International Financial Stability Board (FSB) finalized a global regulatory framework for digital asset activities in the week of 24th July 2023. This framework is expected to have a significant impact on the global digital asset market.

What were the market highlights in the week of 24th July 2023?

Bitcoin’s price remained between $29,500 and $30,500, with the market anticipating the upcoming FOMC decision. Other cryptocurrencies such as SOL and XRP managed to recover some of their losses, and MakerDAO’s MKR token saw double-digit gains due to a token buyback program.

What was the impact of the SEC challenging the recent court ruling in favor of Ripple Labs?

The SEC challenged the recent court ruling in favor of Ripple Labs, where the judge ruled that the company did not violate securities laws when offering its XRP token to retail investors but breached regulations for its institutional sales. This legal battle has led to a stagnation in XRP’s price, trading 14% lower than the highs reached early in the week.

What is the significance of the first ETF decision scheduled for August 13th?

The first ETF decision scheduled for August 13th is expected to be a critical price driver for the crypto market. The market is expected to remain range-bound until the verdict is known, after which we may finally see this range tested in either direction.

What are the key events to watch in the crypto market?

Key events to watch include France, Germany, UK and US’ flash manufacturing reports, US consumer confidence report, FED’s FOMC press conference and federal funds rate, EU’s monetary policy statement and US’ advance GDP, and BOJ’s outlook report and monetary policy statements.

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