Crypto Rally Fueled by Blackrock ETF Application

Global markets, led by US equities, experienced a slight decline this week, wiping out the gains from the previous week. 

This drop came after Federal Reserve Chair Jerome Powell's recent semi-annual policy appearance at Capitol Hill, where he indicated that the Fed remains hawkish. While Powell acknowledged that inflation has cooled down, he emphasized that it still remains above the 2% target. 

Consequently, there is a likelihood that the market will witness further rate hikes this year, totaling 0.5%. This would likely translate into two additional 0.25% hikes.

These sentiments have dampened the optimism that emerged after the Fed's decision to pause interest rate hikes earlier this month. Evidently, we are not yet fully out of the woods, and it may take some time before the Fed changes its stance.

However, it is interesting to note that not all risk-on assets have plummeted in response to this news. Bitcoin, along with the broader cryptocurrency market, has surged this week, and BTC’s price is now hovering above $30K. 

Bitcoin Strongly Rebounds on Blackrock ETF Application

The crypto market has bounced back to life after several weeks of choppy price action, pushing the total market capitalization past $1.2 trillion.

Notably, Bitcoin performed exceptionally well, hitting a market dominance of 50% for the first time in two years, according to data from TradingView.

This growing interest in BTC can be attributed to Blackrock's recent Bitcoin ETF application, which has sparked a lot of excitement within the crypto community. 

Already, two more investment firms, Invesco and WisdomTree, have lodged new Bitcoin ETF filings, signaling renewed optimism about the chances of a Bitcoin ETF being approved in the US in the near future.

While this recent rally doesn't necessarily indicate a complete reversal to a bullish trend in the crypto market, it certainly provides a much-needed boost. 

What's interesting is that it is largely driven by institutional investors and goes against the recent sentiments expressed by US regulators, who have been cracking down on the crypto industry. 

Exciting times lie ahead for those who have managed to weather the storm!

Noteworthy Mentions 

The Current State of Central Bank Digital Currencies (CBDCS) 

The debate surrounding Central Bank Digital Currencies (CBDCs) is heating up, with over 114 countries exploring their implementation. CBDCs offer increased transparency and traceability to combat illicit activities, but privacy concerns arise as a trade-off. Striking the right balance is crucial for a smooth transition to this new form of digital currency. Will CBDCs see widespread adoption? Read our latest article here.

Industry Shakers 

Binance troubles far from over 

Binance, the world's largest cryptocurrency exchange, faced more troubles this week. It deregistered its UK subsidiary and exited the Cyprus market. Additionally, French authorities are investigating Binance for potential anti-money laundering violations. This investigation follows Binance's departure from the Netherlands after failing to obtain a license from the Dutch central bank.

Tether FUD and depegging concerns 

On June 15, the Tether stablecoin (USDT) slightly deviated from its peg to the United States dollar. This occurred due to an imbalance in Curve's 3pool, causing the price of USDT to decrease by 0.3% to approximately 0.997. Tether's Chief Technology Officer, Paolo Ardoino, however, reassured the crypto community via Twitter that the depegging incident should not be a cause for concern and affirmed Tether's readiness to redeem any amount.

Deutsche bank applies for a digital asset custody license in Germany

Deutsche Bank AG has applied for regulatory permission to operate as a cryptocurrency custodian in Germany. This move follows BlackRock's recent filing with the SEC to establish a spot bitcoin ETF. Deutsche Bank had previously announced its exploration of cryptocurrency custody in February 2021, aiming to provide an institutional-grade storage solution with insurance-grade protection. 

UK Set to Pass Crypto and Stablecoin Regulations

The House of Lords, the second chamber of the UK Parliament, has given its approval to the Financial Services and Markets Bill (FSMB). This bill includes regulations for stablecoins and cryptocurrencies, along with provisions for overseeing crypto promotions. Having already been approved by the House of Commons, the bill will now move on to the final stages, which involve the Consideration of Amendments and obtaining Royal Assent.

Also published here.