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US banks report weaker loan demand, Fed survey says

(Reuters)-08/05/2024

U.S. banks reported renewed weakening in demand for industrial loans and a decline in household demand for credit in the first quarter of the year, according to a Federal Reserve survey of senior loan officers published on Monday.

Fed officials had the survey results in hand last week when they decided to keep the policy rate steady in the 5.25%-5.5% range and said they plan to hold them there as long as needed to bring down inflation.

Monetary policy tightening typically works to ease price pressures through credit channels, with higher borrowing costs reducing demand for loans.

That process appeared to be ongoing during the first quarter, with the exception of commercial real estate lending, where signs pointed to some improvement in credit supply and demand.

“Many consumers and businesses are feeling the pinch from reduced credit availability even as the Fed looks set to keep interest rates higher into 2025,” wrote Nationwide economist Ben Ayers. “This could set the stage for weaker activity ahead and makes the economy more susceptible to an unexpected shock.”

The net share of large and medium-sized banks reporting tightening standards for commercial and industrial loans ticked up to 15.6%, from 14.5%, the survey showed. A rising share of banks reported weaker demand for C&I loans.

For commercial real estate loans of all types, however, the share of banks tightening standards shrank to the lowest in two years. A declining share reported weaker demand for CRE loans; foreign banks reported an overall rise in demand for CRE loans.

For households, a rising share of banks reported tightening standards for auto loans, while a shrinking share of banks did so for credit cards and other types of consumer loans, the survey showed.

Household loan demand deteriorated across all categories, the survey showed, with demand for auto loans at its weakest in a year.

Bitcoin distribution ‘danger zone’ over, analysts say

(Coin Telegraph)-08/05/2024

Bitcoin’s price rose above the $65,000 mark on May 6 as analysts argued that the post-halving “danger zone” may be over, with more BTC upside on the way.

Bitcoin out of the post-halving “danger zone” — analyst

Bitcoin’s post-halving danger zone is a three-week window after the halving, historically associated with downside volatility occurring below the reaccumulation range.

With Bitcoin rising above the current reaccumulation range of approximately $60,000, the post-halving danger zone may be over, according to popular crypto analyst Rekt Capital. He wrote in a May 6 post:

“Time-wise the post-Halving ‘Danger Zone’ will continue for the remainder of this week, to see out its third final week in this post-Halving window. However, price-wise the anticipated effect has already occurred.”

During the 2016 bull cycle, Bitcoin produced an 11% downside wick 21 days after the halving, which marked the beginning of the price reversal, noted Rekt Capital in a May 6 X post:

“History did repeat because in this cycle Bitcoin produced a -6% downside wick below its respective Range Low in the 15 days after the Halving. Bitcoin has since rebounded strongly to the upside… The Bitcoin Post-Halving ‘Danger Zone’ is over.”

Meanwhile, Bitcoin analyst Willy Woo also expects higher BTC prices based on the volume-weighted average price (VWAP), a popular oscillator used by traders to determine the average asset price based on price action and volume.

Woo wrote in a May 6 X post:

“Seems like a good setup for BTC to reach escape velocity. Bull divergence with lots of room to run.”

Further showcasing a change in investor sentiment, the Crypto Fear & Greed Index rose to 71/100, signaling “greed” — up from 43/100, or “fear,” on May 2.

Are Bitcoin’s long-term holders done selling?

Outflows from the 11 United States spot Bitcoin exchange-traded funds (ETFs) have contributed to Bitcoin’s correction. The U.S. ETFs recorded their highest week of outflows since launching, with nearly $900 million in net cumulative outflows over the past week, according to Dune data.

Interestingly, data suggests that long-term holders (LTH) at the $70,000 price have finished selling to new investors. Thus, a new active accumulation phase could be starting, according to CryptoQuant author Axel Adler Jr.’s May 6 X post.

This can significantly reduce Bitcoin’s sell pressure, paving the way toward a gradual climb to new highs, according to Eitan Katz, the founder of Kima, a decentralized money transfer protocol. Katz told Cointelegraph:

“The completion of distribution by long-term holders at the $70,000 mark could indeed alleviate some sell pressure in the market. This scenario might contribute to a more stable environment and provide new investors with a clearer path for growth.”

However, Bitcoin could remain subdued in the short term, due to concerns over inflation and dampened expectations for rate cuts, according to Mithil Thakore, CEO of Velar, a Bitcoin-native liquidity protocol. Thakore told Cointelegraph:

“Last week’s decision by the Federal Reserve to maintain interest rates at two-decade highs, while signaling potential future reductions, adds complexity to the market landscape. Considering these factors, short-term consolidation below the previous all-time high is conceivable.”

After the current short-term consolidation, Thakore expects Bitcoin price to reach $100,000 before the end of 2024. He said:

“The latter part of 2024 holds promise for Bitcoin. Anticipated interest rate reductions, renewed demand in ETFs and advancements in Bitcoin layer-2 solutions may fuel a resurgence, potentially propelling Bitcoin to new all-time highs and the coveted $100,000 milestone.”

Revolut debuts dedicated crypto exchange for UK users

(Coin Telegraph)-08/05/2024

Fintech company and global neobank Revolut has made a big move into the cryptocurrency sphere by quietly introducing a specialized crypto trading platform for retail customers in the United Kingdom.

Revolut unveiled Revolut X on May 7, targeting a specific set of customers. The platform is designed to rival major cryptocurrency exchanges by offering easy access for users and charging minimal fees, according to a press release shared with Cointelegraph.

The platform features easy “on-ramping” and “off-ramping,” allowing users to seamlessly convert fiat currencies like the British pound to crypto and vice versa. Notably, Revolut X offers fixed fees of 0% for makers and 0.09% for takers regardless of trading volume, potentially undercutting competitors.

Leonid Bashlykov, the Revolut head of crypto exchange product, said that the company is “excited” to introduce a new crypto product that will “change the game for experienced crypto traders.”

“We understand that competitive fees as well as easy on and off ramping are at the heart of what experienced traders want from a crypto platform.”

Initially, the platform will offer trading for over 100 cryptocurrencies, including popular choices like Bitcoin. However, it says it plans to expand this selection in the coming months.

Bashlykov told Cointelegraph that customers’ digital assets are held 1:1 and never lent out.

“The majority of these funds are also held in cold storage. Rigorous custodian due-diligence and constant risk monitoring mean that we can offer a market leading solution to our customers.”

It added that while the platform was designed with seasoned crypto traders in mind, any U.K. users with a retail account will have access to Revolut X desktop with their existing credentials, and they can trade directly between the platform and their Revolut accounts without additional fees or limitations.

Bashlykov said that the decision to create Revolut X was one they were “thinking about taking for a while.”

“It’s good timing, in the sense that we’re currently amid a bull market and seeing greater regulatory clarity now.”

This move comes after the company scaled back its crypto offerings in the U.K. and the United States due to regulatory hurdles.

Revolut — which started in the U.K. offering money transfers in 2015 — has grown to become one of the country’s largest fintech companies, with over 40 million users worldwide. It began allowing users to buy, hold and trade cryptocurrencies in 2017.

However, in December 2023, the company planned to halt crypto services in the U.K. ahead of new regulations from the Financial Conduct Authority (FCA). The FCA’s rules, which aim to increase transparency and protect investors, have presented challenges for several crypto firms.

Before that, in August 2023, the company suspended its crypto-related services in the U.S., though it only affected around 1% of its user base.

Bashlykov said that the company is taking a “compliance first” approach and strives to comply with the legal and regulatory requirements in all jurisdictions where it offers services.

“We have always been advocating for regulation in the crypto market to ensure consumer protection and a level playing field,” he said.

The launch of Revolut X signifies a renewed focus on crypto for Revolut. It follows the March 2024 introduction of Revolut Ramp, a service that allows users to purchase crypto directly within their Web3 wallets through a partnership with Consensys, the developer of MetaMask.

How long does it take to mine 1 Bitcoin?

(Coin Telegraph)-08/05/2024

1-What is Bitcoin mining?

Bitcoin mining is the network’s method of transaction validation. This process is also how new Bitcoin are added to the existing supply.

There are currently around 19.5 million Bitcoin in circulation and the cryptocurrency is programmed to have a total supply of 21 million. The final 1.5 million or so are locked away, waiting for users with powerful computers to release them through Bitcoin mining.

Bitcoin mining is like a digital treasure hunt. Armed with powerful computer hardware, miners search for a 64-digit hexadecimal code that validates a block of transactions. This code (also called a hash) is found through a process called hashing.

Hashing requires computer hardware to sift through trillions of hashes to find one that matches a block’s difficulty (also called target hash). Once miners find a block’s target hash, they can verify its transactions are genuine and will issue a block confirmation. The network then releases more Bitcoin (BTC).

Finding the target hash can take miners a long time. The amount of time varies based on many factors, such as the Bitcoin network’s current mining difficulty. A difficulty adjustment occurs every 2,016 blocks and raises or lowers based on the number of miners contributing. More miners means a higher difficulty, while fewer miners means a lower difficulty.

Mining rigs abide by Bitcoin’s mining algorithm, SHA-256. SHA-256 is a cryptographic hash function used in password hashing and digital signature verification, among other applications. In the case of Bitcoin, it is used for hashing.

A new block is mined every 10 minutes, and the network releases a fixed amount of Bitcoin and distributes it to miners. This release of Bitcoin is called a block reward. Before the Bitcoin halving in April 2024, the block reward was 6.25 per block. The Bitcoin halving event reduced this reward to 3.125 Bitcoin, with halvings occurring roughly every four years. This halving process was programmed by Bitcoin’s creator and is designed to create digital scarcity and maintain the value of Bitcoin, which also dramatically affects mining profitability.

Bitcoin’s creator programmed the network to halve every 210,000 blocks (around every four years) to create digital scarcity. At this rate, Bitcoin won’t hit its 21 million cap until 2140.

At that point, miners will still earn rewards through transaction fees but will no longer release new Bitcoin into the network.

2-What’s the average time needed to mine a single Bitcoin?

The length of time it takes to mine 1 Bitcoin can vary.

Each committed Bitcoin block releases 3.125 Bitcoin. To answer the central question in mind, it takes an average of 10 minutes to mine not just 1 Bitcoin but 3 — and that rate will fluctuate over time. But, due to the massive amount of computing power it takes to mine a single block (otherwise known as block time), it’s almost impossible for one miner to receive all 3.125 of the reward.

How long does it take for one person to mine 1 Bitcoin? This number will range significantly due to the miner’s hardware. For example, some miners have dozens, if not hundreds, of pieces of mining hardware in an attempt to increase their hash rate. In that case, they will likely earn more Bitcoin per block than other miners with a lower hash rate. Many miners join a mining pool to contribute to Bitcoin mining in a meaningful way.

A mining pool is a group of miners all contributing their hash rate as one entity in hopes of finding a target hash. In doing so, miners earn rewards based on their hash rate contribution.

Rewards are distributed by a mining pool operator, who often charges a mining pool fee. However, miners can contribute to different types of mining pools.

Proportional

A proportional mining pool distributes rewards based on a miner’s hash rate contribution. They can also earn additional rewards through transaction fees.

Pay per last N groups

Pay per last N groups mining pools distribute miners into shifts and pay them out based on their time on “shift.” A shift is a set period in which the miner contributes to the mining pool.

Pay-per-share

Pay-per-share pools provide miners with a fixed income, expecting them to contribute a certain amount of their hash rate daily. While this is a stable way to mine Bitcoin, it removes a miner’s ability to earn transaction fees.

3-How hard is it to solo mine Bitcoin?

Solo mining Bitcoin involves one miner competing with every other miner globally.

Bitcoin’s proof-of-work (PoW) consensus protocol makes mining a natural competition. The chances of a solo miner beating the rest of the world to a block’s target hash are nearly zero — no matter their mining rigs’ power.

In Bitcoin’s early days, mining difficulty was relatively low due to the lack of miners. Block rewards were also much higher, with miners earning dozens of Bitcoin per block. However, Bitcoin was worth less than $1 back then, so the reward was a bit more fitting.

Presently, solo miners join cryptocurrency mining pools to have any chance of earning rewards from Bitcoin mining. Potential miners without a powerful mining rig can also join a cloud mining service to save on the initial investment cost.

Cloud mining services consist of miners leasing out their hashing power via the cloud and asking users to pay for a share of it. As a result, the miners offload some energy consumption costs to paying users. In return, paying users earn block rewards based on their share of hashing power.

4-How to earn 1 Bitcoin per day without investment?

It takes money to make money. Earning Bitcoin without investment is nearly impossible, but there are inexpensive ways to get involved.

It is nearly impossible to earn 1 Bitcoin per day without investment. Bitcoin mining requires energy consumption, which miners pay through their electricity bills. Moreover, Bitcoin mining is intended to get harder and harder over time. It requires a lot of electricity and specialized, pricey hardware.

It is almost hard for an individual to mine 1 Bitcoin per day, even with substantial expenditure. Anyone wishing to mine Bitcoin would have to compete with powerful mining operations, with their economies of scale giving them a significant competitive edge over individual miners.

As of May 6, 2024, 1 Bitcoin is worth $64,116. Earning this much daily without investment would heavily destabilize the cryptocurrency market. Therefore, beware of websites or programs claiming to help you earn 1 Bitcoin daily for free. These are often scams designed to exploit people looking for quick returns.

Those looking to invest in crypto mining should first learn about crypto trading, blockchain technology and cryptocurrency markets. Over time, they might be able to turn minor investments into larger sums of money with the right information and approaches.

Crypto options desk QCP Capital wins Abu Dhabi license: Report

(Coin Telegraph)-08/05/2024

QCP Capital, a cryptocurrency options trading platform, received initial regulatory approval to operate in Abu Dhabi, becoming the latest prominent crypto firm to expand in the region.

The digital asset options trading desk received in-principle approval for regulated digital asset activities from the Financial Services Regulatory Authority of Abu Dhabi Global Markets (ADGM), according to a May 7 statement seen by Bloomberg.

This makes QCP Capital the first Singapore-based crypto market maker and broker to receive preliminary approval in the region, according to an ADGM spokesperson.

QCP, one of the largest crypto options trading desks, amassed $60 billion in crypto derivatives trading volume during 2023. The firm has nearly 70 employees, some of whom will be relocated to Abu Dhabi after the QCP receives its full regulatory approval.

Melvin Deng, CEO of QCP, told Bloomberg:

“Abu Dhabi has got very progressive regulators in that they are thinking about the digital assets as a complete ecosystem with all of traditional finance.”

The UAE is becoming the next global crypto hub

The in-principle approval is in line with the United Arab Emirates’ efforts to become a leading global cryptocurrency hub.

In April, the world’s largest crypto exchange by volume, Binance, received a long-awaited Virtual Asset Service Provider license in Dubai after co-founder Changpeng Zhao gave up his voting power in the exchange’s local entity.

Binance received a preparatory minimal viable product license from VARA in September 2022, enabling the exchange to offer a range of digital asset services for qualified retail and institutional investors.

Binance received its full license over one and a half years after the preliminary approval. For QCP Capital, the full regulatory license may come sooner, as the trading desk isn’t facing the same level of regulatory scrutiny as Binance.

In February, ADGM signed a memorandum of understanding with the Solana Foundation to advance the development of distributed ledger technology.

Central banks must revise business model, embrace CBDCs — ECB member

(Coin Telegraph)-08/05/2024

Central banks’ future depends on a revision of their business model and speedy adoption of central bank digital currencies (CBDCs), said Joachim Nagel, president of the Bundesbank and member of the European Central Bank (ECB).

Nagel reportedly warned about the uncertainty surrounding central banks during a panel session at the Innovation Summit hosted by the Bank for International Settlements on May 6.

“If you would have asked me 20 years ago if the central bank business model [was] destroyable or not, I would have said no,” he reportedly stated in Basel, Switzerland. Nagel continued:

“Now I am not so sure anymore — and that is the reason why we are sitting here. We need to work on our business model. And DLT is just a means, an instrument that could help us here to get to that point.”

The Bundesbank chief stressed the importance of integrating distributed ledger technology as physical money loses its appeal. “We need to speed up on all this […]. If part of your core product is losing attractiveness, then you have to think about another new core product,” Nagel stated.

French ECB member François Villeroy de Galhau also discussed central banks and emerging technologies. Earlier during the BIS conference, Galhau reportedly suggested the banks consider using digital currencies for wholesale and retail transactions:

“The way we make central bank money available has to be geared to the 21st century to ensure that central bank money maintains its fundamental role: this role is not to be the dominant means of payment, but a stability anchor for the financial system. This is why I believe that, sooner or later, we will need a central bank digital currency for wholesale as well as for retail purposes.”

The ECB is currently developing a digital version of the euro, having completed its investigation phase in order to determine its design and technical details. The ECB expects to complete the project by October 2025.

Powell Keeps Rate Cuts on Table But Leaves Timing Less Certain

(Bloomberg)-02/05/2024

Federal Reserve Chair Jerome Powell kept hopes alive for an interest-rate cut this year while acknowledging that a burst of inflation has reduced policymakers’ confidence that price pressures are ebbing.

Powell, speaking to reporters Wednesday following the US central bank’s latest meeting in Washington, said price growth will likely resume cooling this year, but avoided offering a timeline for rate cuts.

Powell’s remarks reflected a broader shift in thinking at the Fed toward holding borrowing costs at a two-decade high for longer. That change in tune — first voiced last month — represented the culmination of several months of firm increases in inflation, hiring and consumer spending that has also led investors to pare back bets from roughly six rate cuts this year to just one.

“I don’t know how long it’ll take,” Powell said of when he and his colleagues might have the confidence to cut rates. “I can just say that when we get that confidence then rate cuts will be in scope, and I don’t know exactly when that will be.”

Policymakers left interest rates unchanged in a range of 5.25%-5.5%, where they’ve been since July. As recently as March, Powell said it would likely be appropriate to start cutting rates “at some point this year” — a phrase he didn’t repeat on Wednesday.

The Fed chief also established a high bar for further rate hikes, saying it’s unlikely that the next policy move will be a rate increase. Officials would need to see “persuasive evidence” that policy isn’t sufficiently restrictive to bring inflation down to their 2% target to consider raising rates again, Powell added.

“There is a clear bias towards easing and he stuck to that,” Seth Carpenter, chief global economist at Morgan Stanley, said on Bloomberg TV. “The market discussion was about: Should we start pricing in rate hikes? And he was quite clear that that is not where they are.”

Powell’s comments soothed investors’ fears that the central bank leader would more forcefully lean against rate cuts this year, or even flag a potential hike. Treasury yields slid and stocks briefly rallied during the press conference, moves that were particularly notable after Powell said a rate hike was “unlikely.”

Officials also announced plans to slow the pace at which they’re rolling maturing assets off their balance sheet beginning in June. The cap on Treasury runoff will fall to $25 billion per month from $60 billion while the cap on mortgage-backed securities will remain at $35 billion.

With principal payments of agency securities currently running at about $15 billion per month, the total monthly portfolio runoff will be about $40 billion, Powell said.

Inflation Impact

In the six weeks since the Fed’s last meeting in March, officials have increasingly expressed concern over incoming data that appeared to show inflation stalling out — or even reaccelerating. The central bank’s preferred gauge, the personal consumption expenditures index, rose 2.7% in March from a year earlier. That compared to a 2.5% advance in January.

Policymakers explicitly acknowledged that data by adding a line to their post-meeting policy statement noting the “lack of further progress” toward their inflation goal in recent months.

While the PCE price index is down from its 2022 peak of 7.1%, the higher-than-hoped inflation figures have raised questions about whether the “last mile” of the Fed’s drive to bring down inflation will be the toughest.

Paired with still-strong economic growth and robust hiring, it’s also sparked discussion about just how much Fed policy is weighing on the economy. Powell clearly pushed back against that idea Wednesday.

“I do think the evidence shows pretty clearly that policy is restrictive and is weighing on demand,” Powell said. “We believe over time it will be sufficiently restrictive.”

Read More: Fed Resets Clock on Cuts and Questions If Rates Are High Enough

Fed officials, who spent the bulk of 2022 and 2023 aggressively raising rates in an effort to cool price growth, have said the risks to both their inflation and employment goals are now in better balance. Powell repeated that message, reiterating the Fed is prepared to lower borrowing costs should there be an unexpected weakening in the labor market.

“Chair Powell’s base case remains that inflation will resume a downward trend, so I read that as meaning he still sees the likelihood of rate cuts this year,” said Kathy Bostjancic, chief economist at Nationwide Mutual Insurance Co. “So he is still leaning towards rate cuts, but unlikely to be three cuts given we are already one-third into the year.”

Policymakers forecast three rate cuts this year at their December and March meetings, according to their median rate projection. Though they won’t update those forecasts until their meeting in June, most Fed watchers expect just one cut now.

Oil prices rebound on hopes US will replenish strategic reserve

(Reuters)-02/05/2024

Oil prices rose on Thursday, rebounding from three days of losses, on expectations the lower levels may prompt the U.S., the world’s biggest crude consumer, to start replenishing its strategic reserve, putting a floor under prices.

Still, prices fell more than 3% on Wednesday to a seven-week after the U.S. Federal Reserve kept interest rates steady, which may curtail economic growth this year and limit oil demand increases.

Crude was also pressured by an unexpected increase in U.S. crude inventories and signs of an impending Israel-Hamas ceasefire that would ease Middle East supply concerns.

Brent crude futures for July gained 58 cents, or 0.7%, to $84.02 a barrel by 0633 GMT on Thursday. U.S. West Texas Intermediate (WTI) crude for June climbed 53 cents, or 0.7%, to $79.53 a barrel.

“The oil market was supported by speculation that if WTI falls below $79, the U.S. will move to build up its strategic reserves,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

The U.S. has said it aims to replenish the Strategic Petroleum Reserve (SPR) after a historic sale from the emergency stockpile in 2022 and wants to buy back oil at $79 a barrel or less.

In the Middle East, expectations grew that a ceasefire agreement between Israel and Hamas could be in sight following a renewed push led by Egypt.

Still, Israeli Prime Minister Benjamin Netanyahu has vowed to go ahead with a long-promised assault on the southern Gaza city of Rafah despite the U.S. position and a U.N. warning that it would lead to “tragedy”.

“As the impact of the U.S. crude stock-build and the Fed signalling higher-for-longer rates is close to being fully baked in, attention will turn towards the outcome of the Gaza talks,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

“As long as the latest bout of optimism over a ceasefire sustains, I expect a continued downside bias in crude,” Hari added.

The U.S. Energy Information Administration (EIA) said crude inventories rose by 7.3 million barrels to 460.9 million barrels in the week ended April 26, compared with analysts’ expectations in a Reuters poll for a 1.1 million-barrel draw.

Crude stocks were at the highest point since June, the EIA said.

The U.S. Federal Reserve held interest rates steady on Wednesday and signalled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings.

Any delay in rate cuts could slow economic growth and dampen demand for oil.

Still, continuing supply reductions by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will support prices.

Analysts at Citi Research expects OPEC+ to hold output cuts through the second half of the year as it meets on June 1.

However, “if prices move to a bull case $90-100+ range, OPEC+ would likely ease cuts, providing a soft ceiling for oil,” they said in a note.

New record Bitcoin processes 1.6M confirmed payments in a day

Venezuela’s Digital Currency Use to Face Tighter Regulatory Scrutiny

(Crypto News)-02/05/2024

Experts warn that Venezuela’s likely shift towards digital currency necessitates stricter regulations.

The development comes as Venezuela’s state oil company PDVSA is ramping up digital currency use for crude oil and fuel exports, according to Reuters. This decision follows the Biden administration declining to renew a license that had eased restrictions. Essentially, this led to reimposed sanctions on Venezuela’s oil industry.

In response, Venezuelan opposition politician Leopoldo Lopez and a Chainalysis director Kristofer Doucette presented a report on Monday, calling for democratic governments to take action. Their report detailed financial transactions conducted since Venezuelan President Nicolas Maduro’s inauguration.

Government efforts should be taken to counter “Maduro’s attempts to exploit cryptocurrency to move illicit proceeds into the international financial system,” the report said.

Venezuela Turns to Digital Currency to Bypass Oil Sanctions

Since last year, PDVSA has reportedly been quietly ramping up its use of digital currency. The company has particularly been using Tether (USDT) for oil sales to avoid having accounts frozen by US oil sanctions.

Maduro earlier suggested there are countries interested in doing business with Venezuela. But they would be willing to do so if they could use digital currency to avoid the traditional financial system.

The report further stated that other autocratic leaders under international sanctions, like those in Iran and Russia, have launched their own crypto programs. These programs, the report alleges, are a way to dodge financial systems reliant on US dollars or Euros, currencies vulnerable to sanctions.

Global Action Needed to Block Crypto Lifeline for Sanctioned Regimes

Lopez and Doucette put out a strong call to action for Western governments, particularly the US. To safeguard sanctions’ effectiveness, they must close the loophole autocratic regimes are exploiting with cryptocurrency, they said.

Furthermore, their report emphasized the need for a global effort. This effort would involve cooperation with new crypto platforms, bringing them on board as key players. The goal would be to ensure these platforms keep autocrats out of this new financial system.

It also singled out financial institutions and crypto exchanges for being part of the fight against the Maduro regime. To cut off their access, these institutions need to build strong safeguards to prevent the regime from moving, laundering, or hiding its assets within the global financial system, the report said.

Crypto investment funds see $435M outflow as bull market stalls amid rising inflation concerns

(Coin Telegraph)-02/05/2024

Reporting from CoinShares highlighted a weekly $435 million outflow from cryptocurrency investment products in the week ending April 26. Crypto exchange-traded products (ETPs) have now experienced outflows for the third consecutive week as Bitcoin price remains rangebound in the low $60,000 range.

Bitcoin funds led outflows, with $423 million exiting the market after the halving event, while Ether investment products also experienced withdrawals of $38 million, marking their seventh consecutive week of negative flow. Solana and Litecoin ETPs experienced deposits, posting net inflows of $4.1 million and $3.1 million, respectively.

According to CoinShares, the negative outflows are likely due to “deceleration in inflows from new issuers,” which saw only $126 million in inflows last week, compared to $254 million the week prior.

Data from Farside Investors reveals that BlackRock’s Bitcoin ETF, IBIT, recorded “zero flows” for the first time last week. The other issuers have experienced various days of zero inflows over the last few weeks amid decelerating outflows from Grayscale’s GBTC.

The negative outflows are likely a result of investors’ concerns about U.S. stagflation – a combination of slower economic growth rate and sticky inflation, further weakening the probability of the Fed rate cuts.

According to the CME FedWatch tool, traders are placing the odds of a June rate cut at just 11.3% at the time of writing versus 44.8% for September and 43.8% for November. This means market analysts are betting that the U.S. Federal Reserve will hold rates steady in May and June, with the first possible cut being later in the year.

Bitcoin bull run experiencing a “short-term pause”

Analysts at brokerage firm Bernstein say that the slowdown in spot Bitcoin ETF inflows is not the beginning of a negative trend but is a “short-term pause” before BTC resumes its bull run.

In a note to clients, Bernstein analysts Gautam Chhugani and Mahika Sapra wrote in a report,

“We don’t expect the Bitcoin ETF slowdown to be a worrying trend, but believe it is a short-term pause before ETFs become more integrated with private bank platforms, wealth advisers and even more brokerage platforms.”

The analysts emphasized their $150,000 cycle target for the Bitcoin price by the end of 2025, citing “unprecedented ETF demand,” which has seen $12 billion of spot Bitcoin ETF net inflows since their market debut on January 11.

A new report by Ecoinometrics asks its readers to watch out for a pivot in the financial conditions that could “make or break the Bitcoin bull market.”

The report explains that while spot Bitcoin ETFs “opened up a new source of demand,” turning macro winds and the failure of the U.S. Federal Reserve to control inflation could trouble the bull market.

“That could cause a re-tightening of the financial conditions. And this would create a headwind for the bull market.”

According to Ecoinometrics, the Federal Reserve Bank of Chicago’s National Financial Conditions Index (NFCI), which measures the level of tightness in the U.S. financial system, is stalling and is at the same level it was in 2022 when the rates started hiking.

As the chart above reveals, the NFCI is stalling, which is a possible explanation for why risk assets, such as Bitcoin, are bearish, Econometrics explained.

“If it just stays at that, then we are simply experiencing a pause in the bull market. But if this is a pivot in the financial conditions, the bull market would be in trouble.”

“There is a potential positive catalyst next week as the HK BTC and ETH spot ETFs begin trading. Interest is growing in what could be a gateway for the inflow of Asian institutional capital,” QCP wrote in a note over the weekend.