Brazil’s tax authority is reportedly planning to seek information from foreign cryptocurrency exchanges to find out how they operate in the country and whether its citizens are complying with the country’s new tax laws or not.
The Receita Federal do Brasil (Federal Revenue of Brazil) is expected to publish an ordinance summoning these firms for further information later this week, according to a June 18 report from Reuters citing comments from Brazilian officials.
“It’s an area of concern for us to understand first how they operate here, whether there’s any illegality or not,” Andrea Chaves, DFR’s Deputy Secretary of Inspection told Reuters.
“We are also concerned about having information on Brazilian wealth subject to taxation.”
Up until now, only local cryptocurrency exchanges have been obligated to report transactions conducted on their trading platforms.
Last December, Brazil passed a law mandating Brazilians to pay a 15% income tax on cryptocurrency profits and dividends earned on foreign exchanges.
The Brazilian tax authority intends to collect around $4 billion (20 billion Brazilian reals) in the 2024 financial year.
Binance, Coinbase, OKX and KuCoin are among the notable trading platforms operating in the country. Binance currently holds the largest market share in Brazil, accounting for 79% of all transactions — though it has lost some of its dominance to Brazil’s Mercado Bitcoin and Mexico-based Bitso in recent months.
Meanwhile, Brazil saw a spike in cryptocurrency trading activity in the first few months of 2024, increasing 30% year-on-year to $6 billion between January and May.
A recent Kaiko report revealed that it is the largest market player in Latin America and the seventh-largest worldwide in terms of fiat currency trade.
Stablecoin transfers remain the main source of cryptocurrency activity in Brazil.
Prospects for retail crypto trading in Canada are looking good, and a convergence of factors, including the local regulatory environment, is likely to continue driving market growth.
“We have certainly seen retail come back,” Dean Skurka, CEO of Canadian crypto asset platform WonderFi, told Cointelegraph’s Sam Bourgi at the Collision event in Toronto.
Canada experiences lucky convergence for crypto
Skurka said the convergence of the interest rate cut by the Bank of Canada, leading to greater discretionary spending by the public, along with strong interest in Bitcoin and Ether exchange-traded funds that put crypto “in favorable standing [with] a broader audience” and the expected impact of the BTC halving promise a strong retail market.
“It’s not going to happen overnight,” Skurka said, but indicators of public receptiveness to crypto are there. New signups spiked at WonderFi along with the all-time high price for BTC, he noted. He expected to see it in the next six to 12 months.
WonderFi, which had early backing from billionaire celebrity Kevin O’Leary, has acquired an impressive stable of crypto firms that it plans to combine into a single entity, thanks to its merger with Coinsquare in July 2023. That firm is regulated by the Canadian Investment Regulatory Organization.
WonderFi has also acquired Bitbuy and Coinberry. It reached $1 billion in assets under management at the end of 2023.
WonderFi looks abroad and appreciates home
Canadian regulators have addressed staking and the crypto spot market, and Skurka predicted crypto derivatives — such as futures — to be the next to be regulated. As WonderFi begins implementing plans to expand into the Asia-Pacific region, it has gained new perspective on the Canadian regulatory environment.
Canadian regulators “further ahead” compared with their Asia Pacific colleagues, Skurka said. The firm’s experience with Canadian regulators will inform its actions in APAC markets. WonderFi will make public its activities in APAC within months.
Other industry figures have shown less enthusiasm for Canadian regulation. Rules introduced by the Canadian Securities Administrators in February 2023 led to the withdrawal of several crypto firms from the country.
A large memecoin holder, or whale, has made a $3.7 million profit after selling their MAGA (TRUMP) tokens amid the current market sell-off.
Whale wallet “0x52C0” has sold over 171,000 TRUMP tokens for 414 Ether worth $1.44 million in the past 24 hours, for a total profit on their investment of over $3.7 million.
The whale has been selling their TRUMP tokens at the $8.38 mark, according to a June 18 X post by Lookonchain.
Looking at the savvy whale, 28% of their wallet still consists of TRUMP tokens worth $372,000. Their largest holding is the BasedAI (BASEDAI) token, worth $921,000 at the time of writing and accounting for over 71% of the wallet.
At its peak valuation on June 2, the whale wallet was worth $7.53 million, according to CoinStats.
Why is the TRUMP token down?
The whale started locking in their profits just as the TRUMP token started its price decline.
The token fell over 30% in the 24 hours leading up to 9:00 am UTC to trade at $7.88. The memecoin is down over 37% on the weekly chart, according to CoinMarketCap data.
Trump-related cryptocurrencies started falling amid rumors that Donald Trump’s team launched an “official” token on Solana.
Pirate Wires claimed in a June 17 X post that Trump’s 18-year-old son, Barron, was “spearheading” the token under the name TrumpCoin (DJT).
However, Trump’s team hasn’t confirmed the token launch, and blockchain data firms such as Bubblemaps seem confident that DJT isn’t linked to the presidential candidate.
Large holders are taking note of the marketwide memecoin sale, which saw some of the most popular meme tokens log double-digit gains.
Leading memecoins Dogecoin and Shiba Inu fell 13% and 18% on the daily chart, while Pepe tanked 13%, and Solana-based Dogwifhat (WIF) fell over 20%, according to CoinMarketCap data.
The total market capitalization of memecoins fell 9.4% to $46.6 billion in the past 24 hours, while trading volume rose 79% to $6.25 billion.
Other TRUMP token whales have also taken note of the decline and started locking in profits. Wallet “0x35D1” sold their tokens for a $648,000 profit, while trader sighduck.eth sold their tokens for an over 1,500% gain of $1.88 million.
The Central Bank of Ireland has approved 15 different VASPs from June 7, 2024, including Crypto.com, Coinbase, Gemini, Ripple and others.
The Central Bank of Ireland (CBI) has given a nod to another major cryptocurrency company, Crypto.com, as a virtual asset service provider (VASP).
Crypto.com, one of the world’s largest crypto trading platforms, announced on June 11 that it had received VASP approval in Ireland. The approval allows Crypto.com to expand its offering in the country, including crypto-to-fiat exchanges and fiat wallets.
Crypto.com’s president and chief operating officer, Eric Anziani, said the approval shows the company’s commitment to compliance and responsible innovation.
“We are excited to broaden our offering in Ireland, enabling consumers to engage with the most comprehensive crypto product offering,” the exec added.
Crypto.com declined to comment to Cointelegraph on the specifics of new crypto services enabled in Ireland with the latest VASP approval.
Ireland has approved 15 entities as VASPs
In obtaining the approval, Crypto.com joins several crypto firms regulated by the country’s central bank, including the United States-based crypto exchange Coinbase.
The full list of registered VASPs in Ireland features 14 entities as of June 7, including major industry firms like Ripple, the Winklevoss brothers’ Gemini exchange, MoonPay, Standard Chartered’s Zodia custody platform, Paysafe and others.
Seven companies on the list received approvals in Ireland in 2023. In 2024, the CBI approved four others, including Foris DAX Global, Fortuna Digital Custody, Ramp Swaps and Crypto.com.
Some crypto firms opted to leave Ireland
The Central Bank of Ireland’s approval of Crypto.com marks another milestone in the country’s growing interest in the crypto industry.
Coinbase, the largest crypto exchange in the U.S. by trading volumes, selected Ireland as its European crypto hub in late 2023.
Coinbase chose Ireland to help it comply with Europe’s major cryptocurrency regulatory framework, the Markets in Crypto-Assets Regulation.
Other major companies, including Ripple and Gemini, have also been cementing their presence in Ireland while facing issues from U.S. regulators.
On the other hand, Circle Internet Financial — the company behind the world’s second-largest stablecoin, USD Coin — announced plans to return to the U.S. and move away from Ireland in May 2024.
Data from Cointelegraph Markets Pro and TradingView showed a 3% dip taking Bitcoin to lows of $67,320 on Bitstamp after the daily close.
Lacking support at the key $69,000 level, Bitcoin bulls failed to stave off a downward move through thin exchange order book liquidity.
The day prior, Keith Alan, co-founder of trading resource Material Indicators, had warned that insufficient bids could be a warning sign for BTC price strength.
“Sure we have some laddered bid support in here, but not a heavy, heavy concentration of it — and really, it’s not even heavy down to $60,000 if I can be completely honest,” he said during his latest YouTube update.
An accompanying chart covered order book liquidity for the BTC/USDT pair on the largest global crypto exchange, Binance.
In a subsequent post on X, Material Indicators noted that with the latest move down, Bitcoin had formally rejected $69,000 as support and had also given up the 21-day moving average — a key short-term trendline.
“Support at the 21-Day Moving Average and the R/S Flip at $69k have both been invalidated,” it read.
“This move isn’t over. In fact I expect these killer whale games to continue up to and through JPow’s comments on Wednesday and economic reports on Thursday.”
As Cointelegraph reported, the week’s main potential volatility catalyst for Bitcoin and crypto price action is United States macroeconomic data — the Consumer Price Index (CPI) and Producer Price Index (PPI) — along with the Federal Reserve’s latest interest rate decision and accompanying press conference by Chair Jerome Powell.
“So far CPI/PPI has been around the highs of this range & FOMC resulting in local lows,” popular trader Skew continued on the topic.
Mixed opinions on Bitcoin support
In his own market analysis, meanwhile, fellow trader and commentator Credible Crypto suggested that the outcome of the down move may not be as radical as a trip to $60,000.
With liquidity being added and pulled from the market at will by large-volume traders, appetite for BTC could spare bulls any lower than even $65,000.
“We continue to see spot absorption on each and every move down, even on lower timeframes,” he summarized to X subscribers.
Credible Crypto noted that overhead resistance at $72,000 had been “pulled immediately” once Bitcoin began reversing.
“What are the odds we front run range lows and 62-65k and just reverse from here? I think they are decent,” he concluded.
“No guarantees of course, but we will know soon enough with developing PA over the next 24 or so hours.”
As BTC continues to trade sideways at high levels, the bull market momentum is unstoppable, and platform tokens are once again drawing attention.
This article analyzes and compares the platform tokens of several leading platforms, focusing on three dimensions: platform token earnings, buyback and burn, and fee discounts for investors’ reference.
The earnings from platform tokens consist of two major parts: active earnings, which refer to the token’s own price increase, and passive earnings, which include dividends, new token offerings, airdrops, and other benefits. According to CoinMarketCap data, the performance of the top ten platform tokens by market capitalization over the past year is as follows:
Data shows that MEXC’s platform token MX has increased by 101% over the past year, surpassing even BNB, while OKX’s platform token OKB has seen an annual increase of less than 5%.
Additionally, comparing other second-tier exchanges, Bitget’s passive earnings (from new token offerings and airdrops) fall far short of MEXC’s. MX’s passive earnings are significantly higher. According to statistics, since last July, MEXC has been airdropping tokens to MX holders every month, with an average of over 150 token airdrops each month. Over six months, a total of 927 project tokens were airdropped, resulting in an APY of up to 76%. As shown below:
In 2024, MEXC further increased its airdrop intensity, with an average of nearly 250 tokens airdropped per month from January to April. The APY reached 107%, far surpassing BGB holders.
According to the MEXC official website, airdrop participation is a simple process. Users need only hold MX to receive all new token airdrops for free. Compared to other platform tokens, MEXC’s airdrops have a significantly lower entry barrier, allowing more MX holders to enjoy higher returns.
In fact, MX’s token price is severely underestimated during the bull market. After users receive token airdrops by holding MX, if they convert these earnings into MX tokens, they can easily achieve a compounding effect, thus achieving tremendous profit potential.
Trading fee discounts: MX offers the biggest savings
Using platform tokens to offset trading fees is a common promotional strategy on cryptocurrency trading platforms. Each platform has its own discounts, as summarized below:
Conclusion
In the bull market’s complex investment landscape, cryptocurrency users may consider positioning themselves in platform tokens that have stable value support, excellent performance, and from up-and-coming platforms that can generate various expected returns. MX is an important alternative in this regard, as it can effectively mitigate investment risks and achieve better investment returns.
Former United States President Donald Trump is ramping up his advocacy for cryptocurrency, now setting his sights on becoming the “crypto president.”
He made the comment during a fundraising event in San Francisco, co-hosted by Craft Ventures’ general partner, David Sacks, and tech billionaire Chamath Palihapitiya, according to a recent Reuters report.
At this gathering, Trump purportedly affirmed his commitment to cryptocurrency, asserting his readiness to champion the industry’s advancement, while cautioning against the Democratic Party’s purported inclination towards stringent regulations.
The fundraising event proved to be a significant boon for Donald Trump’s promotional efforts, reportedly netting a substantial $12 million in support ahead of the November 5 U.S. presidential election.
Trump’s Crypto Support Comes in Contrast to Biden
Donald Trump’s embrace of cryptocurrency aligns with his broader strategy to distinguish himself from the policies espoused by the current administration, particularly in light of President Joe Biden’s recent decision that drew ire from the crypto community.
Just a week prior, Biden faced criticism after vetoing a resolution aimed at overturning the controversial U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121.
This bulletin, which mandates institutions holding cryptocurrency assets to record them as liabilities on their balance sheets, has been a point of contention within the industry.
Trump’s vocal support for cryptocurrency is not new, as evidenced by several recent public statements.
On May 26, he reiterated his stance that the United States must assert its dominance in the crypto sector.
“Our country must be the leader in the field, there is no second place,” he said at the time in a post on Truth Social, a social media platform owned by Trump Media and Technology Group.
Furthermore, he has recently announced that his presidential campaign would accept cryptocurrency donations.
The fundraising page, which allows eligible individuals to donate in crypto using Coinbase Commerce, displays logos for Bitcoin, Ethereum, Dogecoin, Shiba, XRP, USD Coin, SOL, and 0x (ZRX).
Earlier this month, Trump also made a promise to grant a presidential pardon to Ross Ulbricht, the founder of Silk Road, if he is re-elected in November’s election.
Voters Consider Candidates’ Stance on Crypto
As reported, a survey conducted by the Harris Poll has revealed that one in three voters in the US consider a candidate’s position on cryptocurrencies before making their voting decision.
Another survey conducted by leading crypto venture capital firm Paradigm reveals that Trump’s poll numbers for the 2024 US Presidential Election enjoy significant support from the crypto community.
The survey, which included 1,000 registered voters, found that 48% of crypto owners plan to vote for the former president, while 39% intend to vote for current U.S. President Joe Biden.
Likewise, a recent report from Coinbase claimed that California voters who own cryptocurrencies are expected to have a significant impact on the 2024 elections.
From June 6 to 9, more than 185 million people from the European Union’s 27 member states voted for candidates to serve a five-year term in a new European Parliament, the legislative branch of the political bloc.
This pivotal event will shape the political direction of the EU for five years, and crypto and blockchain are no exception.
The election results are mixed: The Christian Democrats won 10 seats, while the Social Democrats hung on, losing only four seats, and the pro-business (and pro-crypto) Renew Europe Group lost 23 seats.
The Greens also took a beating, losing 18 seats, while far-right parties made notable gains.
So, what plans do these parties have for the crypto and blockchain industries?
Cointelegraph reviewed the election manifestos of various parties and interviewed a number of members of the European Parliament about their plans for the future.
European People’s Party (EPP), or Christian Democrats — 186 seats (gained 10)
The EPP Group, the largest and one of the most influential political groups in the European Parliament, generally holds a cautious yet forward-looking stance on cryptocurrencies, the digital euro and blockchain technology.
The group recognizes the transformative potential of blockchain and digital currencies in enhancing financial services and economic efficiency. However, it emphasizes the need for robust regulatory frameworks to prevent misuse, ensure consumer protection and maintain financial stability.
MEP Stefan Berger, a member of the EPP Group who helped negotiate the EU’s major crypto regulation — Markets in Crypto-Assets (MiCA) — told Cointelegraph:
“Crypto assets are gaining importance and have their place as a complement to the traditional financial system. We see crypto assets as forward-looking technologies with diverse possibilities for consumers and businesses and support balanced regulation that allows room for further development and innovation.”
The EPP supports the current MiCA law but also sees the potential for future adjustments. Berger said, “MiCA creates trust in the industry, provides security for founders and offers the European Economic Area a significant competitive advantage. It is clear that in the future, we will also need a legal framework for NFTs that benefits consumers and the entire industry.”
The EPP supports a more relaxed tax policy for crypto. Berger said the party wants to “strengthen Europe as an innovation location and reject restricting the adoption of crypto assets through restrictive tax policies.”
The party is also keen to explore the potential of blockchain technology outside of crypto.
“Blockchain can bring efficiency gains in public administration processes and enable new applications. This strengthens citizens’ trust in the state and administration,” said Berger.
Progressive Alliance of Socialists and Democrats (S&D) — 135 seats (lost 4)
The S&D Group is cautiously optimistic about blockchain and cryptocurrencies. The group recognizes the potential benefits of these technologies in promoting financial inclusion and improving public services. However, its primary concern is the regulatory and social implications.
S&D calls for strict rules to prevent fraud, money laundering and tax evasion. It supports the idea of a digital euro, seeing it as a tool to increase the effectiveness of monetary policy and protect consumers.
Renew Europe — 79 seats won (lost 23)
Renew Europe, a centrist and liberal political group, has been a prominent voice in the European debate on crypto. The group held the rapporteurship for the report on digital finance, which the European Parliament approved in 2020.
Since then, Renew Europe has consistently called for a robust regulatory framework for crypto assets to ensure the EU is ready for structural digital transformations.
Renew Europe also champions a proactive, innovation-friendly approach to blockchain and digital assets. The party views blockchain technology as a key driver of transparency, efficiency and growth across various sectors.
The group supports developing and establishing a digital euro, which it sees as essential for maintaining the European Union’s competitiveness in the digital age. Renew Europe describes the digital euro as “an ambitious project that should preserve public money as a monetary anchor, strengthen Europe’s strategic autonomy in the payments sector and promote financial inclusion.”
Additionally, Renew Europe strongly advocates for a European digital identity. The party believes that a secure and universally recognized digital ID system will enhance trust in digital transactions, streamline administrative processes and improve access to public and private services.
European Conservatives and Reformists Group (ECR) — 73 seats (gained 4)
The ECR Group holds a pragmatic and cautious view on cryptocurrency, reflecting its broader conservative and reformist principles.
The group sees blockchain and cryptocurrencies as promising tools for economic growth and modernization. According to the ECR, these technologies could make Europe’s financial sector more competitive and efficient, benefiting businesses and consumers alike. It believes cryptocurrencies should be integrated into a diverse financial ecosystem and support the MiCA regulation
However, the ECR supports stringent Anti-Money Laundering measures to combat the misuse of cryptocurrencies. It also calls for robust cybersecurity measures to defend against hacking and other threats.
The ECR is skeptical about a digital euro, calling it “a solution looking for a problem” and attributing the popularity and rise of cryptocurrencies to what it describes as irresponsible monetary policy.
The group argues that existing solutions, such as instant payments, already offer the benefits touted by proponents of a digital euro without the associated risks or complications.
Identity and Democracy (ID) — 58 seats (gained 9)
While the ID Group, known for its populist and nationalist tendencies, does not have an official stance on digital currencies and blockchain, member parties such as Germany’s Alternative for Germany (AfD) have some thoughts, at least on a digital euro.
The AfD sees the euro as fundamentally flawed and unable to sustain a union of 20 diverse economies. The party thinks that euro bailouts, often at Germany’s expense, are further evidence of its structural inadequacy.
The AfD opposes the introduction of a digital euro by the European Central Bank. The party sees it as a threat to cash, which is essential to protecting individual freedom and privacy from government overreach and surveillance. The party advocates for the preservation of cash as a constitutional right, fearing that a digital euro could undermine this fundamental liberty.
In contrast, Marine Le Pen of France’s National Rally (also a member party of the ID Group) has softened her stance despite a history of skepticism toward cryptocurrencies.
After initially calling for a ban on Bitcoin in 2016, Le Pen now supports strict regulation rather than an outright endorsement of crypto or blockchain technology.
The Greens/EFA Group has no overarching policy on cryptocurrencies or blockchain.
Paul Butcher, an EFA policy adviser, explained to Cointelegraph: “As a European political party, we are an alliance of our member parties, which have different views on the subject or have not developed policies on the sector. As a result, we have not yet discussed this issue at our General Assemblies or at the EFA Congress, where our 2024 manifesto was developed.”
However, the EFA supports the principle of subsidiarity and the MiCA regulation. Butcher said the party welcomes MiCA “as a starting point for a European-wide regulatory framework on crypto assets, which by their nature cross borders and cannot be adequately regulated at the national or regional level alone.”
“However, when it comes to taxation and specific measures to promote the sector, we seek to safeguard the right of the member states and regions to legislate in these areas.”
The EFA also recognizes the potential of crypto assets to give individuals greater freedom and ownership over their financial affairs. Butcher added: “We support this competition in the traditional banking sector and would like to see it develop in line with appropriate regulations to ensure that investors are protected while still being able to choose self-custody if they so wish.”
The Greens/EFA Group takes a cautious and socially conscious stance on blockchain. It acknowledges its potential for enhancing transparency and sustainability in various sectors, such as supply chain management and energy.
However, it is wary of the environmental impact of certain cryptocurrencies, particularly those relying on energy-intensive consensus mechanisms, such as proof-of-work.
The Greens/EFA Group supports exploring a digital euro, provided it aligns with sustainability goals and contributes to social welfare.
The Left in the European Parliament (GUE/NGL) — 36 seats (lost 1)
The Left is critical of cryptocurrencies, expressing concerns over their potential to facilitate illicit activities and exacerbate economic inequality. It is wary of the speculative nature of cryptocurrencies and the risks they pose to financial stability.
According to the Left, “crypto assets are an ecological disaster.” The German Left party’s election manifesto calls for banning Bitcoin and crypto mining to save energy.
MEP Chris MacManus (Ireland) said he had “no interest in creating a market for or in fostering the use of crypto assets,” adding that “at their worst, they are pyramid schemes, or used by criminal gangs for money laundering, or defrauding working people, and they can waste huge amounts of energy for no purpose.”
“I see little or no social or economic benefit to these tools of speculation. I accept the reality that crypto assets exist, and short of banning them, they must be regulated.”
The Left supports a digital euro designed to enhance public control over the monetary system and promote economic justice. It advocates for strict regulatory measures to curb speculation, protect consumers and ensure digital financial innovations serve the broader public interest.
Non-Inscrits
Non-Inscrits are MEPs who do not belong to one of the recognized political groups listed above.
Volt Europa — 5 seats won (plans to join Renew in EU Parliament)
Volt Europe, a pro-European federalist party focused on innovation and digital rights, holds a progressive stance on cryptocurrencies.
It believes cryptocurrencies are significant within the traditional financial system and advocates for protecting users’ digital rights while ensuring compliance with financial regulations. Pauline Raabe, who handles public relations for Volt Europe, told Cointelegraph:
“Cryptocurrencies are already intertwined with the traditional financial system, as evidenced by the recent emergence of Bitcoin [exchange-traded funds]. As such, it is an asset class that is here to stay, and therefore, our main concern is its impact on society and the economy.”
Volt supports the introduction of a digital euro without limits and with remuneration to foster competition in the market for deposits and payment services. Its approach to regulation, including MiCA, emphasizes the need for clarity and consistency across the EU to avoid unnecessary red tape for investors and companies.
Regarding taxation, Volt proposes treating crypto investments like any other investments. It aims to harmonize European investment regulation to create an integrated market for financial investments. As part of this harmonization effort, the party supports the creation of mutual funds and exchange-traded funds with crypto assets.
Regarding blockchain technology, Volt sees its potential applications in digital identities, e-health and certificate diffusion. It advocates for further research and development to advance the cryptographic foundations of blockchains and support innovative firms exploring their real-world applications.
“Volt wants to triple the budget of the Horizon Europe program. To facilitate innovative startups, Volt strives to establish a full-scale European venture program and to support entrepreneurs in fitting into the regulatory framework of the EU by, for example, creating regulatory sandboxes.”
European Christian Political Movement (ECPM) — 4 seats won
According to Adriana Rus, the ECPM’s communications manager, the party generally supports technological progress as long as it “does not threaten human dignity and fundamental rights, such as the right to privacy and freedom of speech, and the environment is not harmed.”
Some ECPM members are particularly critical of initiatives like the European digital wallet and eID, believing they compromise privacy and anonymity. However, beyond these concerns, the ECPM has not established a detailed policy on cryptocurrencies.
Balancing innovation with regulatory oversight
The newly elected European Parliament will significantly influence the future of cryptocurrency and blockchain technology in the EU. Each political group has a different perspective: The EPP Group favors balanced regulation to support growth and innovation, while the S&D Group prioritizes strict rules to prevent misuse and supports the development of a digital euro. Renew Europe advocates for a proactive stance on digital assets, pushing for a digital euro and a European digital identity.
Given the Parliament’s diverse composition, debates and potential adjustments to frameworks like MiCA are expected. The presence of far-right and conservative parties adds complexity, with some skeptical of the digital euro and prioritizing stringent Anti-Money Laundering measures. Meanwhile, smaller groups like the Greens and the Left emphasize environmental concerns and social justice in digital finance.
Some euro zone banks have fallen short of the European Central Bank’s climate-related goals and may face fines, a senior ECB supervisor said in an interview published on Wednesday.
The ECB has handed banks a list of deadlines for factoring in risks relating to climate change, from floods and droughts to a transition to new energy sources, into the way they do business.
But some banks have fallen behind schedule, Kerstin af Jochnick, a member of the ECB’s Supervisory Board, told Spanish newspaper Cinco Dias.
“We have notified a few banks that, based on our current assessment, they have not met the interim milestones, which means they face the prospect of having to pay a so-called pecuniary penalty,” af Jochnick said.
International financial authorities must give consideration to legal risks surrounding the potential winding up of global banks, Swiss Finance Minister Karin Keller-Sutter was quoted as saying on Wednesday.
In an interview with the Frankfurter Allgemeine Zeitung newspaper, Keller-Sutter was asked whether rules to deal with banks deemed “too big to fail” need to be standardised internationally so that such lenders can be wound up.
Keller-Sutter said she was in contact about that with the Financial Stability Board, a body that monitors the global financial system, and other finance ministers, including Germany’s Christian Lindner, who she is meeting in Berlin.
“I’d like to raise awareness that winding up (a bank) may sometimes not be possible due to international legal risks. In the case of Credit Suisse, that was clearly a risk,” she said, referring to the Swiss bank that collapsed last year.
“There are considerable doubts that recapitalisation via compulsory participation of creditors, that is, a “bail-in”, would work,” Keller-Sutter said.
“I’m looking primarily at the United States. The big banks are heavily invested there. That’s why American supervisory authorities would have to agree to a winding up.”
Managing this risk is why the Swiss government wanted systemically relevant banks to back their foreign subsidiaries with up to 100% equity, she said.
“The equity backing of the foreign subsidiary must be so large that it can be sold or liquidated in a crisis without damaging the Swiss parent company. That was exactly the problem with Credit Suisse,” she said.
The demise of Credit Suisse roiled financial markets and led to its takeover by long-term rival UBS, prompting the Swiss government to set out its own measures for too big to fail entities in April.
UBS formally absorbed the parent company of Credit Suisse last week. Ratings agency S&P on Tuesday revised up UBS Group AG’s outlook to stable from negative, saying that “tail risks from the group’s integration and restructuring have eased”.
Bitcoin gained 2.5% on June 3 to $69,400, sparking hopes that it might reclaim the $69,000 support level for the first time in 11 days. This positive price movement coincided with a surge in the Bitcoin futures premium to its highest level in seven weeks. But what does this mean for the sustainability of Bitcoin’s rally toward $70,000?
GameStop mania and weaker odds of Fed’s interest rate cuts
Some analysts believe that Bitcoin’s recent price jump was partly influenced by GameStop’s (GME) impressive 36% rally. This surge in GameStop stock rekindled memories of the 2021 anti-traditional finance sentiment when retail investors banded together to challenge the status quo. This sentiment appears to have spilled over into the memecoin sector as Floki gained 16.5%, Dogwifhat (WIF) 9%, and Bonk rallied 7.5%.
Additionally, comments from the Federal Reserve Bank (Fed) of Minneapolis’s Neel Kashkari have added to the uncertainty. The Fed official stated that he doesn’t foresee a rate cut anytime soon, citing Americans’ strong aversion to inflation. This stance, although not universally shared among Fed officials, is seen as negative for the housing and stock markets. As a result, some investors are turning to alternative investments like Bitcoin.
Global geopolitical tensions have also played a role in Bitcoin’s recent price action. Australia’s decision to order Chinese investors to reduce their stakes in a rare earths miner has heightened uncertainty in global markets. This move coincided with a 1% gain in gold and a sell-off in U.S. Treasuries, with the 5-year yield dropping to 4.42% from 4.59% on May 31.
Bitcoin derivatives support further price gains
The Bitcoin futures premium reflects the difference between the monthly contracts derivatives markets and the spot level on regular exchanges. Usually, a 5% to 10% annualized premium (basis) occurs to compensate for the extended settlement. In essence, a higher premium suggests that traders are willing to pay more for future contracts, indicating bullish sentiment.
While the overall nonfungible token (NFT) space saw a 54% drop in sales in May, digital collectibles on Bitcoin reached a new milestone.
On June 4, NFT data tracker CryptoSlam showed that NFTs on the Bitcoin blockchain reached a total all-time sales volume of over $4 billion. The data combined the NFT sales, which were $3.97 billion, and the wash sales, which were $82 million.
In the last 30 days, Bitcoin-based NFTs recorded a sales volume of $171 million, taking the top spot in terms of sales volume by blockchain. The network was followed by Ethereum, which had $159 million and Solana, which recorded $90 million in the past month.
Bitcoin NFTs are still far from Ethereum
Even though Bitcoin-based NFTs are leading the charts in 30-day volumes, the network is only the fourth-largest blockchain in sales. It follows the Ronin blockchain, which holds the top three spot with $4.2 billion in all-time sales.
Solana-based NFTs hold the second place, with a $5.5 billion record for all-time sales. Meanwhile, the Ethereum network retains the top spot for NFT sales, with a whopping $43.8 billion in recorded sales.
Bitcoin NFTs also hit by market slump
The broader NFT market also saw lower sales volumes in May. On May 31, CryptoSlam showed a 54% decline in monthly NFT sales volume compared to April. In April, NFTs saw over $1 billion in sales, while May recorded a volume of $624 million.
The decline in sales volume also affected Bitcoin-based collectibles. The data showed that NFTs based on Bitcoin experienced a 68% decline in sales in May.
Bitcoin transaction value hits yearly high
Apart from Bitcoin NFTs recording a new all-time milestone for sales, the network also saw a new record in transaction value. On May 28, Bitcoin transactions reached an estimated value of over $25 billion, its highest in the last year.
Bitcoin explorer Blockchain.com showed that Bitcoin holders moved about 367,000 BTC on the blockchain on May 28. At the time, Bitcoin’s price hovered around $69,000, making the transactions worth $25.5 billion.
United States President Joe Biden has vetoed a resolution that would have overruled the U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121.
“This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices,” Biden wrote in an official response to Congress voting to repeal the cryptocurrency accounting guidelines, which requires institutions that custody crypto assets to record crypto holdings as liabilities on their balance sheets.
The guidelines were set to take effect on April 11 but were met with considerable backlash from the crypto community and lawmakers alike.
Lawmakers in the House of Representatives voted to repeal the SEC’s guidance by a margin of 228 to 182 and passed the bill to the Senate. Once there, senators voted to repeal SAB-121 by a significant margin of 60 to 38 in favor.
“We’re disappointed that the admin chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121,” crypto advocacy group the Blockchain Association declared in its X post.
U.S. Senator Cynthia Lummis argued that Biden went against the “will of the American people” by intervening and preventing the guidelines from being revoked.
Israel launches digital shekel experiment
Israel intends to expedite the development of its in-house central bank digital currency (CBDC), the digital shekel. The Bank of Israel (BoI) plans to involve various service providers in co-developing an advanced digital payments ecosystem centered on the digital shekel.
Project Rosalind is a joint experiment between the Bank for International Settlements (BIS) and the Bank of England. It aims to develop prototypes for an application programming interface (API).
As part of the challenge, the BoI will provide a sandbox environment attached to a layer of API. Participants will compete to build real-time CBDC payment systems for the general public.
Paraguay proceeds with crackdown on crypto mining
Property containing 2,738 crypto mining units was seized in Salto del Guairá, Paraguay after the National Electricity Administration (ANDE) detected an unmetered power connection in the area.
A bill to ban crypto mining and other crypto-related activities is before the country’s senate, pending comprehensive legislation and assurances from the national power supplier.
ANDE used artificial intelligence and power distribution analysis to zero in on the electricity theft, which it estimated was worth 1.1 billion guarani ($146,000) per month.
Five transformers were also seized on the property. The operators of the illegal operation may face criminal charges.
At least two other actions against illegal crypto farms — one in Salta del Guairá — were carried out in Paraguay in May, although those raids had much more modest results. All the government actions involved multiple agencies, including the National Police of Paraguay.
Hong Kong kicks out all unlicensed crypto exchanges
All cryptocurrency exchanges that have not applied for an operational license with the Securities and Futures Commission (SFC) of Hong Kong are legally required to cease operations in the region immediately.
In an effort to minimize risks for investors, Hong Kong regulators issued a clear ultimatum to cryptocurrency exchanges: either apply for a license by Feb. 29 or shut down their operations within three months.
During this period, more than 22 cryptocurrency exchanges applied for licenses to maintain their presence in the region. However, many of these exchanges ultimately decided to withdraw their applications just before the deadline.
While most exchanges did not provide any reasons for the surprise turn of events, Hong Hong-based Gate.HK cited the need for a “major overhaul” of its trading platform before it could comply with Hong Kong’s regulatory requirements.
The Qatar Central Bank (QCB) has completed the infrastructure for a central bank digital currency (CBDC) project and launched the first phase of an experimental project. The QCB will look at settlements of large payments among large local and international banks.
Few details of the project were released. The state news agency said it would focus on distributed ledger technology, artificial intelligence, enhancing liquidity and transactions with securities. The project will run through October.
The QCB began studying CBDC technology in March 2022 and confirmed that it was launching a project in June of that year. According to a press report, QCB governor Sheikh Bandar bin Mohamed bin Saoud al-Thani said at the Qatar Economic Forum in May, “We are in the foundation stage and evaluating the pros and cons of issuing the CBDC.”
Keeping up with the neighbors
The neighboring United Arab Emirates (UAE) was a founding member of the mBridge project, along with China, Hong Kong and Thailand. It has already used mBridge to transfer remittance payments to India and for wholesale transfers among the mBridge project members. The UAE also participated in a CBDC proof-of-concept, called Project Aber, with Saudi Arabia that ended in 2020.
A day before the announcement of the CBDC project, the QCB launched a new fintech sandbox. The Express Sandbox offers a “reduced testing period, rapid testing cycles, and a streamlined overall evaluation process” for eligible participants. Like the new sandbox, the CBDC project was described as part of official national development strategies, although none of the strategies mention CBDC explicitly.
Cryptocurrency frowned on
The Qatar Financial Centre Regulatory Authority — a business development jurisdiction in the country — banned virtual asset services from operating there in 2020. The Financial Action Task Force criticized Qatar in 2023 for not enforcing that ban and lacking an understanding of “more complex forms of money laundering and terrorist financing.”
Rumors circulated in the crypto community in March that the Qatar Investment Authority would invest heavily in Bitcoin, but there is doubt about the likelihood of that.
The International Monetary Fund now expects China’s economy to grow 5% this year, raising its forecast from 4.6% a few weeks ago to reflect a strong expansion at the start of 2024 and additional support from the government.
The Fund expects the momentum to continue, raising its gross domestic product forecast for next year to 4.5% from 4.1%, according to a press release published Wednesday. China is targeting growth of around 5% this year. In the first quarter it reported a better-than-expected expansion of 5.3%, although a drawn-out slump in housing continues to weigh on domestic demand.
The Fund expects the momentum to continue, raising its gross domestic product forecast for next year to 4.5% from 4.1%, according to a press release published Wednesday. China is targeting growth of around 5% this year. In the first quarter it reported a better-than-expected expansion of 5.3%, although a drawn-out slump in housing continues to weigh on domestic demand.
“We certainly are seeing that consumption is recovering but it has some ways to go,” the Fund’s First Deputy Managing Director Gita Gopinath said in an interview with Bloomberg News earlier this week. “The strength we’re seeing in public investment remains. Private investment is still weak, mainly because of the weakness in the property sector.”
The IMF has called on Beijing to provide more monetary and fiscal support for the economy, including further steps to resolve the housing crisis, which has persisted despite repeated efforts by authorities to put a floor under prices and boost demand.
In the IMF’s Wednesday statement, Gopinath said the priority should be to “mobilize central government resources to protect buyers of pre-sold unfinished homes and accelerate the completion of unfinished pre-sold housing, paving the way for resolving insolvent developers.”
Earlier this month Chinese officials announced a new effort to shore up real estate markets, easing down-payment requirements for buyers and providiing 300 billion ($42 billion) of central bank funding to help local governments purchase excess inventory from developers.
Gopinath said more is needed. “Fiscal policy should prioritize providing one-off central government financial support for the real estate sector,” she said in the statement, while low inflation means there’s also room for further monetary easing.
BTC price action shows sensitivity to Mt. Gox events, leaving $69,000 unclaimed as new support — to the frustration of Bitcoin bulls.
saw four-day lows into the May 28 Wall Street open after holiday BTC price action deceived bulls.
Bitcoin wobbles on Mt. Gox fund movements
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering below $68,000 after spiking to weekly highs.
The trip to $70,600 during the Memorial Day holiday in the United States came without institutional involvement, for example in the form of demand for the spot Bitcoin exchange-traded funds (ETFs).
Despite rapidly gaining momentum, Bitcoin’s latest rally failed to endure for long before the market retraced all of its progress.
The volatility came amid new movement of BTC worth $7 billion from wallets linked to defunct exchange Mt. Gox.
“And there is a full retrace of that recent pump as expected,” popular trader Credible Crypto wrote in part of his ongoing commentary on X (formerly Twitter).
“Let’s see what kind of reaction we get here at the lows.”
The latest data from monitoring resource CoinGlass highlighted liquidity concentrations around spot price, with the area around $67,000 now the nearest point of interest below.
Responding to the past 24 hours’ moves, fellow trader Daan Crypto Trades revealed a positive impact on market structure — a removal of leverage.
“All positions entered during yesterday’s move were flushed out and the funding rate is back to neutral,” he wrote on X alongside a chart of open interest data.
“ETH is a bit stronger still but as long as BTC is within its bigger range we’ll keep seeing more of this low timeframe chop.”
BTC price performance thus continued to hinge on overcoming key resistance and flipping it to support.
Bullish BTC price visions unfazed
As Cointelegraph reported, the greatest challenge remains the 2021 all-time highs of $69,000 and the subsequent trip to $73,800 this year.
Zooming out, popular trader Jelle revealed a mere consolidatory structure on monthly timeframes despite the lack of upward momentum since March.
In a further post, he considered a broader BTC price range in place all the way since mid-2017 — when BTC/USD hit historical all-time highs of $20,000 two cycles ago.
“Bitcoin has spent the past 6.5 years inside this rising channel, and I don’t expect that to change anytime soon,” he confirmed.
“If history is any indication, it’s time for another trip towards the highs of the channel. 6-figure Bitcoin is coming.”
A distributed denial-of-service (DDoS) attack attempts to take down a website, computer or online service by flooding it with requests, depleting its capacity and affecting its ability to respond to valid requests.
A DDoS attack involves hackers inserting malware into possibly thousands of internet-enabled devices, collectively referred to as a botnet, and prompting them to deliver a deluge of requests to the target system simultaneously. These compromised machines, individually termed bots or zombies, could be cellphones, desktops, servers or even Internet of Things (IoT) devices. Attackers usually establish direct control over bots by infecting them with malware without the knowledge of the victims.
The influx of incoming traffic overwhelms the target system’s ability to respond to valid requests because the attack consumes too much bandwidth, processing power or memory. In its Q1 2024 DDoS threat report, Cloudflare noted an alarming 50% rise in DDoS attacks in general.
Is a DDoS attack possible on a blockchain network?
Attacking a blockchain network with a DDoS attack is theoretically feasible, though it is more difficult than targeting centralized systems like websites or servers. Blockchain networks are inherently resistant to such attacks thanks to their decentralization.
A blockchain operates as a decentralized distributed ledger, functioning across an array of nodes, which are responsible for validating and processing transactions and creating blocks. Unlike traditional systems, there is no central point of control within a blockchain network. Decentralization makes a blockchain network harder to attack as attackers need to deal with a multitude of nodes.
One way to disrupt the network is by flooding the blockchain with spam transactions, which overwhelms the network and slows down transaction throughput, hindering the timely validation of legitimate transactions. This queues up transactions from genuine users in the mempool, a mechanism in blockchain nodes that stores unconfirmed transactions.
A well-known instance of a DDoS attack was one on the Solana blockchain network, which lead to a 17-hour downtime in September 2021. During Grape Protocol’s initial decentralized exchange offering (IDO) on the Solana-based DEX Raydium, bots bombarded the network with 400,000 transaction loads per second, causing network congestion.
Moreover, DDoS attacks may target decentralized applications (DApps), which are applications built on top of the blockchain, rather than the blockchain network itself. Cryptocurrency exchanges, which play a key role in ensuring liquidity in a blockchain-based ecosystem, frequently fall victim to DDoS attacks, resulting in temporary service outages.
How can DDoS attacks affect blockchain networks?
DDoS attacks can affect blockchain networks via transaction flooding and compromising smart contracts. The objective is to clog the network with fraudulent transactions, slowing it down and, in worse cases, bringing it to a halt.
Transaction flooding
Malicious actors can intentionally overload a blockchain network with a voluminous number of transactions, disrupting its normal operations. The attackers would stir up a volley of transaction requests, usually using automated scripts or specialized software. These transactions resemble legitimate transactions but are designed to squeeze the network.
The attackers broadcast these transactions to the nodes. To achieve consensus, the network propagates the transactions across multiple nodes, which work to process these transactions. However, the sheer volume of incoming transactions overwhelms their processing capacity. The network becomes congested and even genuine transactions get stuck in the backlog. The disruption could affect businesses, exchanges and other services reliant on the blockchain network.
Smart contracts
Hackers can identify vulnerable smart contracts in a blockchain network and flood them with transaction requests. These transactions contain fraudulent instructions or excessive computations to exhaust the functionality of the contract and the underlying network. The execution of code in the smart contract becomes increasingly burdensome, leading to inordinate delays in transaction validation.
As smart contracts are a key part of blockchains, the impact of such an attack may propagate across the network, affecting other smart contracts and transactions, disrupting critical operations and rendering services inaccessible to legitimate users.
Software crashes
Core application software in blockchains has built-in limits regarding the memory allocated and the number of transactions it can process in a block and store in the mempool. When there is a surge in transactions, the software might behave unexpectedly or simply crash.
Moreover, immutability is an inherent characteristic of blockchain transactions, which means they simply cannot be altered once they are recorded in blocks. This mechanism creates a problem when transactions flood the network during an attack. The network gets overloaded with useless transactions, which might be much beyond the software’s ability to handle.
Node failure
Nodes, acting as validators or miners, run the core blockchain software on equipment robust enough to handle the rigorous demand. When malicious actors stream in loads of junk data in a DDoS attack, a node might run out of memory or processing power and crash. A node’s failure due to an attack will increase pressure on the other nodes in the network.
Blockchain networks are essentially an amalgamation of nodes where each receiving node keeps track of the state of the blockchain and broadcasts information regarding transactions to other nodes. Flooding of fraudulent transactions affects the node architecture deleteriously, slowing down the whole network or even pulling it down.
How DDoS attacks affect crypto exchanges
Crypto exchanges are an indispensable part of the blockchain ecosystem, as they make digital assets liquid. They are often the target of the attackers.
When attacking exchanges, the modus operandi of attackers is to exploit vulnerabilities, such as outdated security patches in exchange infrastructure, disrupt operations, extort ransom, or manipulate markets. According to Cloudflare, a major chunk of DDoS attacks on crypto exchanges stemmed from simple service discovery protocol (SSDP) amplification attacks, network time protocol (NTP) amplification attacks and application layer attacks.
An SSDP attack is a reflection-based DDoS attack that exploits universal plug-and-play (UPnP) networking protocols to dispatch a huge amount of traffic to the target system. An NTP attack refers to a technique where the attacker sends a series of small queries that trigger large responses from different bots, multiplying the traffic. An application layer attack refers to an attacker methodology that targets the top layer in the open systems interconnection (OSI) model.
How to prevent DDoS attacks on blockchain networks
To protect blockchain networks from DDoS attacks, security measures are required at the node and network levels. Regular audits take care of vulnerabilities, while redundant infrastructure and stress testing keep the network functioning even during an attack.
Node-level security measures
Nodes should have adequate storage, processing power and network bandwidth to be resilient against DDoS attacks. Strong authentication methods and access controls help to protect network nodes. A completely automated public Turing test to tell computers and humans apart (CAPTCHA) is quite useful in ensuring only legitimate users are able to send transaction requests and prevents bots from infiltrating the network. Load balancing helps in dividing traffic and lessening the effect of node-level attacks.
Network level protection
Putting in place adequate defense mechanisms at the network level is important to safeguard a blockchain network. To identify and reduce the impact of DDoS attacks, firewalls and intrusion detection/prevention systems (IDS/IPS) serve well. Content delivery networks (CDNs) are also helpful in dispersing and absorbing attack traffic.
Audits
To find and fix any vulnerabilities, a thorough audit of various aspects of the blockchain is important. This should include analyzing smart contracts, auditing the integrity of the blockchain’s data structure and validating consensus algorithms. Fault tolerance in consensus mechanisms should be strong enough to resist attacks. Updating the code regularly is important to keep attackers at bay and improve security.
Stress testing
Networks and systems should perform stress tests on blockchain protocols at regular intervals to evaluate their ability to withstand DDoS attacks. This will facilitate the detection of potential vulnerabilities in time, enabling patching of the network infrastructure and upgrading of defense mechanisms.
Redundancy and backup
Blockchain protocols and DApps need to have redundant network infrastructure and backup servers to ensure that the system keeps functioning even when under attack. Nodes located across multiple geographical locations can hold out against a DDoS attack that is limited to a specific region.
Central banks are increasingly adopting generative AI for cybersecurity, with a BIS report indicating that 71% are already using it and more planning to follow.
The Bank for International Settlements (BIS) believes in the potential for widespread adoption of generative artificial intelligence (AI), an area in which many central banks have developed a strong interest.
The BIS, an international financial institution comprising 63 central banks and monetary authorities, surveyed 32 of its central bank members to assess their interest in adopting generative AI tools for cybersecurity. The report found:
“Over two-thirds (71%) of respondents are already using gen AI, and 26% have plans to incorporate such tools into their operations within the next one to two years.”
The BIS predicts all of its members will adopt generative AI to enhance their internal cybersecurity measures. Central banks that have already implemented generative AI have praised its effectiveness in detecting cyber threats compared to traditional tools.
Moreover, generative AI tools have accelerated banks’ response times to cyberattacks and aided in the detection of suspicious trends and anomalies. However, the most common concern for central banks remains the costs associated with implementing generative AI tools.
Additionally, the BIS report highlighted:
“Risks related to social engineering and zero-day attacks as well as unauthorized data disclosure are of highest concern.”
Central banks unanimously believe that generative AI tools can eventually replace cybersecurity staff for conducting routine tasks. BIS anticipates this move to “free up resources” that could be reallocated for other initiatives.
BIS members include the central banks of prominent economies such as Australia, China, France, Belgium, Japan, South Korea, Italy, Switzerland, the United Kingdom, and India, among others.
The BIS recently teamed up with seven central banks to explore asset tokenization within the monetary system alongside private financial institutions.
France, Japan, South Korea, Mexico, Switzerland, the United Kingdom and the United States Federal Reserve Banks are among the participating countries.
Dubbed “Project Agora,” the initiative will build on a unified ledger concept proposed by BIS that bridges tokenized commercial bank deposits and tokenized wholesale central bank money.
Former United States President Donald Trump’s on-chain crypto asset holdings briefly surpassed $10 million on Monday, primarily driven by his largest tokenholding, TRUMP.
On May 27, blockchain intelligence firm Arkham reported that presidential candidate Donald Trump’s crypto asset portfolio topped $10 million.
The surge to a seven-figure portfolio was catalyzed by the MAGA memecoin, TRUMP, which surged to an all-time high of $13.24 on May 27.
According to Arkham, Donald Trump holds 579,290 TRUMP tokens, currency worth around $6.79 million.
The memecoin has surged 53% over the past week following Donald Trump’s crypto endorsements.
“I am very positive and open-minded to cryptocurrency companies, and all things related to this new and burgeoning industry,” he said on May 25.
On May 21, the Trump 2024 campaign launched a fundraising page for people to donate in crypto.
However, TRUMP prices have declined 8.8% since that peak in a fall to $12.04 at the time of writing, according to CoinGecko.
This has caused the entire portfolio to retreat to $9.5 million as crypto markets declined during early trading on May 28.
MAGA was launched in August to donate to U.S. veterans and protect children. While it bears the former president’s name, it is not officially affiliated with or endorsed by Donald Trump.
According to the official website 234.75 ETH has been donated to United States veterans and 204.5 ETH to child trafficking prevention since MAGA launched.
Donald Trump also has a big Ether bag with 464.2 ETH worth around $1.79 million at the time of writing.
He also holds a million MVP tokens worth around $473,000. MVP is another memecoin offering rewards and supporting donations to the Trump election campaign. It hit an all-time high of $0.709 on May 17 but has fallen back 33% since then to trade at $0.477 at the time of writing.
One in three voters in the United States considers a candidate’s position on cryptocurrencies before making their voting decision.
According to a recent online survey conducted by the Harris Poll, 77% of respondents believe that a U.S. presidential candidate should possess at least an “informed perspective” on cryptocurrencies.
The poll, which surveyed likely U.S. voters, was funded by Grayscale, a Bitcoin ETF issuer, and involved over 1,700 participants.
Interestingly, the survey highlighted that voters are equally divided on which political party takes the lead on digital asset issues.
Crypto Finds Increased Political Attention
This recent poll builds upon a previous round of questioning conducted late last year, which indicated that an increasing number of people anticipate cryptocurrency becoming a part of their investment portfolios (47%).
The growing interest in cryptocurrencies could explain the heightened political attention the topic is receiving.
Zach Pandl, Head of Research at Grayscale, said that likely American voters, regardless of their political affiliation, demonstrate a heightened interest in investing in crypto assets and supporting candidates who are well-versed in emerging technologies.
The survey revealed that the majority of respondents (98%) had heard of Bitcoin, indicating its widespread recognition.
Additionally, a significant segment of voters claimed to be familiar with Ethereum’s ether (ETH), with only 46% stating that they had never heard of it.
Moreover, around 17% of voters reported having invested in Bitcoin, placing it on par with bonds as an investment option and surpassing investments in exchange-traded funds (ETFs).
Furthermore, 44% of voters expressed their belief, to varying degrees, that “crypto and blockchain technology are the future of finance,” marking a four-percentage-point increase from responses to the same question asked the previous year.
However, respondents also indicated a desire for government oversight, with 52% stating that they would be more likely to invest in digital assets if the field were subject to more regulations.
Fed Survey Finds 7% of US Adults Using Crypto
The number of United States adults reporting crypto ownership or usage has seen a significant decline, according to the latest annual household survey conducted by the Fed.
The survey, known as the Survey of Household Economics and Decisionmaking (SHED), indicates that approximately 18 million US adults reported using cryptocurrencies in 2023, representing a drop from previous years.
In the 12-month period leading up to October 2023, the survey found that 7% of the surveyed US adults reported using cryptocurrencies, down from 10% in 2022 and 12% in 2021.
These findings from the Federal Reserve survey significantly differ from Coinbase’s claim that 52 million Americans own cryptocurrencies.
Furthermore, another survey conducted by The Harris Poll in December last year revealed that approximately 73% of US voters believe that US presidential candidates should have an informed perspective on innovative technologies like artificial intelligence (AI) and cryptocurrency.
Likewise, a recent report from Coinbase claimed that California voters who own cryptocurrencies are expected to have a significant impact on the 2024 elections.
The White House believes the U.S. Federal Deposit Insurance Corp needs a “fresh start” with a new chair who is not part of the leadership that presided over its long-running cultural problems, a White House official told Reuters on Tuesday.
FDIC Chair Martin Gruenberg finally succumbed on Monday to a months-long scandal over sexual harassment at the agency, announcing that he would step down once the Senate has confirmed a successor, in a move that could kill bank capital hikes and other major Wall Street bank rules sought by Democrats.
Washington insiders and analysts said the White House is under pressure to quickly fill the role and preserve Democratic President Joe Biden’s financial regulation agenda just six months ahead of the U.S. presidential election.
They expect the White House would seek a female nominee already in government who would be better placed to overhaul the agency’s toxic culture and get through the nomination process faster.
“Assuming that the White House were to announce a nominee tomorrow to replace Mr. Gruenberg, the best it could hope for is a vote on the Senate floor in September,” Stifel Chief Washington Policy Strategist Brian Gardner wrote on Tuesday.
The administration is “very conscious” of the tight Senate calendar and wants to put a nominee in front of the Senate Banking Committee as soon as possible, said the official who spoke on the condition of anonymity.
Gruenberg, a Democrat, had clung to his job since the scandal erupted in November, despite many lawmakers demanding he step down. A Monday statement by top Democrat and Senate Banking Chair Sherrod Brown calling for fresh leadership appeared to tip the balance.
A top bank regulator, the FDIC faces a critical moment as regional banks remain under stress following last year’s turmoil, and as it finalizes capital hikes and other major new rules for Wall Street banks.
Under the law, the only way for the administration to replace Gruenberg without handing control of the agency to Republicans is to have the Senate, which Democrats control by one vote, confirm their new pick. But many Washington analysts believe Gruenberg may struggle to hold onto his job much longer, as Republicans continue to pile pressure on Biden to fire him.
A damning independent review this month found widespread misconduct at the FDIC went unaddressed for years, and cited instances in which Gruenberg – who has spent nearly two decades in leadership at the agency – lost his temper with subordinates.
The agency’s deep-seated problems, combined with the uncertainty created by the election, may put off the relatively small pool of viable candidates, said analysts.
“I don’t know who they’re going to find who can get the number of votes quickly and even if they find the perfect person, I wonder if that perfect person would be interested,” said Isaac Boltansky, director of policy research for brokerage BTIG.
POSSIBLE CONTENDERS
Among the candidates who could fit the bill is Christy Goldsmith Romero, a Democratic member of the Commodity Futures Trading Commission (CFTC), said one regulatory and one industry source.
Goldsmith Romero, who declined to comment, is in the process of being re-nominated to the CFTC role, meaning the White House could switch her nomination to FDIC chair quickly, one said.
Treasury Undersecretary for Domestic Finance and former top Federal Reserve official Nellie Liang would also be a strong candidate, having already been Senate confirmed, one of the people said.
While New York State Department of Financial Services Superintendent Adrienne Harris is not Senate-confirmed, she was in contention for Gruenberg’s job back in 2022 and could also be a potentially strong candidate, said two other people.
Spokespeople for Liang and Harris declined or did not respond to a request for comment.
Gruenberg, 71, had been at the FDIC since 2005 and is the longest-serving FDIC board member in the agency’s 89-year history. During that time he served as its chair twice – once under President Barack Obama and the second time under Biden.
While Gruenberg was not found to be directly responsible for the agency’s broad cultural issues, he apologized for misconduct under his leadership and for his own transgressions.
Should he leave the agency without a confirmed replacement, its leadership would fall to Travis Hill, the agency’s vice chair and a Republican who has voted against some of the proposed new rules. The agency would then be deadlocked 2-2.
That could delay indefinitely the Basel capital hikes, and other major draft rules the agency is working on with fellow regulators; those include requirements for some lenders to hold more long-term debt to boost their resilience; restrictions on banker executive pay; and changes to bank merger policies.
White House press secretary Karine Jean-Pierre told reporters on Tuesday that the president “is taking this very seriously.”
U.S. Treasury Secretary Janet Yellen urged German bank executives on Tuesday to step up efforts to comply with sanctions against Russia and shut down efforts to circumvent them to avoid potential penalties themselves that would cut off dollar access.
Yellen said at the start of a meeting with bankers that the Treasury’s new authority to hit banks with secondary sanctions if they aid Russian military-related transactions had helped to frustrate Russia’s efforts to procure goods needed for its war in Ukraine, but more work was needed.
“Russia continues to procure sensitive goods and to expand its ability to domestically manufacture these goods. We must remain vigilant and be more ambitious,” Yellen said.
“I urge all institutions here to take heightened compliance measures and to increase your focus on Russian evasion attempts,” Yellen said in prepared remarks for the meeting in Frankfurt.
In an unusually direct warning, she told the executives to police sanctions compliance among their banks’ foreign branches and subsidiaries and reach out to foreign correspondent banking customers to do the same, especially in high-risk jurisdictions.
“Russia is desperate to obtain critical goods from advanced economies like Germany and the United States,” Yellen said. “We must remain vigilant to prevent the Kremlin’s ability to supply its defense industrial base, and to access our financial systems to do so.”
She later cautioned, however, that the Treasury will be “judicious” in applying any secondary sanction on banks and that the executives she had met on Tuesday had expressed a “very strong commitment” to doing their part.
RAIFFEISEN WARNING
Yellen’s warning comes shortly after the U.S. Treasury successfully pressed Austria’s Raiffeisen Bank, the biggest Western bank in Russia, to ditch a deal involving a Russian tycoon.
Earlier this month, Raiffeisen Bank International (RBI) (RBIV.VI), opens new tab dropped a bid for a 1.5 billion euro ($1.6 billion) industrial stake linked to Russian tycoon Oleg Deripaska after intense U.S. pressure.
The deal’s collapse was a fresh setback for the lender, which faces criticism for its ties to Moscow more than two years since Russia’s invasion of Ukraine. The pressure also underscored Washington’s willingness to take European banks to task over their Russia ties.
Raiffeisen was warned by the U.S. Treasury in writing that its access to the U.S. financial system could be curbed because of its Russia dealings, a person who has seen this correspondence told Reuters.
On May 6, Deputy Treasury Secretary Wally Adeyemo sent a letter to RBI, expressing concern about RBI’s presence in Russia as well as a $1.5 billion deal.
RBI’s announcement followed weeks of pressure over its plan to buy a stake in construction group Strabag, a move designed to unlock bank funds frozen in Russia.
MEANINGFUL CONSTRAINTS
And a senior U.S. Treasury official acknowledged that Western banks face “meaningful constraints” in exiting Russia, but they should not be seeking to expand their Russian businesses as Raiffeisen has.
The official added that Austrian regulators should take a more aggressive posture to avoid reputational risks for a systemic institution.
“The mere fact of the secondary sanctions existing already gets us to our goals in some ways,” the official said on condition of anonymity.
Spokespersons for Germany’s two largest banks, Deutsche Bank and Commerzbank, both said they had significantly reduced their business in Russia and were complying with the sanctions.
Yellen said the most concerning Russian sanctions evasion activity was coming through China, the United Arab Emirates and Turkey. She added that the Treasury “is working to disrupt evasion wherever we see it, from Central Asia to the Caucasus and throughout Europe.”
Yellen, who also gave remarks on the U.S.-European alliance in Frankfurt before attending a meeting of G7 finance ministers in Italy this week, said she sees the global economy outperforming expectations with risks broadly balanced and financial conditions easing since last year’s banking turmoil.
“We also remain vigilant to potential vulnerabilities, including elevated levels of corporate debt, leverage and liquidity mismatches in the non-bank sector, and strains in commercial real estate markets,” Yellen added.
Bitcoin price rallied to the coveted $70,000 mark amid a noticeable surge in spot buying and spot BTC exchange-traded fund (ETF) purchasing, with the cryptocurrency community pondering whether the bull market is just beginning or nearing its peak.
Bitcoin charts and spot ETF activity highlight the trend reversal
Analyst “ELI5 of TLDR” suggested that the majority of on-chain indicators point to a nascent bull market, despite some showing topping patterns. The recent support bounce near $60,000 has sparked increased interest, with Farside Investors reporting approximately $950 million in inflows last week, a figure not seen since March.
Should this trend continue, BTC could potentially exceed expectations. Currently, BTC is trading within a few hundred dollars of $70,000, with the 20-day EMA at $64,371 and a positive RSI indicating that an upward breakout is more likely. Overcoming the $68,000 resistance suggests that BTC price is on the path to $73,777, though this level may trigger a strong bearish response.
Conversely, a break below the moving averages could signal a bearish downturn, with potential drops to $59,600 and $56,552.
Changing U.S. monetary policy buoys Bitcoin price
In the broader economic context, Bitcoin’s 51% year-to-date gain is reflective of investors’ anticipation of U.S. monetary expansion, which saw the M2 monetary base surpass $21.0 trillion in April 2024.
This increase in circulating money hints at rising inflationary pressures despite a period of spending hesitancy by companies and individuals. The United States Federal Reserve’s strategies to manage inflation and avoid a recession could impact the liquidity and, consequently, the attractiveness of scarce assets like Bitcoin.
Exchange reserves hit seven-year low as Bitcoin nears all-time high
Adding to the bullish sentiment, exchange BTC reserves have plummeted to a seven-year low, with CryptoQuant data showing only 1,918,417 BTC available on major trading platforms as of May 19, a significant decrease from the previous year.
This scarcity, coupled with the recent halving event that has halved the potential new supply from miners, makes a bearish stance on Bitcoin increasingly difficult to justify.
Bitcoin has achieved all-time highs against local currencies in several countries across Asia and South America, following a significant 7% surge in its price.
On May 21, Bitcoin reached an intraday and six-week high of $71,650, marking a gain of over 7% within a 24-hour period.
According to CoinGecko, this puts the asset within a 3.4% range of its all-time high in USD terms, recorded on March 14, at $73,738.
Bitcoin Sets New Highs Against Various Fiat Currencies
The surge in Bitcoin’s price has resulted in new record highs against various fiat currencies.
In Japan, BTC hit an all-time high of 11.2 million yen during early trading on May 21.
This marks the first time that the asset has surpassed the 11 million JPY threshold.
The Japanese yen has experienced a weakening trend against the U.S. dollar in recent months, depreciating by 10% since the beginning of the year.
Argentina also witnessed Bitcoin reaching a peak value of 63.8 million Argentine pesos (ARS) on May 21, slightly surpassing the highs seen in mid-March.
The country has been grappling with high inflation, currently standing at a staggering 290%, along with currency devaluation over the past couple of years.
In the Philippines, Bitcoin briefly reached a record high of 4.18 million pesos (PHP) on May 21, surpassing the mid-March highs.
Similar trends were observed in other countries such as Britain, Australia, Canada, Chile, Colombia, Egypt, Norway, India, South Korea, Taiwan, and Turkey, as noted by industry observer Thomas Fahrer on X.
Bitcoin Short Squeeze on the Horizon?
In a recent post on X, crypto analyst Willy Woo highlighted the liquidation of a month’s worth of Bitcoin short positions, suggesting the possibility of a short-squeeze beyond the all-time highs.
Coinglass reported that within the past 24 hours, 79,010 traders were liquidated, with total crypto liquidations amounting to $345 million, of which 78.5% were short positions.
As reported, Markus Thielen, the head of research at 10x Research, previously predicted that a breakthrough above $67,500 could potentially lead to new all-time highs.
Currently, BTC is trading at $70,945, just $2,500 away from reaching a new all-time high in U.S. dollars.
Aside from 10x Research, some other analysts have also turned bullish on Bitcoin following weeks-long consolidation.
Leading trading firm QCP Capital has expressed optimism about Bitcoin’s price momentum, forecasting a potential return to the highs of $74,000.
In a recent note, the firm said it has observed substantial buyers acquiring 100,000 to 120,000 BTC Calls for December 2024, indicating confidence in the upward movement of the cryptocurrency.
“US CPI numbers triggered a break out of the range across risk assets. BTC has since traded back above 66k,” the firm wrote.
Brazil’s central bank unveiled a multi-phase plan to regulate crypto and virtual asset service providers on Monday. It aims to finalize the regulatory proposals by the end of this year.
These regulations will establish rules that verify and enforce greater transparency around the potential benefits and risks of these investments, the bank said. It said it opted for a phased approach to effectively regulate the country’s cryptocurrency service market.
“From this point on, the contributions will be used and the regulatory proposals will be finalized at the end of 2024,” the bank added.
The central bank’s latest decision pushes back the finalization of the process, according to Reuters. It follows a 2022 law that gave the bank the authority to develop these regulations.
During a congressional hearing last year, the central bank’s director of regulation, Otavio Damaso, anticipated completing the crypto regulations by June 2024.
The bank conducted a public consultation on the matter in Dec. 2023, which wrapped up in January. Following this, it announced a new public consultation scheduled for the second half of this year.
The central bank told Reuters that the first consultation aimed to collect feedback from the public on the proposed regulations. It also addressed aspects not covered by the 2022 law, such as how virtual asset service providers should segregate their assets.
To address this, it explained that the first public consultation required “reasonable dedication from the teams involved.”
The bank is also moving forward with regulating stablecoins, particularly those used for payments and foreign exchange.
Brazil Blocks Crypto Donations in Elections
In a move to crack down on cryptocurrencies in campaign finance, Brazilian authorities solidified a ban on crypto donations to political parties and candidates last week.
The electoral court defended its ban, emphasizing the need for transparency and traceability in campaign financing. It stated its commitment to protecting elections “from irregular or illicit practices.”
The Russian crypto mining industry could grow “by between 20% and 40%” in 2024, a new report has claimed.
Per the media outlet Overclockers, the claims came from industry insiders in a report from BitRiver.
The latter is Russia’s biggest crypto mining player. The firm is one of the driving forces behind a recent legislative push that could result in the “legalization” of the sector.
Russian Crypto Mining Industry ‘Continues to Grow’
In the report, analysts claimed that the “low cost of electricity” and “the absence of strict regulation by the authorities” were resulting in “good growth dynamics” for crypto miners.
The report’s authors quoted the director of the Industrial Mining Association, Sergei Bezdelov, as stating that the industrial crypto mining market “doubled in size” in 2023.
BitRiver claims that last year domestic Bitcoin miners accrued a combined total of about BTC 54,000.
The firm said that Russia “continues” to be one of the world’s biggest crypto mining powers.
BitRiver also claimed that “over 95%” of Russian miners’ “computing resources” are being used to mine BTC.
However, not all experts agree on this statistic. The Co-founder of the Encry Foundation, Roman Nekrasov, said he believed BTC accounted for 90% of Russian mining efforts.
He said 10% of Russian miners focus on altcoins like Litecoin (LTC) and Kaspa (KAS).
Market Still Largely Unregulated
At present, mining has no legal status in Russia. However, many in Moscow have proposed banning crypto in various forms.
Miners want lawmakers to “hurry up and legalize” their sector, even if that means paying taxes on their earnings.
The Energy Ministry has suggested easing the load on overworked grids by forcing miners to turn off their rigs for a fixed amount of time every year.
The latest legislative proposals reportedly either suggest restricting private mining or allowing energy providers to fine suspected “home” crypto miners.
Low Power Costs Spark More Growth Potential
Legal experts weighed in. They told the report’s authors that legal provisions for crypto and crypto mining already exist in Russia.
Elizaveta Vikhlyantseva, a lawyer at the law firm Vegas Lex, noted that there was nothing in Russian law that “prohibited” the construction of “crypto mining farms.”
Meanwhile, Yaroslav Shitsla, the head of the IT and IP dispute resolution department at the law firm Rustam Kurmaev and Partners, said that “cryptocurrency has already been recognized as property.”
Shitsla pointed to the law “On Digital Financial Assets” as evidence for this claim. And while this may be true, critics have called this law “lacking in substance.”
The Financial Action Task Force (FATF) appears to agree. It has downgraded Russia’s compliance rating accordingly.
Regardless, experts struck an upbeat note. Nikita Vassev, the founder of Terracrypto, claimed that the rapid growth of mining in Russia was due to the low cost of electricity.
Vassev added that Russia’s “climatic conditions” were also favorable for miners.
The expert notes that “the majority of miners choose to operate in Siberia because of the opportunity to save on cooling costs.”
Experts added that there were “many production sites” in the country that could “easily be repurposed for Bitcoin mining.”
Most agreed that the “lack of strict control by local regulators” creates “positive conditions for cryptocurrency-related business.”
The American Bankers Association (ABA) on Monday urged House leaders to back a bill that would stop the Federal Reserve from creating a CBDC for individuals and using it for monetary policy tools.
Congressman Tom Emmer (R-Minn.) introduced the CBDC Anti-Surveillance State Act (H.R. 5403) in Sept. 2023. The bill, which has gained support from 165 cosponsors, is expected to be voted on this week.
“ABA believes strongly that a CBDC, defined as a digital form of central bank money that is widely available to the general public, is unnecessary in the United States and would present unacceptable risks and costs to the financial system,” the association said in the letter to Speaker Mike Johnson and Minority Leader Hakeem Jeffries.
“The dollar is already digital today, and it is unclear how issuing a CBDC would improve financial inclusion or achieve other laudable goals,” it added.
Fed Studying CBDC Despite Reservations from Top Officials
The ABA’s letter also warned that a CBDC would disrupt the current financial system in several ways. It could fundamentally alter the relationship between citizens and the Federal Reserve, weaken the role of banks, worsen economic downturns, and make it harder for the Fed to manage the economy effectively, the letter said.
While the US hasn’t launched a CBDC yet, the government has shown interest in digital currency. The New York Fed’s 12-week pilot program testing a simulated digital dollar is just one example of these ongoing initiatives.
Fed officials, including Chair Jerome Powell and Governor Michelle Bowman, might be hesitant about a digital dollar. But that hasn’t stopped the Fed from actively researching its potential.
ABA Warns of Crippling Impact on Banks
Further, the Fed launching the FedNow Service for instant payments in October has some experts on edge. They worry it could be the building block for a future CBDC.
According to the ABA, a CBDC would do more harm than good. The association fears it would siphon money away from banks and into the Fed, crippling banks’ ability to lend and hindering economic growth across the country. In simpler terms, the ABA sees a CBDC as a powerful competitor that could steal deposits from banks, making it harder for them to provide loans that fuel local economies.
SAUDI Arabia wants to avoid sending the economy into overdrive as it channels investments with the goal of pivoting the nation away from oil dependency.
Finance Minister Mohammed Al-Jadaan said on Tuesday (May 14) that while his country’s massive investments are helping to grow the non-oil economy, the kingdom needs to be careful about “overheating” – which could cause inflation to quicken – and “leakages”.
“If you don’t allow your economy to catch up with your projects, basically what will happen is you will import a lot more,” Al-Jadaan said at the Qatar Economic Forum. As a result, Saudi Arabia could lack the factories and other capacity needed to support its plans, according to Al-Jadaan.
“So giving it more time is actually wise,” he said.
The economic makeover, known as Vision 2030, has been hitting some snags eight years after being unveiled by Crown Prince Mohammed bin Salman. Al-Jadaan has previously acknowledged that there may be delays or acceleration for some projects.
Under the crown prince’s blueprint, Saudi Arabia is pumping hundreds of billions of US dollars into everything from electric vehicles to semiconductors and sports.
“It’s not actually the funding that is the constraint,” the finance minister said on Tuesday. “It’s actually the economic leakage.”
Faster price growth and overheating of the US$1.1 trillion economy would likely result from spending “under the current circumstances of serious inflation pressures around the world and serious increases in the cost of funding”, Al-Jadaan said.
The kingdom’s budget has swung into deficit after its first surplus in years, mainly due to lower energy prices and production and its spending commitments. It now forecasts fiscal shortfalls until 2026.
But Al-Jadaan said he was confident the kingdom will deliver on the plans despite the hefty price tag, as it derives more income from non-oil sources and takes a cautious approach in assuming how much it might earn from crude.
“We are very conservative in our projections and therefore our plans on how the oil revenue will cover that expenditure,” he said.
The government of the State of Qatar is the underwriter of the Qatar Economic Forum, Powered by Bloomberg.
The boss of the euro zone’s most valuable lender BNP Paribas (BNPP.PA), opens new tab on Tuesday played down expectations for a revival of M&A activity in European banking, saying the economics of cross-border and even some domestic deals rarely made sense.
Jean-Laurent Bonnafe’s comments to BNP’s annual shareholder meeting comes after Spain’s BBVA (BBVA.MC), opens new tab last week launched a hostile 12.2 billion euro ($13.20 billion) takeover bid for domestic peer Sabadell (SABE.MC), opens new tab, and after French President Emmanuel Macron said on Monday that Europe needed more banking consolidation.
“If you’re not a domestic player, you can’t buy a player like Sabadell… There’s no way that a non-Spanish bank could position itself as a white knight in a situation like this,” Bonnafe said in response to a question about whether BNP would consider buying Sabadell.
Cross-border banking deals in Europe are rare. Hurdles include differing regulations and labour laws, the lack of a euro zone-wide deposit insurance scheme and politics.
“When you acquire a Texas bank and you’re a Californian bank, if you have 100 cost synergies, and you do the same thing in Europe between two different countries, it’s not 100 cost synergies that you’re going to have, it’s 33,” Bonnafe said.
Euro zone regulators have long wanted more consolidation to boost financial stability and lenders, many of which have smaller market values than they did during the global financial crisis.
Macron, when asked on Monday by Bloomberg TV if he would be willing to countenance the sale of France’s Societe Generale (SOGN.PA), opens new tab to Spain’s Santander (SAN.MC), opens new tab, said: “Dealing as Europeans means you need consolidation as Europeans.”
Bonnafe said even domestic banking deals are tough to make work.
“You have to pay more than the price of the target; you have to buy it at a premium and when you’re bigger, supervision means you need even more,” he said.
Sergio Ermotti, CEO of Swiss bank UBS (UBSG.S), opens new tab – which last year rescued rival Credit Suisse in the biggest banking deal since the global financial crisis – told a Reuters Newsmaker event this week that he wanted to see more deals but was not optimistic.
“It’s going to be very hard to achieve a European consolidation without banking union and a proper framework, but domestic consolidation is still possible within Europe,” Ermotti said. “There has to be a way over time to develop something that is not triggered by a crisis.”
ChatGPT creator OpenAI has announced its latest AI model, GPT-4o, a chattier, more humanlike AI chatbot, which can interpret a user’s audio and video and respond in real time.
A series of demos released by the firm shows GPT-4 Omni helping potential users with things like interview preparation — by making sure they look presentable for the interview — as well as calling a customer service agent to get a replacement iPhone.
Other demos show it can share dad jokes, translate a bilingual conversation in real time, be the judge of a rock-paper-scissors match between two users, and respond with sarcasm when asked. One demo even shows how ChatGPT reacts to being introduced to the user’s puppy for the first time.
“Well hello, Bowser! Aren’t you just the most adorable little thing?” the chatbot exclaimed.
“It feels like AI from the movies; and it’s still a bit surprising to me that it’s real,” said the firm’s CEO, Sam Altman, in a May 13 blog post.
“Getting to human-level response times and expressiveness turns out to be a big change.”
A text and image-only input version was launched on May 13, with the full version set to roll out in the coming weeks, OpenAI said in a recent X post.
GPT-4o will be available to both paid and free ChatGPT users and will be accessible from ChatGPT’s API.
OpenAI said the “o” in GPT-4o stands for “omni” — which seeks to mark a step toward more natural human-computer interactions.
GPT-4o’s ability to process any input of text, audio and image at the same time is a considerable advancement compared with OpenAI’s earlier AI tools, such as ChatGPT-4, which often “loses a lot of information” when forced to multi-task.
OpenAI said “GPT-4o is especially better at vision and audio understanding compared to existing models,” which even includes picking up on a user’s emotions and breathing patterns.
It is also “much faster” and “50% cheaper” than GPT-4 Turbo in OpenAI’s API.
The new AI tool can respond to audio inputs in as little as 2.3 seconds, with an average time of 3.2 seconds, OpenAI claims, which it says is similar to human response times in an ordinary conversation.
Coinbase, the world’s second-largest exchange by trading volume, suffered a major outage on May 14.
Coinbase announced a system-wide outage lasting three hours at 4:19 am UTC. The exchange eventually managed to fully recover by 7:34 am UTC, according to its status page.
While the exact reason behind the outage remains unknown, Coinbase said it will continue investigating the issue.
Coinbase is the world’s second-largest exchange, with a $2.4 billion 24-hour trading volume, compared to the market leader, Binance’s over $18.7 billion trading volume, according to CoinMarketCap data.
Withdrawals and transfers are still offline for some users
Despite announcing that Coinbase systems are fully operational, some users continue facing technical difficulties.
In response to Coinbase’s announcement, pseudonymous X user Rocket commented:
“This tweet is false as millions of people are still unable to withdraw or transfer their assets.”
Numerous other users have also reported that crypto transfers and cash withdrawals remain offline, with some users calling for X’s Community Notes to fact-check Coinbase’s post about its systems being “fully recovered.”
Coinbase’s status page has also noted that it has been facing “degraded transactions” on May 14 but said that the incident has been resolved as of 4:19 am UTC, along with the system-wide outage.
Centralized cryptocurrency exchanges like Coinbase and Binance are usually the first point of contact for mainstream users buying their first digital assets, due to offering a simple user experience compared to decentralized exchanges (DEXs).
Hence, system outages and withdrawal issues on centralized exchanges can be particularly damaging to the mainstream’s trust in the crypto industry.
DEX trading volumes are significantly lower compared to centralized exchanges. On Monday, DEXs amassed over $585 million in global trading volume, which is only a fraction of the $4.6 billion trading volume amassed by centralized exchanges, according to Kaiko Research.
Deutsche Bank, a German multinational investment bank, is collaborating with Singapore’s central bank on asset tokenization.
Deutsche Bank has joined the Monetary Authority of Singapore’s (MAS) Project Guardian, which focuses on asset tokenization in wholesale funding markets and decentralized finance (DeFi) applications.
As part of the collaboration, Deutsche Bank will test an open architecture and interoperable blockchain platform to service tokenized and digital funds. The bank will also propose protocol standards and identify the best approach to contribute to industry progress.
Deutsche’s Asia Pacific head of securities and technology, Boon-Hiong Chan, will be the bank’s lead for Project Guardian. The bank is expected to work closely with Memento Blockchain, a software-based platform targeting DeFi and digital asset management.
Deutsche and Memento Blockchain previously worked together in 2022 and 2023, successfully completing a proof-of-concept known as Project DAMA, which refers to Digital Assets Management Access.
The initiative aims to unlock the potential for a more efficient, secure and flexible solution for digital fund management and investment servicing.
The new Deutsche Bank’s efforts aim to introduce DAMA 2. The development will involve Interop Labs, the initial developer of the major interoperable blockchain, the Axelar network.
Some major cryptocurrency firms, including Ripple, have been working with the Axelar Foundation to add interoperability to their blockchain networks.
Ripple announced a collaboration with Axelar in February 2024, ultimately planning to tokenize real-world assets (RWA) of the XRP Ledger, made interoperable through Axelar.
“It’s now clear that secure blockchain interoperability is required to unlock the trillion-dollar potential in asset tokenization,” Axelar co-founder and Interop Labs CEO Sergey Gorbunov told Cointelegraph.
“Deutsche Bank and Project Guardian are leading innovation toward establishing the open systems that will enable this technology. Axelar is critical infrastructure for institutional adoption, and we’re excited about this collaboration,” he noted.
Initiated by Singapore’s MAS and launched in 2022, Project Guardian is a collaborative initiative between the MAS and other financial market players, including the United Kingdom’s Financial Conduct Authority, Switzerland’s Financial Market Supervisory Authority and Japan’s Financial Services Agency.
Deutsche’s entrance to Singapore’s tokenization project comes a few days after the bank issued a report on stablecoins, raising questions about the transparency of major issuers like Tether.
Tether subsequently slammed Deutsche Bank over its claims, emphasizing that the report failed to provide substantial evidence or concrete data to support the claims.
Tether’s USDT stablecoin has established a major component of the cryptocurrency market, accounting for its biggest share in terms of trades. It’s also the world’s largest stablecoin with a total market value of nearly $111 billion.
Hayden Adams, the founder and CEO of decentralized exchange Uniswap, called on United States President Joe Biden to consider how voters think about crypto when they enter ballot boxes in November.
In a May 12 X post, Adams claimed there was “not much time” for President Biden to change the perception many crypto-focused voters had of his administration’s policies on digital assets. According to the Uniswap CEO, the U.S. President was making a “miscalculation” of assuming crypto would be irrelevant in the 2024 elections and allowing Senator Elizabeth Warren and the U.S. Securities and Exchange Commission (SEC) to “wage total war” on the technology.
“Republicans smell blood in the water and are turning hard towards crypto,” said Adams. “Not much time for Biden to save it. Anyone close to him or [Democratic] leadership should be expressing how serious this is and pushing for immediate reversal on his approach to crypto (public support/plan and reigning in sec + warren).”
In November, U.S. voters will choose whether to elect President Biden to a second term. Since taking office in 2021, he signed one of the first executive orders to establish a regulatory framework for digital assets and nominated Gary Gensler as the SEC Chair.
Under Gensler, the SEC has ramped up enforcement actions against crypto firms offering services or products to U.S. residents, resulting in many criticizing the commission for a seemingly inconsistent approach to digital assets. The regulator has civil cases pending against Kraken, Coinbase, Ripple and Binance.
On May 8, a majority of members of the U.S. House of Representatives voted in favor of a resolution that would overturn an SEC rule placing restrictions on banks holding customers’ crypto. Before the vote, President Biden said he intended to veto the resolution, letting the SEC’s Special Accounting Bulletin 121 stay in place.
With fewer than six months until U.S. Election Day, many in and out of the crypto space have called out the Biden administration for its policies on digital assets — some as a warning like Adams, others as a criticism. Members of Congress are also moving forward with legislation to clarify the roles the SEC and Commodity Futures Trading Commission (CFTC) would play in regulating crypto.
Adopting a potential digital euro won’t displace the Swedish krona, Sweden’s central bank said.
In a staff memo published Tuesday, the Sveriges Riksbank indicated it sees potential benefits for Sweden in the digital euro. It highlighted the possibility of a more robust and competitive payment system.
The bank added that there may be a small shift away from traditional bank deposits. However, the Riksbank believes any impact will be limited due to the proposed cap on individual holdings of digital euros.
Using the digital euro might extend beyond the eurozone. While it’s designed for eurozone countries, a proposal allows non-eurozone members to potentially join the system through agreements with the European Central Bank (ECB). This could give residents and businesses in those countries access to the digital euro on equal footing with those in the eurozone.
Sweden’s central bank downplayed the impact of a potential agreement, arguing that institutional factors won’t “crowd out” the krona. Firstly, payments involving the government are conducted in Swedish kronor, solidifying its position as the primary currency, it said.
“For instance, given we pay our taxes in Swedish kronor, we also prefer to receive our salary in Swedish kronor,” the Riksbank said. “And when businesses pay salaries, their main expenditures, in Swedish kronor, they prefer to charge customers in Swedish kronor.”
Also, Swedes can use digital euros even if they haven’t visited or lived in the eurozone before. Meanwhile, businesses in Sweden can accept digital euro payments, but they must transfer them directly to a bank account, just like businesses in the eurozone.
EU Moves Forward with Digital Euro Exploration
The European Central Bank (ECB) launched a two-year planning stage for the digital euro project late last year. Its goals for this period include finalizing the rules, choosing private sector partners, and running tests and experiments.
According to the EU’s draft proposal, which might be revised before release, advantages with a digital euro are significant. Meanwhile, the potential downsides tied to not having one could be substantial.
The draft rules give the ECB the authority to restrict how much money individuals can hold in digital form. A possible limit of between 3,000 to 4,000 euros is being discussed.
Swedish e-Krona Hinges on Digital Euro
A potential downside of the digital euro is that it could threaten the Swedish krona’s stability. High inflation can lead to price swings. If this becomes a problem in Sweden, businesses might switch to pricing things in euros. People might also choose to hold more of their money in euros (seen as a more stable currency) instead of krona. This “flight to quality” could weaken the krona.
Further, the decision to launch a digital Swedish krona, or e-krona, hinges on the development of the digital euro. An e-krona would bolster the Swedish krona’s position within Sweden if the digital euro becomes widely used, according to the bank.
Additionally, leveraging the technology and regulations built for the digital euro could significantly reduce the cost and complexity of launching an e-krona. Finally, the coexistence of both digital currencies could lead to smoother cross-border payments, it said.
The head of Saudi Arabia’s new investment fund for semiconductor and artificial intelligence technology said the country would divest from China if it were asked to do so by the US.
“So far the requests have been to keep manufacturing and supply chains completely separate, but if the partnerships with China would become a problem for the US, we will divest,” said Amit Midha, the chief executive officer of Alat, an investment firm backed by $100 billion in capital from the Public Investment Fund.
US officials have told their Saudi Arabian counterparts that they need to choose between Chinese and American technology as they aim to build out the Saudi Arabian semiconductor industry, Bloomberg has reported, as part of ongoing talks on a range of national security issues.
Read More: US and Saudis Near Defense Pact Meant to Reshape Middle East
“We are seeking trusted, secure partnerships in the US,” Midha said in an interview with Bloomberg News on the sidelines of the Milken Institute Global Conference in California. “The US is the number one partner for us and the number one market for AI, chips and semiconductor industry.”
Saudi Arabia is vying for regional leadership in advanced technology, with the hopes of creating data centers, AI companies and semiconductor manufacturing. Its ambitions come as the US increasingly scrutinizes the Middle East’s ties to China, over worries that countries like Saudi Arabia and the United Arab Emirates could serve as conduits for Beijing to access technology that Chinese firms are blocked from buying from the US.
The US has already asked Abu Dhabi-based AI firm G42 to divest from Chinese technology, in exchange for continued access to US systems that power AI applications. That agreement paved the way for a $1.5 billion Microsoft Corp. investment in G42.
Alat, meanwhile, will announce partnerships with two US tech companies by the end of June, and will co-invest alongside a US investment firm, Midha said. He declined to comment on which firms are involved in those talks or whether they are focused on AI, chips or a combination of the two.
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’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.”
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.
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.
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’ 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.
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 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.
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.
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.
There’s a very slight chance that Bitcoin has already reached its peak this cycle at the $70,000 mark, according to the “exponential decay” pattern floated by veteran trader Peter Brandt.
Of course, many other price models and predictors suggest Bitcoin is still far from its cycle peak and could instead top out at the $210,000 mark before the end of the bull run.
On April 27, veteran trader and analyst Peter Brandt posted a theory suggesting that Bitcoin’s bull market cycles have exhibited an “exponential decay” pattern.
This occurs when each successive cycle has a peak price of only around 20% of the previous cycle’s peak gain. The data shows that this has happened in the last three Bitcoin market cycles.
“Worded another way, 80% of the exponential energy of each successful bull market cycle has been lost,” said Brandt.
Based on this decay rate, Brandt estimated the current cycle would only see a 4.5x gain from the low of around $15,500. Thus, the cycle top has been projected to be around $70,000 — a level it already reached in March when prices topped $73,000.
However, Brandt isn’t fully convinced by this theory, assigning a 25% probability that BTC has already peaked this cycle.
Others argue that alternate models also blow this theory out of the water.
On April 29, CEO and director of research at Quantonomy, Giovanni Santostasi, rebutted the exponential decay theory with one of his own based on long-term power law behavior.
Commenting on Brandt’s theory, he said, “We have only 3 data points if we exclude the pre-halving period and actually only 2 data points if we consider the ratios,” before adding, “This is hardly enough data to do any significant statistical analysis.”
Santostasi measured the percentage deviation of price peaks from the long-term power law trend, extrapolating a different exponential decay pattern.
A power law is a functional relationship where one quantity varies as a power of another quantity, in this case, BTC price over time.
Using the figures extrapolated from the genesis block, this price model predicts a fourth cycle peak around December 2025 of around $210,000. The predicted bottom for the next cycle is around $83,000, based on historical observations, he said.
The analysis combines the power law trend, four-year halving cycles, exponentially decaying peak heights and other factors into an integrated model for Bitcoin price predictions.
Many more have made predictions about the Bitcoin peak during this cycle. Swyftx lead analyst Pav Hundal told Cointelegraph that Bitcoin would at least double by the next halving in 2028, estimating a price of around $120,000.
Meanwhile, CEO of Acheron Trading and quantitative trading strategies expert Laurent Benayoun anticipates a potential cycle top of $180,000.
Fidelity Digital Assets revised its medium-term outlook for Bitcoin on April 22, stating that it is “no longer cheap.”
At the time of writing, BTC was trading at $62,528, down 15% from its all-time high in mid-March, according to CoinGecko.
Amid increasing Bitcoin use for day-to-day purchases, the Bitcoin network recorded the highest number of confirmed payments on April 23.
Three days after stepping into the new halving cycle on April 20, the Bitcoin network processed over 1.6 million unique transactions between sender and receivers.
Comparing data from Blockchain.com and Glassnode shows a direct correlation between the launch of Bitcoin Runes — an alternative to Bitcoin Ordinals and the BRC-20 protocol on the Bitcoin blockchain — and the spike in daily Bitcoin transactions.
According to Dune Analytics data, Runes represented 81.3% of all Bitcoin transactions on April 23.
However, BTC eventually reclaimed the lion’s share of transactions over the network. As of April 29, BTC represented 77.8% of all Bitcoin transactions, while Runes contributed 18.8%. Other transactions on the Bitcoin network comprise ordinals (1.2%) and BRC-20 (2.3%) transactions.
Check out this Cointelegraph guide to learn more about Bitcoin Runes and how they differ from BRC-20 tokens.
The increase in the number of Bitcoin Runes transactions has worked in the favor of the mining industry. Two of the biggest mining firms operating in the United States, Stronghold Digital Mining and Marathon, highlighted the positive influence of Runes from both a financial and functional perspective in correspondence with Cointelegraph.
Rune transactions have added over 1,200 BTC worth of transaction fees to miners since the Bitcoin halving took effect.
While the hype around Runes is evidently subsiding, the pseudonymous decentralized finance (DeFi) researcher Ignas sees it as a real market opportunity. Ignas wrote in an April 17 X post:
“Runestone, RSIC, and PUPS are already pumping, promising holders shiny new Rune token airdrops. And FOMO threads keep coming. But, like the NFT frenzy post-JPEG reveal, the market could soon cool off.”
Runes and BRC-20 tokens are new fungible token standards aiming to create more utility for Bitcoin in a new paradigm known as Bitcoin DeFi, or BTCFi for short.
VoluMint addresses market-making challenges with a decentralized, AI-powered service, enhancing liquidity with reduced fees and a unique trading bot.
In crypto, small and medium-sized projects often find themselves at a crossroads, grappling with the high costs of market-making services crucial for sustaining liquidity and trading volume. Limited access to market-making services puts projects at risk of delisting and undermines investor confidence, potentially stalling growth.
The complexity of adopting effective market-making strategies also poses a significant barrier. Sophisticated algorithms and the need for robust infrastructure make it challenging for projects to compete on an even playing field, exacerbating the difficulties of navigating the crypto market’s volatile waters.
Overcoming market-making challenges in crypto
VoluMint offers a solution with its decentralized, AI-powered market-making service designed to enhance liquidity and trading activities across digital asset exchanges. VoluMint has recently launched MintSwap, a dedicated decentralized exchange (DEX) offering a more cost-effective trading platform with lower fees.
The core of VoluMint’s innovation lies in its market-making bot, which simulates human-like trading behaviors. The offset feature creates a more dynamic and organic trading environment on exchanges.
VoluMint’s approach to creating decentralized and unpredictable trading patterns adds a layer of randomness that makes it more difficult for the service to be detected or manipulated, which is critical for maintaining the integrity of trading activities and protecting against market manipulation.
Democratizing market-making for projects of all sizes
The service democratizes market-making by providing a subscription-based model accessible to projects of various sizes. VoluMint encourages trading activity and liquidity, generates automated volume to mirror organic trading across different pairs and minimizes the risk of delisting due to inactivity.
VoluMint is integrated with major crypto exchanges, including OKX, Binance, Bybit, MEXC, Bitget, Bitmart, KuCoin, Gate.io and all Ethereum Virtual Machine (EVM) chains. Projects can manage their market-making activities via a B2B dashboard, offering both autonomy and affordability through a monthly subscription model.
In addition to its technical offerings, VoluMint is committed to empowering its community through an affiliate program, revenue sharing and governance mechanisms. Through the affiliate program, users can earn commissions by referring new projects, while the revenue-sharing model distributes a portion of the profits to those staking their tokens.
Governance features of VoluMint enable tokenholders to vote on critical decisions, ensuring a fair and balanced approach to the platform’s development.
VoluMint also emphasizes seamless integration with centralized and decentralized exchanges, customizable trading parameters for tailored strategies and transparent analytics for real-time performance monitoring. These features collectively ensure that projects maximize their market presence while maintaining complete control over their funds and trading strategies.
Paving the way for equitable crypto trading
The project aims to transform market-making in the blockchain era and unleash the full potential of every crypto project through cost-effective, AI-enhanced decentralized market-making services. The VoluMint team commented on the project’s vision, stating:
“We envision a Web3 ecosystem where every project, big or small, has equitable access to advanced market-making tools, ensuring liquidity and growth. We’re dedicated to breaking down the barriers to entry, changing the future of crypto trading and fostering innovation across the blockchain landscape.”
VoluMint’s roadmap begins with the launch of a business-to-business dashboard and the initiation of an ambassador program. Q2 2024 will see the launch of MintSwap, a decentralized trading platform that seeks to offer cheaper fees, along with new tools and rewards based on VMINT, VoluMint’s native token. The team aims to introduce a range of benefits for VMINT stakers throughout the rest of the year.
VoluMint aims to disrupt the crypto trading landscape by offering accessible, innovative market-making solutions that level the playing field for projects of all sizes. Enhancing access to better solutions democratizes digital finance, enabling smaller projects to flourish and diversify the digital asset ecosystem.
A rally in the US dollar is accelerating, as stubborn inflation sows doubts over how aggressively the Federal Reserve will be able to cut rates this year compared to other central banks.
The US dollar index .DXY , which measures the greenback against a basket of six major currencies, is up 4.6% this year and stands near its highest levels since early November. The index rose 1.7% last week, its biggest weekly gain since September 2022.
The greenback is advancing as market participants grow convinced the Fed will need to leave interest rates at current levels for longer to avoid a potential resurgence of inflation. Last week’s stronger-than-expected consumer price data bolstered that view: investors late Friday were pricing in just 50 basis points of interest rate cuts in 2024, future markets showed, compared to 150 basis points priced in at the start of the year.
By contrast, investors believe some global central banks – including the European Central Bank , the Bank of Canada and Sweden’s Riksbank – could have a freer hand to ease monetary policy. That is a shift from a few months ago, when many believed the Fed would be among the first to cut rates.
“We had a fairly clear path that the Fed would likely be the first actor. The data that we have received really does undermine that,” said Eric Leve, chief investment officer at wealth and investment management firm Bailard. “I can see obvious reasons why the dollar could strengthen further.”
Yield differentials between the US and other economies have widened in recent weeks, contributing to the greenback’s rally as higher yields boost the allure of dollar-denominated assets. The two-year US-German bond spread stood at its widest since 2022 late Friday, LSEG data showed, a day after the European Central Bank reported it could cut rates as soon as June.
Bullish investors have increased their bets on the dollar, while bears have wavered. Net bets on the dollar in futures markets stood at $17.74 billion in the latest week, data from the Commodity Futures Trading Commission showed, the highest level since August 2022.
Central bank policy has diverged in recent months, reflecting economies’ varying struggles to contain inflation.
The Swiss National Bank reduced rates by 25 bps in March, its first cut in nine years. Sweden’s central bank has signaled it could cut rates in May if inflation keeps falling, while the Bank of Canada recently suggested it was ready to ease.
Central banks in Australia, Britain and Norway, on the other hand, appear less eager to loosen monetary policy.
Japan’s yen, meanwhile, has weakened to a near 34-year low against the dollar – though the country has recently ended eight years of negative interest rates. The Bank of Japan has ruled out using rate hikes to support the currency.
Eric Merlis, managing director and co-head of global markets at Citizens, believes the dollar could continue appreciating broadly on the back of a more hawkish Fed relative to the ECB. The euro has fallen 3.6% against the greenback this year.
“The dollar has room to strengthen. We have the strongest economy right now, in general, the trajectory of yields has been going up,” he said. “Whereas Europe is struggling in terms of growth.”
A stronger dollar could complicate the inflation fight for other economies as it pushes down their currencies, while helping the US tamp down consumer prices by tightening financial conditions.
Dollar strength can also be a headwind for US multinationals as it makes it more expensive to convert their foreign profits into dollars, and make exporters’ products less competitive abroad.
Other factors may also be driving the dollar. The US currency is a popular destination for investors during times of geopolitical uncertainty, which has sharpened in recent days on fears over a widening conflict in the Middle East.
Brian Liebovich, chief dealer for global foreign exchange at Northern Trust, believes the dollar may receive a boost from the Fed allowing assets to run off its balance sheet, a process known as quantitative tightening.
The Fed is currently allowing up to $60 billion per month in Treasury bonds and up to $35 billion per month in mortgage bonds to mature and not be replaced.
While Northern Trust expected the dollar to strengthen by up to 5% going into the US presidential election, “market activity since the initial dollar rally this week suggests that move could happen sooner than expected,” Liebovich said.
Others are less certain the dollar has more room to run. Shaun Osborne, of Scotiabank, wrote that the dollar’s recent strength means investors have been priced in a good deal of bullish news.
Rates and spreads are in the dollar’s favor, however, meaning “the trend at the moment suggests the USD will stay better supported,” he said.
HSBC is expected to cut an additional 20 investment banking jobs in Asia on a deals slump, takes the total cuts to around 30 this week, three sources with knowledge of the matter said.
The Asia-focused lender started the layoffs on Tuesday in the region, when it notified around a dozen bankers.
HSBC did not respond to Reuters query immediately.
