Plus, crypto asset funds experienced minor outflows last week
July 25, 2023
The latest moves in crypto markets, in context
By Lyllah Ledesma, CoinDesk reporter
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Happy Tuesday! Here’s what you need to know today in crypto:
Bitcoin is barely hanging onto the $29K level, with some analysts eyeing what might be a further dip following the Federal Reserve’s interest rate decision on Wednesday.
The U.K. Information Commission will make inquiries about Worldcoin.
Reversing a string of inflows, digital asset funds saw small outflows last week, led by Bitcoin-related investment products.
Following its decline below $29,000 for the first time in a month on Monday, bitcoin (BTC) was trading at $29,100 early Tuesday. The bearish price action comes ahead of the Federal Reserve’s expected 25 basis point interest rate hike on Wednesday afternoon. With investors fully anticipating the move, Mike Schwitalla, head of trading at Crypto Finance AG, will be looking to see if market participants receive the actual decision as hawkish. Should slight selloffs ensue in risk markets, he’s looking at support zones for bitcoin around $28,000, $26,000, and $25,000.
Bitcoin 24 hour price chart (CoinDesk)
The U.K.’s data watchdog, the Information Commissions Office (ICO), will examine Worldcoin, the project by OpenAI CEO Sam Altman. “We note the launch of WorldCoin in the U.K. and will be making further enquiries,” a spokesperson for the Information Commissioner’s Office told CoinDesk. “[Organizations] need to have a clear lawful basis to process personal data,” the spokesperson continued. “Where they are relying on consent, this needs to be freely given and capable of being withdrawn without detriment.” Worldcoin, which launched on Monday, describes itself as a digital passport that can help holders prove they are human. The project already had 2 million users from its beta launch.
Crypto investment products suffered $6.5 million of weekly outflows, according to crypto asset manager CoinShares, breaking a four-week string of inflows that totaled $742 million. Bitcoin-related products led the way, with $13 million of outflows as its price buckled below $30,000, with investors instead putting some money into cryptos like ether (ETH) and Ripple’s XRP.BTC investors have seemingly run out of positive news to bid on after the rally that followed global asset management giant BlackRock filing for a long-coveted spot BTC ETF on June 15. The BlackRock news led to a swarm of competitors renewing their applications, and spurred investors to pile money into BTC-focused investment funds over the next month at the fastest pace since October 2021.
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Market Insight: Fed Preview
(AgnosticPreachersKid/Wikimedia)
The U.S. Federal Reserve is set to announce its interest rate decision on Wednesday and the question is not whether it will hike the benchmark borrowing cost by 25 basis points , but whether the increase will mark the end of a tightening cycle that began 16 months ago and was partly responsible for last year’s crypto market crash.
With markets fully anticipating the central bank to raise its benchmark fed funds rate to a 22-year high of 5.25%-5.5%, investors will be looking to the accompanying policy statement and the post-meeting press conference from Chairman Jerome Powell for clues about the future course of monetary policy.
While economist surveys and futures markets show near-unanimity that tomorrow’s expected rate hike will be the final one of this tightening cycle, there are a number of both crypto and traditional finance analysts that believe the Fed will raise rates at least one additional time this year.
The chart shows Binance, the world’s leading digital assets exchange, now accounts for over 50% of total trading volume versus just 24% three years ago.
According to Kaiko, the trend could continue amid a wider downturn in market activity, which puts pressure on smaller exchanges.
The concentration of activity on the exchange explains why regulatory uncertainty surrounding Binance tends to weigh on crypto prices.
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
An in-depth look into the latest advancements and current challenges in crypto and bitcoin mining.
Oil and gas companies are keen to use gas that would normally be flared off to run bitcoin mining operations. But environmentalists claim the practice merely perpetuates the use of fossil fuels.
Miners have flocked to the state since China banned mining in 2021, encouraged by cheap energy, grid incentives and an alignment of values. “Bitcoin is all about freedom,” says one miner. “And in my dealings with the utilities and the regulators, Texas is all about freedom.”
