Cryptocurrencies like Bitcoin have not reduced financial risks in emerging economies, but instead, have amplified them, according to a study conducted by central banks and published by The Bank for International Settlements (BIS).
Crypto became a popular alternative for sex workers who were shut out from traditional banking systems, but the U.S. government's crackdown on crypto is making it increasingly difficult for them to use.
China's historical dominance in the crypto industry persists despite periodic crackdowns, with many crypto companies still earning a significant portion of their revenue from the country and maintaining unofficial channels of liquidity; China's economic uncertainty, including concerns about future crackdowns and a collapsing real estate market, can impact global crypto markets.
The cryptocurrency market has experienced a notable downturn, with the total market capitalization falling by 10% and triggering significant liquidations on futures contracts, attributed to factors such as rising interest rates, inflation, delays in approving a Bitcoin exchange-traded fund (ETF), financial difficulties within the Digital Currency Group (DCG), regulatory tightening, and a strengthening US dollar.
In July, capital inflows from venture capitalists in the crypto sector decreased by 10.26%, with $700 million raised, as macroeconomic conditions and geopolitical events continued to impact investment decisions, although some notable outliers, such as Polychain Capital and CoinFund, launched new funds totaling millions of dollars, and the potential approval of spot Bitcoin exchange-traded funds (ETFs) in the U.S. could bring renewed attention and capital into the industry. Infrastructure and Web3 sectors received the most capital inflows, while overall investor activity in the blockchain industry remained low, suggesting a slow return to a steady upward trend.
Tokenization of real-world assets on the blockchain is rapidly gaining momentum, offering benefits such as transaction speed, liquidity, cost-savings, and round-the-clock access, with experts predicting it to become a $16 trillion industry by 2030. Over 70% of financial leaders expect to use tokenization in their businesses, with potential impacts on asset trading, real estate transactions, derivatives, and carbon markets. Tokenization unlocks liquidity, enhances security and data protection, reduces transaction costs, and enables programmability and automation, making it a key driver of digital asset adoption and a fundamental shift in business operations.
Crypto-related stocks soar as the chances of fund companies offering Bitcoin ETFs increase, though Coinbase Global faces obstacles.
ARK Invest CEO Cathie Wood predicts that the market capitalization of cryptocurrencies will increase by over 2,100% in less than seven years, driven by institutional investment and the potential approval of a Bitcoin exchange-traded fund (ETF), with the total crypto market cap potentially reaching $25 trillion by 2030.
US companies are becoming increasingly hesitant to invest in China due to concerns over new anti-spying laws, competition from state-funded firms, and the country's economic challenges such as deflation and a property crisis.
The crypto market analyst at Bloomberg Intelligence predicts that the unlocking of billions in capital flowing into US-based ETFs could make 2024 a significant year for digital assets despite the US Securities and Exchange Commission's stance on crypto.
The crypto ATM industry in the United States is thriving despite concerns over illegal activities, with a growing customer base and a need for better education about crypto, according to a report by the Federal Reserve Bank of Kansas City.
Bitcoin and crypto could experience significant growth in the next few months, with September expected to be a particularly eventful period, including the potential impact of U.S. bitcoin ETF filings and China declaring crypto as "legal property and protected by law."
A recent survey by ConsenSys revealed that Americans perceive the financial system as functioning well, but they believe there is room for improvement and that the country has the necessary technology to transform the system; 98% of respondents have heard of cryptocurrencies, with Bitcoin, Ethereum, and Dogecoin being the top three crypto assets held by Americans.
Goldman Sachs executive Raoul Pal believes that the financial industry's adoption of cryptocurrency, signaled by BlackRock's interest in a Bitcoin ETF, could open the door for trillions of dollars worth of money and derivatives to flow into the crypto space.
Disappointing economic data in Asia-Pacific markets, overinvestment in China, and Chinese electric vehicle companies expanding in Europe are among the key factors impacting global markets, while the price of bitcoin remains volatile with conflicting predictions about its future.
The London Stock Exchange Group (LSEG) plans to launch a blockchain-powered digital markets business to enhance the trading of traditional financial assets, focusing on using blockchain technology to improve security and accessibility rather than cryptoassets.
Market makers in the crypto sector are facing challenges as costs increase and investors shy away from the market following a $2 trillion crash, leading to efforts to mitigate risks and a decline in profitability, with providers diversifying their activities across exchanges and storing digital assets away from trading venues. The market-making sector is experiencing a drop in profitability due to the use of intermediaries and collateral, and the industry has recognized the need for higher costs and increased risk management.+
A policy paper prepared under India's G20 Presidency recommends licensing crypto service providers and implementing anti-money laundering standards in the sector, while cautioning against an outright ban on cryptocurrencies due to their borderless nature. The paper also addresses concerns about stablecoins and their potential impact on financial stability.
Applying blockchain technology to financial markets could help reduce costs for issuers of financial instruments like bonds, but it also poses risks such as challenging sovereign authority and fueling tax evasion, according to a report by Moody's Investors Service.
Big tech stocks and cryptocurrencies, including Bitcoin, may underperform in the coming years due to contracting market liquidity and the Federal Reserve's hawkish policies, according to crypto analyst Nicholas Merten.
Crypto exchange Coinbase plans to focus on non-U.S. markets, including the European Union, the United Kingdom, Canada, Brazil, Singapore, and Australia, due to their clearer crypto laws, as it seeks to expand its operations and establish partnerships with global and local banks and payment providers while ensuring compliance with governance systems. The company also aims to intensify its lobbying and visibility efforts ahead of the EU elections and engage with the G20 to create global crypto standards.
A Bitcoin ETF is likely to be approved in the US by the end of 2023, with recent developments indicating increased prospects of approval, potentially revitalizing Bitcoin and lifting the crypto market out of its bearish state.
The lack of clear crypto regulations in the US has caused significant issues for the industry, leading to collapses and a weakening of America's position as a financial hub, according to Coinbase CEO Brian Armstrong. He emphasizes the need for clear rules that recognize the innovation potential of the technology while protecting consumers. Armstrong also highlights the potential benefits of Bitcoin exchange-traded funds (ETFs) and Coinbase's role as custodian in many ETF applications.
Indian crypto platforms may attain the status of authorized dealers, similar to banks, under the regulatory framework being developed by the Indian central bank, RBI, based on joint recommendations from the IMF and FSB, potentially resulting in legal legislation within the next five to six months.
The USA is unlikely to launch a Central Bank Digital Currency (CBDC) anytime soon, according to Michael Barr, the Federal Reserve's Vice Chair for Supervision, as it could pose risks to financial stability and the US payments system.
The market is underestimating the potential impact and value of Spot Bitcoin ETFs, with analysts arguing that approval would lead to significant financial inflows and buying pressure, and that it is a good time to enter the market and start building a crypto portfolio, despite regulatory challenges. Ethereum could also benefit from a futures-based ETF listing, but there is caution about the SEC potentially classifying ETH as a security. Overall, the global crypto adoption is dependent on market maturity, regulatory intervention, and consistent long-term adoption.
The Blockchain Association reflects on the past five years of the crypto industry's challenges in Washington D.C. and highlights potential future areas of focus, including anti-money laundering efforts, passing crypto-related legislation, and the possibility of regulatory personnel changes.
Summary: The transition of Ethereum to proof of stake has resulted in a significant reduction in energy consumption and the network becoming economically deflationary, although technical challenges still remain; however, concerns have emerged regarding the centralization of validation and the growing regulatory pressure in the United States.
Institutional investors are increasingly recognizing the long-term value of blockchain technology, but the true universal mass adoption of distributed ledger technology (DLT) in finance faces challenges such as the need for universal laws, international standards, and change management within financial institutions.
Blockchain entrepreneur Anatoly Yakovenko advocates for a regulatory framework that encourages entrepreneurship and protects consumers, stating that the US government should invest in blockchain research and development and explore creative solutions to experiment with the technology.
A recent report from Chainalysis suggests that grassroots cryptocurrency adoption is seeing a stronger recovery in lower middle-income nations compared to the rest of the world, indicating a potentially promising future for crypto in these countries.
The introduction of a bitcoin ETF could increase accessibility, liquidity, and institutional adoption, potentially stabilizing prices and attracting capital from mainstream investors, similar to the impact of gold ETFs on the gold market.
New York state's financial regulator, the New York State Department of Financial Services (DFS), has removed most of the digital assets from its "Greenlist" of approved coins for crypto firms to do business with, including Ripple, Dogecoin, Litecoin, and Chainlink. Bitcoin, Ethereum, and several stablecoins remain on the list.
The Federal Reserve's decision to maintain interest rates and raise its long-term forecast for the Federal Funds Rate surprised many market participants, causing a slight pullback in the stock and cryptocurrency markets while highlighting the need for investors to focus on the actual health and viability of companies and the utility of the crypto ecosystem. Additionally, the article speculates on the impact of the U.S. Securities and Exchange Commission's ruling on Bitcoin spot ETF applications and the potential for cryptocurrency to become a mainstream alternative investment.
Bitcoin could experience significant inflows from China in the coming months due to a weakening Chinese yuan and increasing capital flight, with Chinese investors turning to Bitcoin as a familiar investment in times of economic uncertainty, according to experts. The recent data shows that China's capital outflow reached its highest level since 2015 in August, potentially putting further pressure on the yuan. While Chinese capital controls may limit investment options, cryptocurrency, particularly Bitcoin, is seen as a viable alternative. However, analysts caution that the impact of Chinese capital flight on Bitcoin may not be as significant as it was in 2017 due to changes in regulations and crackdowns on certain practices.
