Bitcoin

Bitcoin, Ether end week in interest rate doldrums; Binance’s BNB token leads winners

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Bitcoin and Ether prices were largely mixed but running into the red on Friday morning in Asia, with both looking to end the week in the losers column after a period of directionless trading. The interest rate hike by the Federal Reserve on Wednesday was followed by a bigger than expected GDP number in the U.S. overnight raising concern about rates staying higher for longer. Speculation Japan may be about to tweak its interest rate policy on Friday added to the risk-averse mood. Most other top 10 non-stablecoin cryptocurrencies traded mixed. Binance’s BNB led the winners after the world’s largest crypto exchange said it would fully restore operations in Japan in August. The Forkast 500 NFT index dipped and U.S. equity futures traded flat after Wall Street closed lower on Thursday.

Losing steam

Bitcoin dipped 0.41% in the last 24 hours to US$29,211 as of 07:45 a.m. in Hong Kong, bringing its loss for the past seven days to 1.97%, according to data from CoinMarketCap. The world’s largest cryptocurrency skidded lower on Thursday evening, managing to stay above support at US$29,000, but only just.

Concern about higher interest rates compounded for risk assets like cryptocurrencies when Japan’s Nikkei business news site on Thursday reported the country’s central bank – one of the last major central banks to maintain a loose monetary policy – was discussing a revision of its yield curve control policy, which would open doors to higher rates and raise the cost of money.

The Bank of Japan changing its ultra-loose monetary policies could be an issue to the crypto market, which is running out of price catalysts, Markus Thielen, head of crypto research & strategy at digital asset service platform Matrixport, said in an emailed comment.

The recent Bitcoin exchange-traded fund (ETF) filings in the U.S. could have boosted crypto higher but, “prices have instead been range-bound,” according to a Matrixport report on Thursday.

“The Grayscale Bitcoin Trust (GBTC) net asset value has lowered its discount from -45% to just -27% this year, but as the discount has started to widen again (from -25%), we see this as a sign that the Blackrock Bitcoin ETF news is losing momentum. The result could be a drop in Bitcoin prices,” said the report.

“Predictably, the crypto market has become very quiet during these summer weeks. This has caused trading volumes and volatility to fall markedly. Investors might be well advised to replace their Bitcoin spot with Bitcoin options, notably upside calls, as lower volatility has made option prices cheaper.”

Along with Bitcoin, Ether dipped 0.51% to US$1,860, down 1.68% for the seven-day period. 

Other top 10 non-stablecoin cryptocurrencies traded mixed, with Polygon’s MATIC leading the losers, and Binance’s BNB the winners.

Binance’s BNB gained 0.75% to US$240.46, but was still trading 0.98% lower for the week. 

Changpeng Zhao, chief executive officer of Binance, announced at the WebX conference in Tokyo on Wednesday that the crypto exchange will restore full operations in Japan in August based on “the country’s clear approach towards the industry.”

“Japan is a flagship leader in this (Web3) area and I think is an example for the rest of the world to follow. And to that end, Binance is extremely happy to participate in the Japanese market again,” said Zhao in his address.

On the regulatory front in the U.S., the U.S. House Financial Services Committee passed a bill Wednesday aimed at defining whether cryptocurrencies are securities or commodities. 

The bill, Financial Innovation and Technology for the 21st Century Act, seeks to increase the Commodity Futures Trading Commission’s oversight over the crypto industry and clarify the jurisdiction of the Securities and Exchange Commission (SEC).

The House of Representatives Agricultural Committee also voted on Thursday to approve the bill, which now moves to the House floor.

“The US regulatory permafrost is thawing. For the first time, Congress took critical steps to establish a comprehensive federal regulatory framework for digital assets in the US,” said Sheila Warren, CEO of the Crypto Council for Innovation – a global alliance of crypto industry leaders, in an emailed comment.

“Policymakers recognize that not only does legal uncertainty stifle responsible innovation, but it threatens to create an environment in which American investors must turn offshore,” Warren added.

The total crypto market capitalization dipped 0.47% in the past 24 hours to US$1.18 trillion, while trading volume dropped 16.53% to US$26.07 billion.





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