1. Market Wrap: Bitcoin Rangebound Into the Weekend, Lags Crypto Stocks
The cryptocurrency is expected to hold support above $30,000.
Bitcoin was mostly flat on Friday as buyers and sellers appear to be in a stalemate. The world’s largest cryptocurrency is up about 6% over the past week and is expected to hold support above $30,000 into the weekend.
In traditional markets, the S&P 500 and Nasdaq reached all-time highs after a better-than-expected U.S. jobs report on Friday. For now, sentiment for risky assets appears to be alive as well as volatility declines in both traditional markets and bitcoin.
Bitcoin (BTC) $33228, -0.1%
Ether (ETH) $2091, -0.59%
S&P 500: 4352.4 +0.75%
Gold: $1786.97, 0.58%
10-year Treasury yield closed at 1.437%, compared with 1.463% on Thursday
Bitcoin’s implied volatility remains elevated despite rangebound trading since mid-May, according to options data provider Skew. This suggests traders are not complacent given the recent stabilization in price. There is still some uncertainty present in the options market at the beginning of July.
2. Investors Cashing Out of Grayscale Bitcoin Trust Might Bring Market Boost
Investors who locked in borrowed coins will need to repurchase those to repay the loan, cryptocurrency pundits say.
The bitcoin market could get a boost this month from the expiration of investor restrictions on the sale of shares in the Grayscale Bitcoin Trust (GBTC), the world’s largest cryptocurrency fund.
Some digital-asset analysts and investors say it’s possible some of these investors might need to enter the market to buy bitcoin — to repay cryptocurrency loans they used to finance their original purchases of the GBTC shares.
“Lots of bearish chatter around GBTC unlocks whilst conveniently ignoring that in-kind subscriptions funded by debt will ultimately translate into spot buying,” crypto services provider Amber Group tweeted.
3. Fed’s Powell May Have Met With Coinbase CEO in May
Brian Armstrong is listed on the central bank’s calendar, public records show.
U.S. Federal Reserve Chairman Jerome Powell was scheduled to meet with Coinbase CEO Brian Armstrong on May 11, according to an entry on the central bank’s calendar.
It was unknown what the subject of the planned half hour meeting was or that it even took place.
Former Speaker of the House Paul Ryan was also to have been in attendance.
Per the calendar, Powell was scheduled to meet in person the following day and virtually the day after that with Christopher Giancarlo, the former chairman of the Commodity Futures Trading Commission, about the Digital Dollar Project that Giancarlo heads.
Armstrong tweeted a lengthy thread on May 14 about his adventures in D.C.
“Goal was to establish relationships and help answer questions about crypto,” he tweeted at the time.
Although there’s no mention of meeting with Powell, Armstrong’s thread did include a photo with Ryan.
When reached by CoinDesk, a Coinbase spokesperson said the company had nothing to add beyond Armstrong’s tweets at the time.
4. USDC on Tron Blockchain Surpasses $100M 2 Days After Public Unveiling
The growth could be the result of traders looking for faster and cheaper transactions compared with Ethereum.
The circulating supply of USD coin (USDC) on the Tron blockchain has surpassed 108 million in less than a month, according to blockchain data. This could be another sign that crypto traders are increasingly turning to blockchains that provide cheaper transaction fees with faster speed than what’s found on Ethereum.
The achievement came just a day after Circle, the crypto-native financial service firm behind the dollar-pegged stablecoin, said it added support for USDC on Tron. One of the stated goals of doing so is “enabling [USDC] growth in Asia and around the globe,” according to Circle’s website.
Blockchain data shows that the first transfer of USDC on Tron was on June 11.
A stablecoin, USDC is pegged 1-to-1 to the U.S. dollar, with each token redeemable for an equal number of greenbacks.
Crypto influencer Justin Sun’s Tron blockchain has already gained traction for the rapid growth of the largest stablecoin by asset cap, tether (USDT), on the network. As CoinDesk reported, there are more tether on Tron than on Ethereum, the blockchain of ether (ETH), as traders favor blockchains that provide faster and cheaper transactions.
While tether is the most traded crypto asset, there’s been a fast growing adoption of USDC on decentralized finance (DeFi), according to data from CoinGecko. Meanwhile, data from Glassnode indicates that nearly half of USDC supply is currently used in smart contracts.
The big difference from how USDC is used on Ethereum is that on Tron it’s mostly used for inter-exchange transfers, said Ryan Watkins, research analyst at Messari. He noted that nearly all of the USDC supply on Tron is concentrated in the top 10 addresses.
5. Money Reimagined: United States of Stablecoin
To maintain the dollar’s position in the world, the U.S. should follow Randal Quarles’ advice and foster an open, stablecoin-driven money system.
There’s not much nuance in the crypto community’s opinions about regulators. It’s all or nothing. If a policymaker “gets” the value proposition of bitcoin and cryptocurrencies, and if they embrace blockchain technology’s prospects for improving the financial system, the community will shower them with accolades. If not, they’re the enemy.
This week’s column is about the ramifications of a crypto-friendly speech by Randal Quarles, the Federal Reserve’s vice chair for Supervision. Among other things it has placed him squarely in the first category.
A couple of housekeeping notices:
First, with my co-host Sheila Warren on vacation, this and next week’s episodes of the “Money Reimagined” podcast will be lifted from the two CoinDesk TV shows we recorded during CoinDesk’s Consensus virtual conference in late May. Both are about the opportunities and challenges for crypto/blockchain technology to respond to the growing demand among investors and companies that businesses comply with environmental, sustainability and governance (ESG) standards. The format is faster than the regular audio podcast, with multiple short segments. Have a listen after reading the newsletter.
Second, I, too, will be out over the next two weeks. In my place, CoinDesk Executive Editor Marc Hochstein will write the weekly column while Features Editor Ben Schiller will shepherd the rest of the newsletter.
The stablecoin route to hyper-dollarization
Move over “Crypto Mom” Hester Peirce. The cryptocurrency community has fallen in love with a new U.S. regulator.
A speech this week by Randal Quarles, the Federal Reserve’s vice chair for Supervision, is being hailed by prominent crypto pundits as a manifesto for how the U.S. government could harness the power of cryptocurrency innovation to serve its international interests and establish an even wider “soft power” role for the dollar in the global economy.
What caught their attention: Quarles’ argument that stablecoins “could encourage [international] use of the dollar by making cross-border payments faster and cheaper, and it potentially could be deployed much faster and with fewer downsides” than a central bank digital currency (CBDC).
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July 3rd, 2021