Tuesday, 27 June 2023

Market Summary

Market Summary 27 June 2023

Bitcoin Price: US$ 30,267.99 (-0.64%)
Ethereum Price: US$ 1,858.97 (-2.10%)  


Crypto traders are anticipating a significant event as $6.8 billion worth of bitcoin and ether options are set to expire on the Deribit exchange. The expiration, taking place on Friday, involves 150,633 bitcoin options contracts valued at $4.57 billion and 1.23 million ether contracts valued at $2.3 billion. These contracts account for 43% of the total open interest for bitcoin options. Market participants are closely monitoring the situation, particularly as dealers holding a negative gamma exposure could lead to an explosive rally or price slide if bitcoin moves away from the $30,000 strike price. In other news, Binance’s request to restrict the SEC’s use of language pertaining to Binance.US’ management of customer funds in press releases has been rejected by a federal judge. The judge ruled that the court’s involvement in the wording of public statements was unnecessary. Additionally, investment sentiment in bitcoin has turned bullish following the largest weekly inflows in a year for digital asset investment products. Bitcoin-related products accounted for $188 million of the total inflows, driven by high-profile institutions filing for exchange-traded funds (ETFs) and the price of bitcoin reaching a one-year high. Ethereum, on the other hand, saw inflows of only $7.8 million, indicating a stronger appetite for bitcoin over ether at present.

Bitcoin Cash (BCH) has experienced a significant surge, reaching a one-year high, driven by increased social media interest and support from institutional-backed exchange EDX Markets. The price of BCH rose 17% in the past 24 hours to reach $226.44, the highest level since May 2022. The rally has been fueled by the listing of BCH on EDX Markets, along with rising trading volumes. Meanwhile, HSBC Hong Kong’s announcement that its customers can access bitcoin and ether exchange-traded funds (ETFs) is not new information, as customers have been able to trade these crypto investment products since their listing on the Hong Kong Stock Exchange in December. In other news, a report from the FTX team investigating the failed exchange reveals that FTX owes its customers $8.7 billion, with $6.4 billion in fiat currency and stablecoin misappropriated. Senior executives are accused of commingling and misusing customer deposits, and efforts are underway to recover assets and address the wrongdoing.

The FTX exchange has made progress in recovering assets, with approximately $7 billion already recovered, according to CEO John Ray. However, the extensive commingling of funds has complicated the efforts to trace substantial assets and differentiate between operating funds and customer deposits. The FTX Debtors estimate that $8.7 billion in customer assets was misappropriated, mainly consisting of fiat and stablecoins. The second interim report alleges that the former FTX leadership deliberately misused customer deposits and concealed their actions with the assistance of a senior FTX Group attorney. The complexity of the situation highlights the challenges faced in asset tracing and recovery. In other news, Binance has reversed its decision to delist privacy coins in Europe after revising its operations to comply with local regulations. The exchange, which operates in various EU jurisdictions, stated that it must adhere to regulatory requirements and monitor transactions for listed coins. Initially, several privacy tokens were set to be delisted in France, Italy, Spain, and Poland, but the overall ban has been retracted. However, concerns have been raised about the potential increase in crypto scams with the rise of artificial intelligence (AI). Hackers have reportedly exploited OpenAI’s ChatGPT, leading to the blocking of malicious links and scams masquerading as ChatGPT extensions. Scammers are capitalising on the AI tool’s hype to create tokens and using social media platforms to promote scam coins, leveraging AI-powered tools to amplify their reach and create the illusion of credibility and popularity.

The Swiss National Bank (SNB) has announced plans to launch a wholesale central bank digital currency (wCBDC) pilot project on the Swiss SIX digital exchange. SNB chair Thomas Jordan stated that the project, which will involve real money equivalent to bank reserves, aims to test real transactions with market participants. The wCBDC pilot will run for a limited time and is not merely an experiment, according to Jordan. The SNB had integrated a wCBDC into the back-office systems of five banks as part of its Project Helvetia in early 2022. In other news, the Monetary Authority of Singapore (MAS) and 11 financial institutions released the Project Guardian report, which examined infrastructure models for facilitating tokensed asset trading. The report emphasised the importance of open and interoperable digital asset networks to unlock the full benefits of tokenisation. The report explored use cases such as over-the-counter foreign exchange transactions, trade finance with asset-backed securities tokenisation, and OTC-structured notes. Lastly, the Optimism network, a layer 2 solution for Ethereum, experienced a surge in transactions following its Bedrock upgrade on June 7. Transactions on the network increased by 67% after the upgrade, with daily fees falling from $80,000 worth of Ether before the upgrade to $50,000 as of late June. The network’s transaction volume peaked at over 550,000 transactions per day around mid-June.





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