Cryptorank recently released a report on the crypto market’s performance in Q2 2023. Uncertainty was the theme of this period, with major regulatory and institutional happenings.
Most high-cap crypto projects barely gained
Cryptorank’s heat map depicts misfortune in crypto between April and June. While some high-cap projects registered stellar performances, there was mediocrity in most of the market.
Bitcoin relished a momentary triumph in the period, closing at $30.5k, a 10% gain from the opening value of $28.3k. Of course, the period was not characterized by all upsoars. There were also moments of descent.
As the quarter faded away, Bitcoin increasingly gained more dominance. Dawning the quarter with 46.39% dominance, the coin gently attracted more crypto investors closing at 50.47%. The dominance growth can be partly attributed to price gains as other cryptos plummeted.
Ethereum markets displayed a similar demeanor to Bitcoin’s. It earned a rise of roughly 7% between April and June. At the quarter’s dawn, Ethereum traded at $1821, but towards the end, this coin was valued at $1948. In a similar taste but more hyper price performance, Bitcoin cash surged by 129%.
There was a transmission of the small gains seen in large-cap to lower-cap tokens in the period. For instance, Air Protocol, a crypto service platform, surged 302%. OMAX, a DeFi network, surged 294%. Other big gainers were STAIKA (143%) and Games for a Living (138%).
Bitcoin’s performance versus traditional assets. Source: Cryptorank
Then come the losers. The ambiguity of crypto markets was disclosed as more top-cap coins recorded losses. Red and darker shades of red were the most prevalent market patterns in Q2.
The market negativity cost SOL, XRP, LINK, ETC, DOT and ATOM some minute percentage of their value. MATIC and ALGO were also subject to mass plummets dropping by 37% and 41%, respectively.
The turmoil that hit crypto markets in Q2 was way less than that reported in preceding periods. In Q2 2022, Bitcoin’s return dropped by over 56%. In a similar period in 2021, Bitcoin’s return plunged by 40%.
Despite Bitcoin and Ethereum seemingly gaining, the numbers from the report suggest punctured investor confidence as most of the crypto space lost value.
Bitcoin vs traditional assets
The ambitious crypto coin has rivalled some of the best traditional investment assets since its birth. Born to offer payments, Bitcoin is gradually becoming a gold substitute.
Bitcoin’s performance versus traditional assets. Source: Cryptorank
In the first half of the year, Bitcoin thrived against many of its rivals. Based on data, the coin has gained 84% in value since the year dawned. In this period, NASDAQ gained 31%, S&P gained 15%, Gold 4% and Silver -5%.
A Trendy quarter?
Q2 had no shortage of big developments and unique trends. Some industry-shifting developments include;
Bitcoin Spot ETF
The world of Bitcoin products was rejuvenated with a new bigger player joining the race for spot ETFs. Blackrock, the largest investment manager, filed for a Bitcoin spot ETF in mid-June.
Blackrock’s filing triggered a market frenzy, with several other companies, including Ark Invest, Invesco, and Valkyrie Investments, going for such applications. Grayscale’s Bitcoin Trust saw a massive valuation rise in Q2. This was a consequence of rumours that Fidelity Investments would purchase the trust.
Bitcoin ordinals mania
The ordinals’ craze brought a recharge to Bitcoin markets. Although ordinals gained life in Q1, the second quarter gazed at the peak of these new assets.
Bitcoin’s activity reached new heights when BRC-20 tokens came into the picture. In early May, the Bitcoin-based meme coins hysteria impeded transaction processing. Accordingly, Binance was forced to halt Bitcoin transactions twice, citing network issues.
Consequently, Bitcoin transaction fees climaxed to about $30. The fee surge revived long-dead conversations about Bitcoin transaction charges.
Shanghai upgrade aftermath
Ethereum completed its Shanghai upgrade in April, opening the gates for investors to withdraw staked ETH. Initially, many expected the upgrade to trigger lumpsum withdrawals. However, three months later, the staked ETH’s value only increased to about $23 million.
The regulatory onslaught continues
Regulatory ambiguity persisted with the SEC hastily attacking crypto projects. The US ombudsman has maintained a negative attitude towards cryptocurrency. The regulators seemingly accelerated their crypto attacks in Q2.
In a shocking turn of events, the SEC filed lawsuits against Changpeng Zhao, Binance and Coinbase, all within 24 hours. Imagine the crypto community’s reaction ensuing the events.
While attempting to bring assets under its umbrella, the SEC labelled several more crypto coins as securities. This is an attempt to bring these assets under its umbrella.
CBDCs are still the talk of the town, but the development remains stagnated in the US, China, the UK, and Nigeria.
US CPI has risen to 305.11 points in June from 304.13 points in May, but the country’s inflation rate stands at 3%.
The consumer price index for all urban consumers (CPI-U) rose 0.2% in June on a seasonally adjusted basis.
Over the last 12 months, all items index increased 3.0% before seasonal adjustment.
The US CPI has risen to 305.11 points in June from 304.13 points in May. Over the last 12 months, all items index increased 3.0% before seasonal adjustment. The index for shelter was the largest contributor to the monthly all-items increase, accounting for over 70 percent of the increase.
More fear in the markets as CPI increases in the US
The USConsumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. In June, it rose to 305.109 points after the Federal Reserve skipped a rates hike for the first time in months.
According to data from the Bureau of Labor Statistics, the index for shelter was the largest contributor to the monthly all-items increase, accounting for over 70 percent of the increase, with the index for motor vehicle insurance also contributing. The food index increased 0.1 percent in June after increasing 0.2 percent the previous month. The index for food at home was unchanged over the month, while the index for food away from home rose 0.4 percent in June. The energy index rose 0.6 percent in June as the major energy component indexes were mixed.
The index for all items less food and energy also rose in the month by 0.2%, the smallest 1-month increase in that index since August 2021. The indexes that increased in June include
Shelter
Motor vehicle insurance
Apparel
Recreation
Personal care.
At the same time, some indexes decreased. They include:
Airline fares,
communications
Used vehicles
Household furnishing
Operations
The report also indicated that all items index increased 3.0% in the past 12 months ending June, the smallest increase since March 2021. It also indicated that all items food and energy index rose 4.8 percent over the last 12 months. The energy index decreased 16.7 percent for the 12 months ending June, and the food index increased 5.7 percent over the last year.
Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city average
BoE has released a Financial Stability Report stating that over 2 million households cannot manage to pay mortgages.
The report shows that over 2 million registered mortgage financiers will see monthly payments increase between $259 and $645 by the end of 2026.
Over 1 million financiers will see their monthly mortgage payments jump by more than £500 in the time frame.
UK mortgage financing is set to become harder for middle and struggling social classes as inflation worsens and BoE projects hikes of up to $645 in monthly payments.
No end in sight for UK Mortage agony
As reported by Fintech Express on July 11, there is no end in sight to UK Mortgage crisis agony. BoE has reported expected rises in monthly mortgage payments through 2026.
The Bank of England has warned that struggling homeowners are set to persevere more pain as UK Mortgages get adjusted and increased by up to $645. However, it has been added that stressed households today are more indebted than they were in the 2007 financial meltdown.
In the Wednesday Financial Stability Report, BoE said that its model shows that over 2 million UK mortgage holders will see monthly payments increase between £200 to £499 ($259 to $645) by the end of 2026. It added that over 1 million people will see their mortgages shoot up by £500 over the same timeframe
This report comes after the U.K.‘s average 2-year mortgage deal rose to its highest level since 2008, with the average 5-year mortgage deal following closely behind. The bank expects more pain in the markets as the inflation rates still run wild, which means more action must be taken to prevent embedding inflation.
As such, the expected interest rate hikes will bring more pain to the markets and mean higher mortgages for the borrowers. Keep watching Fintech Express for more updates on this and other fintech-related developments.
The Peoples Bank of China (PBOC) has started trials for their digital Yuan on offline payments.
The offline payments program will involve the use of SIM Cards.
Peoples Bank of China has started trials for its plans to allow users to make phone payments using the new digital Yuan without internet connectivity. One of the key parts of the plan is integrating the e-CNY app with specialized SIM cards with near-field communication capabilities.
Peoples Bank of China heads trials on settling offline digital yuan payments via sim cards
The e-CNY was launched in 2022 and has struggled to gain usage. However, the Peoples Bank of China is still working on it as it has already gained widespread usage, though slowly. Instead, it is increasing its efforts to make it more user-friendly and accessible.
It announced on July 10 that it has partnered with China Telecom and China Unicom, a major telecommunications operator in the country, to commence trials on offline SIM card-powered e-CNY money transfers.
The People’s Bank of China plans to allow users to easily access the digital Yuan and use it anywhere without many obstacles. In the social post, the bank said
“On July 11, Peoples Bank of China, China Telecom, and China Unicom will jointly launch SIM card hard wallet products on the digital renminbi APP, realizing another innovative achievement in the cross border of finance and communication and providing more universal and convenient payment for digital renminbi applications way and experience.”
The post also added that the product would be launched soon in some pilot areas, and invited users could experience it. It added that at the pilot testing phase, only Andorid-powered phones with NFC function would support the new SIM card hard wallets.
Keep watching Fintech Express for more updates on this and other fintech-related developments.
Tether has minted another billion USDT coins on Tron Network to satisfy chain swap demands.
USDT has increased its market value by $2.6 billion in 90 days, while USDC lost its market value by $4.6 billion
USDT now has a stablecoin market dominance of 65%
As demand rises, Tether USDT has increased its market value by $2.6 billion. As a result, Tether has minted 1 billion more coins on Tron Network to satisfy the blockchain’s USDT chain swap demands.
Tether USDT market value rises by $2.6B in 90 days, achieving a 65% market dominance
The minted amount will be spent as inventory for the next period of issuance requests and chain swaps on the Tron Network. A chain swap is a process where traders transfer assets from one blockchain to another. For instance, you can swap USDT from Tron Network to BNB Chain network.
This development comes as Tether USDT gains more stablecoin market dominance to 65% while the second largest stablecoin by market cap is losing its demand. Tether’s USDT gained $2.6B in market cap over the past 90 days, while Circle’s USDC lost $4.6 B in the same period.
In the news, Tether is also increasing its footprint in crypto investments. As such, it’s setting up its USDT coin for adoption even more. However, it still hasn’t received total trust from the crypto industry following a series of crypto collapses less than a year ago.
The housing sector in the U.K. has been heavily impacted as interest rates hike pushes mortgages to multi-year record highs.
More pain is expected as the inflation rates in the country are still high and need more action from the Bank of England.
The average level of the two-year fixed deal stands at 6.66%
Mortgage rates are spiking in Britain following tough economic times and decisions from the European Central Bank and the Bank of England. The country has been experiencing record-high inflation rates that have necessitated the introduction of higher bank rates, which have raised living costs.
Mortgage rates are expected to rise further in the U.K.
More pain is expected in the British housing markets after mortgage rates have skyrocketed despite inflation remaining malignantly high. The Bank of England is expected to keep hiking interest rates to avoid embedding inflation.
A key mortgage rate went up on July 11, showing that the 2-year fixed deal now stands at 6.66% per figures provided by Moneyfacts. This increase marks a 15-year high record of the specific housing mortgage deal. It had hit a closer 6.65% increase in October 2022 following the defunding of tax cuts in the mortgage market.
In the same report, the 5-year mortgage rate rose to 6.17%, a marginal increase from the past days but still lower than the 6.51% level reached in October 2022. These mortgage rates are expected to rise even further following the need for more interest rate hikes from BoE.
Britain’s economic outlook becomes worse than previously expected
Britain had expected its inflation rates to fall below 2% by the end of the year, a target that keeps getting shadowed each day the deadline approaches. It seems increasingly unlikely that the Bank of England will hit this target without pushing the economy into a recession.
Figures from earlier today show that wage rates are spiking in the country, and a housing sector meltdown is imminent. These are signs of a deteriorating economy. And sadly, there are still no signs of the British economy hitting a turnaround soon. Therefore investors should brace for impact and choose less risky investment options in the country.
Keep watching Fintech Express for more updates on this and other fintech-related developments.
10-year treasury yields traded lower at 3.962% on Tuesday
The 2-year treasury yield was down by more than two basis points to 4.837%
US treasury yields have fallen as investors await key economic data that could impact the Federal Reserve monetary policies.
US treasury yields fall as investors weigh Federal Reserve monetary policy
Investors on Tuesday pushed the US Treasury Yields down as they anticipate the release of June CPI data, which is set to be released on July 12 at 8:30 Eastern time.
At 3:51 a.m. ET, the yield on the 10-year Treasury traded over four basis points lower at 3.9621%. The 2-year Treasury yield fell by over two basis points to 4.8367%.
Investors are wary of further interest rates hike that Fed chair Jerome Powell has indicated could be necessary. The Federal Reserve is expected to post two more interest rates hikes. Investors are also on the lookout for other key economic data expected this week, like the wholesale inflation coming n July 13, 2023.
Keep watching Fintech Express for more finance and fintech-related developments.
U.K. wage growth records have sent fear down the spines of investors as they digest the possibility of a longer-term wild inflation
The rise in wages shows signs of inflation embedding, which means more monetary policies are needed over time.
U.K. wage growth has shaken the eurozone markets as the country battles wild inflation rates. Investors are digesting the report, which shows inflation could run wild for a little longer.
U.K. wage growth haunts the struggling economy
Economists now fear that the U.K. economy will keep being in trouble following a strong wage growth report. The report shows that U.K. wages have risen to a joint-record high in the three months ending May.
Price rises and wage growth is always negative in an economy struggling to fight inflation as it signifies embedding inflation. Embedded inflation happens when you see inflation expectations over the medium term rise to inconsistent levels. Embedded inflation arose in the 1970s when high inflation persisted for years, necessitating multi-year wage agreement changes.
As such, the sharp rise in U.K. wage growth is a negative factor in the battle against inflation. The country is also caught in other financial issues from inflations like high mortgages, almost sinking the housing sector. Over 2 million homes cannot afford to pay their mortgages on time and have defaulted.
Keep watching Fintech Express for more updates on this and other Fintech-related developments.
UK FCA and other enforcement agencies have investigated 26 crypto ATMs and shut them down.
The shutdown was conducted as per the Money Laundering Regulations that were set in place in 2017
UK FCA has joined a growing group of hawkish regulators after spearheading multiple crypto crackdowns. Now, it has ordered the shutdown of 26 crypto ATMs that have worked against set rules.
UK FCA intensifies crypto crackdowns
The report on UK FCA cracking down on crypto ATMs comes at a time when global crypto regulation efforts are intensifying. The regulator worked hand in hand with others to visit and inspect 34 crypto ATMs in 2023, an exercise that concluded with the shutdown of 26 of the inspected ATMs.
The UK FCA had given an ultimatum to all crypto ATMs in February, requiring them to follow the set regulations or wind down their operations. Regarding the development, Steve Smart, the joint executive director of enforcement and market oversight at the UK FCA, said:
“If you use a crypto ATM in the U.K., you are using a machine operating illegally and may be handing your money over to criminals.”
He added that the U.K. government would not protect victims of the scams associated with such ATMs.
This development comes when other regulators like the US SEC intensify their efforts and oversight over the crypto space. The US SEC has a record-high budget to help it ‘streamline’ the industry. It is already in significant crypto court battles, with its targets Ripple, Binance, and Coinbase.
The US SEC claims that the crypto industry operates in incompliance and thus needs enforcement to be put in check. This sentiment appears to be shared by the UK FCA, which has been going hard after crypto operations land advertising in the U.K. However, the two regulators are different in that the U.K. expects its first comprehensive crypto regulatory framework, MiCA, to go live in December 2024, while the U.S. doesn’t.
Keep watching Fintech Express for more updates on this and other fintech-related developments.
Author Sarah Silverman and two others have filed a lawsuit against Meta and Open AI, citing copyright issues.
The three claim that Open AI and Meta used their works to train their Artificial intelligence programs
American comedian and author Sarah Silverman and two other authors, Richard Kadrey and Christopher Golden, have filed a lawsuit against Meta and Open Ai, claiming that the two establishments used their copyrighted works to train their AI models.
Sarah Silverman not happy with OpenAi and Meta’s insensitivity
Meta and OpenAI have been slapped with a lawsuit that claims that they willingly used copyrighted work belonging to three journalists to train their AI models without prior permission. According to the court documents, many of the books that appear in the data set that Meta once admitted to have used to train Llama are copyrighted and belong to the three authors.
Similarly, in the case against OpenAI, Sarah Silverman’s lawsuit alleges that when ChatGPT generates summaries of the plaintiff’s work, it indicates that it had training with copyrighted content.
“The summaries get some details wrong. This is expected since a large language model mixes expressive material derived from many sources. Still, the rest of the summaries are accurate…”
The plaintiffs claim that the above companies retrieved copyrighted data from “shadow libraries” like Library Genesis, Bibliotik, and others. They explain that these libraries use torrent systems to make books available in bulk while overriding all copyright protocols; thus, they are illegal, unlike open-source data sources.
“These shadow libraries have long been of interest to the AI-training community because of the large quantity of copyrighted material they host.”
The lawsuit also said they are carrying out the lawsuit and representing others whose works were used without their permission. This development comes at a time when global economic powers are introducing regulatory frameworks for artificial intelligence development and issuance for commercial purposes.
However, the regulatory steps still need to be introduced properly as the AI industry is young and thus needs more time to be fully regulated. Keep watching Fintech Express for more updates on this and other fintech-related developments.
