Mini Program: Daily Cryptocurrency Dynamics Summary

1. Analysis: The probability of an economic recession in the second half of the year is 40%. Bitcoin may become a "safe haven asset", but it is not good for altcoins

Amid concerns about a U.S. recession and geopolitical uncertainty that shook global markets this week, analysts have assessed the likelihood of an economic downturn this year and its possible impact on Bitcoin and other cryptocurrencies, according to The Block. "Considering current economic indicators and recent actions by central banks, concerns about a global recession are indeed reasonable," said analysts at crypto exchange Bitfinex. "In the past three months, central banks have implemented 35 interest rate cuts, exceeding the level of interest rate cuts in early 2024. This proactive easing policy is reminiscent of the 2009 financial crisis, when the highest number of interest rate cuts was 76. Although the inflation outlook has improved this year and global inflation levels are expected to ease, economic growth forecasts remain tepid." The International Monetary Fund (IMF) predicts that global economic growth will drop slightly from 3% to 2.9% by 2024, which, coupled with continued inflationary pressures, suggests that central banks are "taking action to stimulate the economy to avoid a further downturn." They added: "A large number of speculative-grade bonds maturing in the United States in 2024, coupled with falling bond yields, indicate a tight financial environment. Investors' shift to safer assets and falling yields are classic recession indicators, reflecting a lack of confidence in continued economic growth." Aurelie Barthere, chief research analyst at Nansen, an on-chain analysis platform, also said that such concerns are justified. Barthere emphasized that eurozone economic growth has been weak since the energy shock triggered by the Ukrainian war in 2022 and the possible increase in US tariffs; although there are "no obvious areas of vulnerability" other than overvalued stock markets, US economic growth is also slowing, and adjustments in stocks and risky assets are enough to tighten financial conditions and trigger an economic contraction. Barthere said: "I think there is a 40% chance of a recession in the second half of 2024 (30% for a shallow landing and 10% for a hard landing)," higher than the historical average of 17%. Bitfinex analysts believe that concerns about a recession may have a complex impact on Bitcoin and the broader cryptocurrency market. They said: "Bitcoin may benefit as a safe-haven asset, and investors often flock to assets that are seen as valuable during periods of economic uncertainty."Bitcoin, often referred to as ‘digital gold,’ could see an increase in demand as traditional markets face volatility.” However, analysts at Binfinex are not optimistic about the impact on other crypto assets. “The broader crypto market, especially altcoins, could suffer due to a decline in liquidity and risk appetite,” they warned. “Investors may become more risk-averse and move funds from riskier assets such as small-cap cryptocurrencies to safer investments.”

2. Bloomberg analyst: Bitcoin ETF options may be launched in Q4 this year

Bloomberg analyst James Seyffart said that Bitcoin ETF options may be launched in the fourth quarter of this year. Although the deadline for the final decision of the U.S. Securities and Exchange Commission (SEC) is September 21, further steps from the U.S. Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC) are required. Currently, there are a variety of ETFs related to Bitcoin and Ethereum, including leveraged ETFs, which already provide options trading.

3. The White House and Harris advisers listened to the opinions of cryptocurrency industry executives but made no commitments

A group of cryptocurrency industry executives held a conference call with White House officials and advisers to Vice President Kamala Harris on Thursday to provide their input as the Democratic presidential candidate develops policy positions on cryptocurrency issues. Industry executives outlined their concerns about crypto policy. According to people familiar with the matter, neither White House representatives nor Harris' advisers made any commitments. Participants in the call included executives from Coinbase, Ripple, Kraken, Circle, and venture capitalists Mark Cuban, Chris Dixon and Ron Conway. White House Deputy Chief of Staff Bruce Reed, National Economic Advisor Lael Brainard, Deputy Treasury Secretary Wally Adeyemo and Kristine Lucius, Senior Advisor to the Vice President and Director of Legislative Affairs, also participated in the call.

4. Kaiko Report: The total amount of Bitcoin held by miners has dropped to the lowest level in three years

According to a report by cryptocurrency research firm Kaiko, as of August 3, the total amount of bitcoin held by miners has fallen to about 1,510,300, which is about 2.4% lower than the highest record in December 2020, according to Bloomberg. At recent prices, this part is worth about $86 billion, accounting for about 8% of all circulating bitcoins. Data shows that miners have been selling tokens since the price of Bitcoin began to rise at the end of 2023, which is long before the most recent "halving" in April. The proceeds from the sale are usually used by companies to pay operating costs, and mining companies have received fewer new token rewards since the last four Bitcoin software upgrades. Kaiko said that the increase in network fees after the halving briefly alleviated the loss of income for miners, but it was only short-lived, and the average fee has dropped from a high of $143 after the halving to $2.

5. The Federal Reserve requires crypto-friendly banks Customers Bank to limit crypto customer risks

According to CoinDesk, the Federal Reserve has taken an enforcement action against the crypto-friendly bank Customers Bank, claiming that it failed to properly handle the risks of crypto customers. In an execution agreement signed by Customers Bank executives, the Federal Reserve pointed out that "the bank has significant deficiencies in risk management practices and compliance with applicable laws, regulations and regulations related to anti-money laundering." According to the order, Customers Bank must provide the Federal Reserve with a series of written plans and new compliance methods as soon as possible, including an agreement to "ensure that the bank collects, analyzes and retains complete and accurate information for all customers." The bank must notify the Federal Reserve 30 days in advance of "any new strategic initiatives, products, services or relationships with third parties related to digital asset strategies." It is reported that Customers Bank's customers include well-known crypto companies such as Galaxy Digital, Coinbase and Circle. According to previous news, U.S. banking regulators such as the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have issued guidance aimed at limiting banks' exposure to the crypto industry.

6. Putin has signed a law legalizing cryptocurrency mining in Russia

Russian President Vladimir Putin has signed a law legalizing cryptocurrency mining in Russia. Only registered Russian legal entities and individual entrepreneurs will be entitled to mine. Individuals who do not exceed the energy consumption limits set by the Russian government will be entitled to mine digital currencies without registration. According to the document, foreign digital financial assets can be traded on Russian blockchain platforms, and the Central Bank of Russia will have the right to ban individual issuances if it finds a threat to Russia's financial stability. Earlier, Putin discussed the introduction and use of digital currencies with the government at a meeting on economic issues. He noted that this is a promising economic area and that Russia must "seize the moment" and quickly establish a legal framework and regulation, develop infrastructure, and create conditions for circulation.

7. OneCoin "Crypto Queen" Ruja Ignatova's assets frozen by British court

According to Decrypt, the High Court in London, UK, has issued a global asset freezing order to freeze the assets of suspected OneCoin scammers, including the assets of the notorious "crypto queen" Ruja Ignatova. The case was initiated by more than 400 victims of the OneCoin Ponzi scheme, resulting in the freezing of the assets of Ignatova and OneCoin co-founders Sebastian Greenwood, Christopher Hamilton and Robert MacDonald. Hamilton and MacDonald allegedly helped the organizers of the OneCoin scam to launder money. The funds of the four influencers who promoted the scheme were also frozen, as well as the funds of the business entities that Ingatova allegedly used to launder money and purchase assets. Previously, OneCoin was launched in 2014, and Ignatova defrauded investors around the world through a $4 billion Ponzi scheme until the scam collapsed in 2017, when she disappeared. She was last seen in 2017, when she was on a plane fleeing Bulgaria to Athens, Greece, and was included in the US Federal Bureau of Investigation (FBI)'s Ten Most Wanted Fugitives list.

8. The United States will establish a Bitcoin tax-free zone to promote the development of the digital economy

According to Cointelegraph, the United States is brewing a new proposal to make the United States a global leader in the digital economy by establishing a Bitcoin tax-free digital economic zone (DEZ). The proposal, led by the newly formed USABTC policy group, advocates a tax-free DEZ where Bitcoin can be traded and accumulated without paying capital gains tax, but taxed when redeemed. According to USABTC, the initiative can ensure the financial future of the United States by fostering a "resilient and innovative" economic environment, leveraging the potential of Bitcoin while maintaining the core position of the US dollar. USABTC said that it is neither feasible nor politically tenable for the government to purchase Bitcoin directly. Therefore, it advocates the creation of a tax-free digital economic zone where Bitcoin transactions can be carried out tax-free while incorporating a taxed redemption process to ensure income generation. Providing tax-free capital gains within the zone can attract investors and promote wealth growth in a regulated environment. Imposing an exit tax on the exchange of Bitcoin back to traditional currencies can provide a new source of revenue for the government, which is beneficial to both federal and state finances. As part of the plan, USABTC envisions creating a pegged Bitcoin system on a Layer2 solution to ensure efficient and secure transactions. The proposal also outlines a phased approach for the U.S. to implement a tax-free digital economic zone, beginning with an executive order from the President authorizing the use of the Exchange Stabilization Fund (ESF), a tool of the U.S. Treasury originally established by the Gold Reserve Act of 1934. Subsequent phases will involve drafting legal opinions, legislative work, and extensive public outreach to ensure broad understanding and support. The Internal Revenue Service (IRS) will also play a collaborative role in establishing a strong legal framework and approving the proposed tax framework. It also explicitly prevents excessive government intervention by incorporating self-custody rights into law, an ongoing concern for many in the cryptocurrency community. As currently planned, the implementation phase of the USABTC program is expected to begin in 2025. If all legislative and regulatory approvals are obtained, the DEZ will be fully operational in 2026.

9. JPMorgan Chase: Bitcoin's current rebound is mainly due to institutional investors

According to The Block, on Monday, the cryptocurrency market suffered its most dramatic correction since the FTX crisis, with Bitcoin prices falling more than 15% at one point before rebounding. JPMorgan analysts said the rebound was mainly due to institutional investors, who have limited or no de-risking of Bitcoin futures despite overall market volatility. JPMorgan's futures position indicator shows a bullish outlook for these investors, analysts at JPMorgan wrote in a report on Wednesday. They said that the higher premium of Bitcoin futures to spot prices indicates that futures investors are confident. Analysts believe that there are many reasons for institutional investors to remain optimistic. Last week, Morgan Stanley allowed its wealth advisors to recommend spot Bitcoin exchange-traded funds to some clients. In addition, analysts said that the large-scale liquidations of Mt.Gox and Genesis bankruptcy may be over, and cash payments from FTX bankruptcy later this year may stimulate demand in the cryptocurrency market. In addition, they added that both major U.S. political parties have expressed support for favorable cryptocurrency regulation. However, analysts pointed out that these positive catalysts have been largely taken into account by the market. Analysts also pointed out that this round of Bitcoin's sharp decline was not caused by cryptocurrency-specific problems, but by the pullback of traditional risk assets such as stocks. While institutional investors helped support Bitcoin's rebound, retail investors also contributed to its decline. In addition, momentum traders such as commodity trading advisors also played a role, exiting long positions and establishing short positions. Overall, despite the recent adjustments, JPMorgan analysts remain cautious about the cryptocurrency market. Given that the above positive catalysts are largely taken into account and the limited risk reduction in the CME Bitcoin futures field, coupled with the continued fragility of the stock market, analysts recommend maintaining a cautious outlook.

10. Hong Kong Customs smashed a gang that used multiple shell companies to launder money with virtual currency, involving HK$1.5 billion

According to Radio Hong Kong, Hong Kong Customs smashed a money laundering group and arrested four people. They are suspected of using multiple shell companies to collect a large amount of overseas cross-border remittances and laundering HK$1.5 billion in black money through virtual currency transactions. All of them are on bail pending investigation, and about HK$2.2 million in assets in their multiple bank accounts have been frozen. Poon Ye-chin, investigation director of the Customs Organized Crime Investigation Bureau, said that the four arrested people involved a family of three and a local man, and a pair of Asian father and son in the family were the masterminds of the group. The investigation pointed out that they received large amounts of funds of unknown origin from overseas between 2020 and 2022, some of which involved overseas criminal activities. The two set up multiple shell companies in Hong Kong and transferred the large sums of money obtained in two years to more than 30 accounts in 7 banks, with the largest single transfer amount reaching 23 million yuan. Pan Yeqin said that the group would split the transactions and transfer the money to 180 third-party accounts. He also recruited another arrested 31-year-old local man with a monthly salary of 70,000 yuan to handle 300 million yuan of black money through virtual currency. He said that the Customs took the arrest action yesterday and searched 3 residential units and 1 commercial premises. Mobile phones, computers, bank cards and documents were seized during the operation. It is believed that the group has been successfully dismantled. Preliminary investigations believe that the cross-border funds came from South Korea.

11. 10x Research founder: US consumer borrowing capacity has reached its limit, which may pose a challenge to the cryptocurrency market

According to CoinDesk, Bitcoin is at risk due to slowing growth in U.S. consumer debt and rising credit card delinquencies. Markus Thielen, founder of 10x Research, said that although the unwinding of yen carry trades may have paused, stabilizing risky assets including Bitcoin, the slowdown in U.S. consumer borrowing remains a problem. Total U.S. credit balances increased by $8.9 billion in June, lower than the expected $10 billion, and credit card debt decreased by $1.7 billion, the largest drop since the beginning of 2021. The credit card delinquency rate reached 10.93%, the highest since 2012, and the auto loan delinquency rate also reached 4.43%, the highest since 2021. Thielen pointed out that these factors indicate that the borrowing capacity of U.S. consumers has reached its limit, which may pose a challenge to the cryptocurrency market. In addition, uncertainty in the U.S. election, economic slowdown and the decline in the artificial intelligence craze are also potential risks.

12. Trump’s second son: Beware of fake tokens, the official Trump project has not yet been announced

Eric Trump, the second son of former US President Donald Trump and current executive vice president of the Trump Organization, posted on social media, "Be careful of fake tokens. The only official Trump project has not yet been announced, and the news will be announced on Twitter as soon as possible." Earlier, Eric Trump, the second son of former US President Donald Trump and current executive vice president of the Trump Organization, posted on social media, "I really fell in love with cryptocurrency/DeFi (decentralized finance). Stay tuned for major announcements."

13. Bitcoin’s 30-day volatility hits highest point since March this year

According to data disclosed by IntoTheBlock, Bitcoin's 30-day volatility hit its highest point since March this year. The increase in volatility indicates a potential trend shift and increased market uncertainty.

The article is forwarded from: Jinshi Data