What happened last week
Throughout the week, focus was on mostly on inflation data in China and America and also the potential yen intervention, as the Japanese currency approached the critical 145 per dollar threshold. Chinese deflation concerns are persisting among traders, however according to PBOC China has not seen deflation and there is no risk of it in the second half of the year. The anticipation of key inflation figures and banking earnings likely capped the upside throughout the week.
The crypto markets saw Bitcoin strengthening its position, surpassing $31,000, as prospective Bitcoin ETF issuers re-filed their applications. Notably, Nasdaq refiling for BlackRock propelled Bitcoin's dominance in the crypto industry to nearly half of the market cap. A former SEC chair's statement that an ETF approval would be hard to resist if efficacy was proven certainly also aided the sentiment. Meanwhile, the NFT market faced a slump, with the Bored Ape Yacht Club's NFT collection experiencing a decline in floor price, indicating a growing disconnect from Ether's continued strong performance.
As the week progressed, markets experienced moderate gains across the board with investors maintaining a relatively optimistic outlook as signs for the American rate hiking cycle coming to end started to emerge especially at the CPI and PPI prints on Monday, Tuesday and Wednesday. China's CPI for June fell short of expectations, impacting Asian shares and raising concerns about the country's post-COVID economic recovery on Monday.
The mid-week update highlighted the release of US inflation figures, with expectations for the June Headline Inflation at 3.1% YoY and Core Inflation at 5%. These figures were crucial as the Federal Reserve's long-term inflation target sits at 2%. The news surrounding Bitcoin spot ETF filings continued, with the Grayscale Bitcoin Trust closing its gap to NAV.
As the week approached its end, Bitcoin's trading pattern remained range-bound, despite the decline in the June Core Inflation Rate. Uncertainty surrounding the SEC's approval of Bitcoin ETFs and the movement of bitcoins from US government-linked wallets played a role in the market's tepid reaction.
Finally, on Friday, the news circulated that Ripple had won its case against the SEC. This ruling had a significant impact on the crypto market, resulting in a, at the highest, roughly 100% appreciation but corrected to around 65% in the morning. The correction was likely a result of traders digesting the news as it was clarified that only XRP's private transactions offered to sophisticated investors constituted a securities sale whereas exchange trading was not deemed securities dealing. This also resulted in Coinbase and Kraken promptly announcing relisting of XRP. It is also important to note that the decision may get appealed. It remains positive news of course as the decision could also be helpful for others facing the SEC in court at the moment, for example Coinbase.
