6 May

“One potential driver of ETH is its appeal as a deflationary asset, a topic Goldman’s Crypto desk recently explained. ETH’s value is a function of multiple factors, depending on one’s view of ETH as an asset – a store of value, means of exchange or a financial asset.

The London hard fork introduced changes to the fee mechanism, whereby the base fee paid for a transaction is burnt, decreasing the net ETH issuance. However, this heavily depends on Ethereum network activity: More on-chain activity = more ETH burnt. [Further], following the Merge, Ethereum’s transition to Proof of Stake reduced ETH issuance by ~90%.

On the back of these upgrades, the net ETH issuance is lowered by (i) the base fee burn and (ii) the decline in block rewards. This is what has led ETH to be referred to as ‘ultra sound money’.

Since the Merge (Sep’22), ETH has become an increasingly deflationary asset over the past months. In 2023 alone, ~374k ETH has been burnt. In April, daily ETH issuance was deflationary every day. This trend is on the back of increased on-chain activity, led primarily by DEXes, NFT platforms and stablecoins.”

See Also: Ethereum Gas Fee Surges to 12-Month High as PEPE Frenzy Grips Market

French bank BNP Paribas (BNP) is promoting the use of China’s digital yuan by linking wallets to bank accounts. The bank will also be exploring the use of the CBDC for smart contracts, supply chain finance and for cross-border payments.

BNP Paribas’ corporate clients will be able to connect to China’s central bank digital currency (CBDC) – or “e-CNY,” as it is known – through a connection to the Bank of China’s (BOC) system. BOC is one of eight banks authorized to handle China’s digital currency business.

The system will link clients’ digital yuan wallet to [their] bank accounts to enable efficient real-time and convenient use of the CBDC.”

See Also: China’s crypto stance unchanged by moves in Hong Kong, says exec

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“The U.S. added 253,000 jobs in April, up from a downwardly revised 165,000 in March and ahead of economist forecasts for 180,000. The unemployment rate was 3.4%, down from 3.5% in March and against expectations for 3.6%. The price of bitcoin (BTC) fell about 1% to $28,900 in the minutes following the news.

While Friday morning’s headline jobs number is a strong one, downward revisions to February (to 248,000 from 326,000) and March (to 165,000 from 236,000) knocked a total of 149,000 in gains from those two reports.

Though slowing modestly in recent months, the employment picture has remained strong, giving the U.S. Federal Reserve reason to continue to hike interest rates.”

The New York legislation could directly oppose some core tendencies of crypto companies to provide a range of activity, such as trading platforms, custody and brokerage services. That all-in-one approach would be counted as an illegal conflict of interests under the attorney general’s proposal. The legislation also seeks to ban marketplaces from keeping custody of customer funds.

The bill would grant the Attorney General jurisdiction to enforce any violation of the law, issue subpoenas, impose civil penalties of $10,000 per violation per individual or $100,000 per violation per firm, collect restitution, damages, and penalties, and shut down businesses engaging in fraud and illegality.

Andrew Hinkes, a partner at law firm K&L Gates, tweeted that the bill was “destined to fail” because it misunderstood crypto. It won’t be possible to apply the provisions to decentralized organizations, and the market doesn’t exist to offer the kind of auditing or insurances James is proposing, Hinkes said.

In the absence of federal oversight of crypto, New York has been a de facto leader in U.S. regulation of the industry – an approach that other states including California and Illinois have sought to follow but haven’t yet established regulations.”

See Also: White House to build international standards for DLT
See Also: U.S. Regulatory Crackdown Sees Institutional Investors Prefer Gold to Bitcoin: JPMorgan

“Lawyers for Voyager Digital say the bankrupt crypto lender will self-liquidate its assets and wind down operations after failing to clinch a deal on a sale to either FTX US or Binance.US. The announcement, made in a court filing on Friday, comes 10 days after Binance US abruptly pulled out of a $1 billion deal to purchase Voyager Digital’s assets following a U.S. government intervention to block part of it.

According to the filing, Voyager’s customers will receive an initial recovery of 36% of their crypto holdings – an abysmally-low recovery rate compared to both estimates of their recovery rate of 72-73% if either of the acquisition plans were successful, as well as recovery estimates for creditors of other bankrupt crypto platforms. Celsius’ creditors, for example, will receive an estimated 70% of their holdings.

The recovery rate could rise, according to the filing, if defunct crypto trading firm Alameda Research’s bid to claw back $446 million from Voyager’s estate fails.”

RBZ announced in April that the tokens, meant to combat its volatile local currency, will be issued on May 8. In March, inflation in Zimbabwe stood at 87.6% after hitting a high of 285% in 2022.

The central bank has split up the issuance and usage of the token into two phases. In the first phase, tokens will be issued for investment purposes and available for sale through banks. Tokens will be held in digital wallets or cards and available for person-to-person and person-to-business transactions in the second phase.

Holders of physical gold coins, at their discretion, will be able to exchange or convert, through the banking system, the physical gold coins into gold-backed digital tokens.”

See Also: Argentina’s central bank halts cryptocurrencies from payment apps
See Also: 3% Tax on Crypto Transfers Part of Kenya’s Proposed Budget: Bloomberg

Liquidity Cycle At A Key Turning Point That Will Now Push Markets Higher?