Crypto Market Forecast: Midweek Update 29th September

• The price of the industry benchmark Bitcoin (BTC) has risen by 4.04% so far this week. A key trigger for buying pressure this week has been the Bank of England (BoE) announcing a new bond repurchasing program.

• The BoE will suspend the planned start of selling UK government bonds, known in the market as gilts. The plan to temporarily buy long-dated bonds is to calm the market chaos that began after a sharp negative reaction to the UK government’s latest mini-budget strategy.

• Bond purchasing is associated with quantitative easing, a shift by policymakers to inject newly ‘printed’ money to stimulate the economy during downturn periods.

• The BoE has raised hopes amongst risk-driven investors. Have Central Banks hit an inflection point? Will they abandon their monetary tightening strategy which involves higher interest rates and more expensive capital?

• The mini-budget was released 5 days ago and brought forward a ₤45 billion tax cut package that will likely lead to heavy long-term borrowing. Concerns about how the tax cut would be financed led to heavy selling of British assets and investors fleeing British fixed income assets.

• The British government’s choice of a short-term fiscal policy centered on unfunded tax cuts has drawn criticism from economists and key stakeholders like the IMF.

Altcoin Watch

• The majority of the altcoin market, alongside Bitcoin, has benefited from the new short-term view of investors to switch risk-on. Ethereum (ETH) is up ~2.54% in the last week. Strong gainers on the last day include Binance-coin (BNB) and Uniswap (UNI).

• Google Cloud and the BNB Chain have recently partnered to provide developers with access to cloud computer services. The partnership will offer opportunities for new projects built on the Binance Chain like mentorship and enhanced technical support on Google Cloud platform.

• The partnership will see Binance’s BNB chain provide a portion of its supported blockchain projects with compensated access to the Google for startups Cloud Program.

• BNB, which supports the Binance BNB-Chain blockchain, has performed steadily in the last month. It is up 2% in the last month and has traded in a range between US$260-US$300.

What we’re looking at: The SEC-Ripple Lawsuit approaches an Endgame

The two-year legal battle between the Securities and Exchange Commission (SEC) and Ripple Labs looks set for a conclusion with both parties asking US District Judge Analisa Torres to come to a conclusion on the case through the filing of summary judgment motions.

This process will avoid the case going to full trial and will mean a hard decision will have to be made on whether Ripple is a security. Both views want the decision to be made on the evidence submitted by both parties so far.

In December 2020, the SEC sued Ripple Labs based on allegations that it had raised over $1.3 billion by selling XRP in unregistered securities transactions. Ripple denies that XRP qualifies as a security, claiming that the sale of XRP tokens never included an investment contract.

“The SEC’s untethered position would convert the sale of all types of ordinary assets — diamonds, gold, soybeans, cars, and even works of art — into sales of securities,” Ripple Labs explains in its filing for Summary Judgment.

While it is not yet certain that Ripple Labs will win the lawsuit against the sale XRP, the market is bullish on the conclusion of the legal battle. The price of XRP is up ~38.1% in the last month and it is significantly outperforming the rest of the crypto market.