Crypto Market Forecast: Week of July 10th 2023

The price of Bitcoin (BTC) ended the week down 0.4%. The asset presently trades for ~US$30.3K. Ether (ETH) moved similarly dropping by ~2% to just under ~US$1.9K. Binance-coin (BNB) fell by 3.6% to ~US$235.

Bitcoin began the week well, topping off at ~$31.4K on Thursday, before dipping to just under $30K, also on Thursday. We might interpret that $30K as the present support level in light of the possibility of institutional players getting to trade Bitcoin spot ETFs in the near future.

BNC’s Kickstarter newsletter has documented the ongoing rhetoric from BRICS, ASEAN, and GCC communities to “de-dollarize” as the USD is increasingly seen as having a heightened political risk following the US and G7 seizure of Russian sovereign assets in Europe and the US seizure of Aghan central bank assets.

Russia, the “R” in “BRICS”, upped the game last week over the Twitter account of its embassy in Kenya. The embassy’s tweet stated that “The BRICS countries are planning to introduce a new trading currency, which will be backed by gold… More and more counties recently express desire to join BRICS.” (emphasis ours).

The announcement of a “planning” stage for a BRICS gold backed currency (rather than mere talks about the possibility) calls for more attention. As the world searches for a stable store of value during times of geopolitical uncertainty, a return from pure fiat to something resembling the days of Bretton Woods (which ended in 1971) is attractive – not only for BRICS countries but for prospective members and their trading partners.

An emerging story is a potential US$100 million exploit of the cross-chain bridging platform Multichain (formerly Anyswap). On July 6th, observers noticed that US$102 million worth of crypto had been withdrawn from Multichain’s Fantom bridge on the Ethereum side, as well as US$5 million from Kusama defi protocol Moonriver and US$666,000 from Dogechain.

Blockchain security firm Peckshield and other community participants alerted the ecosystem of the potential exploit. The hack was then confirmed the same day. The total funds lost by Multichain currently sits at a suspected US$126 million. This would make it the 6th largest DeFi hack ever.

In its last update on July 7th, Multichain posted on its twitter account “The lockup assets on the Multichain MPC address have been moved to an unknown address abnormally.” They recommend that all Multichain users revoke contract permissions and stop using the protocol.

It appears as though there is some silver lining, however, as US$63 million worth of USDC connected to the hack has been frozen. The Multichain chain hack follows the US$25 million hack of Polymarket which occurred on July 2nd.

Crypto news for the weeks ahead

July 12

The Consumer Price Index data for June will be released – one of the indicators the Federal Open Market Committee (FOMC) watches when considering interest rate hikes.

July 26

The FOMC will be meeting. Futures markets are strongly leaning towards a prediction of another 25 bps hike, thus bringing the interest rate target to 5.25 – 5.5%.

July 28

The US Bureau of Economic Analysis’ (BEA’s) release of June’s Personal Consumption Expenditures (PCE) numbers will be released. This is one of the primary indicators used by the FOMC when considering interest rate levels.

August 2

Litecoin’s (LTC’s) block reward will halve, dropping from 12.5 LTC per successfully-mined block to 6.25.

Top 10 Crypto Summary

Despite digital assets in BNC’s top 10 by market cap being “in the red” nearly across the board over a 7-day period, their changes were mostly sideways-changing, with OKB being the biggest “loser” for the week (down just 6%).

Bitcoin Price Chart

A GLASSNODE chart shows the present state of Bitcoin mining. We saw that in December (before Bitcoin’s price recovery from the FTX collapse), miners were struggling to remain profitable. However, now, GLASSNODE estimates a general production cost per BTC at $22.9K. With a BTC spot price at $30.5K, that leaves $7.6K in gross profit presently. Of course, these are standardized numbers as BTC production costs vary widely, and so do tax rates in different jurisdictions.