Crypto Market Forecast: Week of July 24th 2023

The Bitcoin price finished off the week down a marginal 0.9% and trades for ~US$30.2K. Ether (ETH) fell by ~2.3% to ~US$1.9K. Binance-coin (BNB) did likewise by 1.3% to ~US$244.

US Congressman Warren Davidson (Rep-Ohio) took to Twitter on Sunday (July 23^rd), to post an Indeed.com job announcement by the Federal Reserve Bank of San Francisco with the job title “Sr. Crypto Architect – Central Bank Digital Currency”.

Davidson’s tweet accused the Fed of “building the financial equivalent of the Death Star”. He argued that CBDCs “[corrupt] money into a tool for coercion & control” and called for the US Congress to “swiftly ban then criminalize any effort to design, build, develop, test or establish a #CBDC”. A press release from March on Davidson’s website also condemns state efforts to legalize CBDCs.

A quick search on Indeed.com reveals additional similar job announcements, including: “Product Manager – Central Bank Digital Currency” (from the Federal Reserve Bank of San Francisco) and “Lead Application Architect – Digital Currency” (from the Federal Reserve Bank of Boston).

Brave New Coin has covered CBDCs extensively in recent weeks – partially because CBDCs are generally seen as a top-down innovation intended to challenge the rise of cryptocurrencies. For more on this subject, see my article published by the American Institute for Economic Research (AIER), which highlights some of the risks.

US Presidential candidate Robert F. Kennedy (RFK) Jr. (Democratic Party) spoke as a special guest this past week to “super” political action committee (SuperPAC) Heal the Divide. The presentation contained a strong pro-Bitcoin message.

Kennedy stated that “The Kennedy Administration will begin to back the US dollar with real, finite assets such as gold, silver, platinum, and Bitcoin – which is the world’s hardest liquid asset – to strengthen the US dollar and guarantee its continued success as a world reserve currency. This will include US Treasury bills, notes, and bonds”.

Kennedy elaborated that he would begin small – with roughly 1% of issued T-bills would be backed by hard currency: gold, silver, platinum or Bitcoin – with a goal to increase the percentage annually. “Ironically, we will be able to use Bitcoin to save the US dollar”.

Also proposed was a capital gains tax exemption when converting BTC to USD, the right to self-custody, run a node at home, protections for developing privacy-enhancing technologies, and much more. (See full list).

Crypto news for the weeks ahead

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.

August 10

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

Top 10 Crypto Summary

Brave New Coin’s top 10 digital assets by market cap finished the week off mostly sideways, holding strong with simultaneous upward price pressure coming from (1) Bitcoin spot ETF applications (by BlackRock and others) and (2) a district court win for Ripple Labs against the SEC which ruled that XRP sales to individuals were not securities. Downward price pressure comes from ongoing regulatory uncertainty. XRP was the biggest “loser” this week, correcting downward by just under 4% after finishing off the previous week with a stellar 64% climb.

Bitcoin Price Chart

The supply of Bitcoin belonging to “long-term HODLers” has reached at an all-time high at 14.5 million total. Glassnode defines a “long-term” holder as 155 days (or five 31-day months). Definitions aside, an increase in the supply of Bitcoins over a longer time period can be seen as a key indicator of users seeing a longer-term future for Bitcoin, emphasizing the store of value proposition. It should be noted that some of these LTH’s may be accounts with lost private keys.