A bit of good news to start the day, this from The Economic Times in India…
This is has been a topic that we’ve been watching particularly closely over the past few months as the central bank of India (the RBI) announced a ban on cryptocurrencies on April 6th.
Since then several crypto companies are challenging the prohibition in court and now it’s becoming clear that the RBI may indeed have overstepped its bounds as they are having difficulty explaining their actions.
The Supreme Court is set to hear the case on July 20th and we can expect a lot more information to be made public leading up to the hearing.
With a population of 1.3 billion people and very few cash transactions, India’s decision on how to regulate cryptocurrencies lies at the epicenter of the global debate. Should cryptocurrencies attain legal status it could affect the tipping point for global Bitcoin adoption.
Watch this space.
Today’s Highlights
Aggressive Fed Action
ECB up Today
Tether FUD
Please note: All data, figures & graphs are valid as of June 14th. All trading carries risk. Only risk capital you can afford to lose.
Traditional Markets
As expected, the United States Federal Reserve took action to raise the interest rate yesterday from 1.75% to 2%.
What was less expected were comments from the Fed that indicate a more aggressive path going forward and we can probably expect another two rate hikes this year.
Additionally, Fed Head Jerome Powell announced that starting January, he will be giving a press conference after every rate decision, a practice that was currently is only done intermittently. This should help the Fed steer the narrative around their policy and give them more room to maneuver.
The importance of these press conferences can be seen quite clearly on the graphs below. Here we can see the time of the interest rate decision marked with a purple circle. Notice how the prices of the Dow Jones, USD, and Gold all reversed their initial movements during the press conference that was held 30 minutes after the rate decision.
ECB Today
Following the Fed yesterday, the European Central Bank will deliver their interest rate decision early this afternoon, which will also be followed by a press conference with Mario Draghi.
The main item on the agenda is the quantitative easing program and what to do when it expires in September. There have been tals lately that the ECB will not renew the policy and that this could be the end of monetary stimulus in the European Union.
They are running a bit close to the wire on this decision as well. September is only three months out so investors really want to know if the QE program is going to be continued and in what capacity.
The Euro has slid significantly against the US Dollar in the last few months and if they do decide to exit the QE program, several analysts feel that it could recover a lot of this ground.
Tether in the News Again
A year ago, volumes of the stable coin Tether were rather insignificant. Today, they make up 15% to 20% of the total market.
This chart from cryptocompare.com shows the rapid growth in market share of the last six months. Tether is the blue area.
The controversy surrounding Tether was thrown into the spotlight again yesterday by the University of Texas who published a paper called…
The allegations that Tether has been manipulating the price of bitcoin are not new. In fact, the CFTC in the United States is currently investigating this very issue.
The timing of the report, on the other hand, does seem a bit suspicious as Bitcoin is currently testing some key levels of technical support. Good to see that Bitcoin is indeed bouncing off of those lows this morning.
It will be interesting to see how this plays out and what the CFTC ends up finding but ultimately, this shouldn’t affect the long-term path of the cryptocurrency industry.
Let’s have an amazing day ahead!
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About the Author: Mati Greenspan is a Senior Market Analyst at eToro
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