Bitcoin Coming to Wall Street, ETH Continues flow out of Centralized Exchanges, Fed Minutes
Fed's 10th Rate Hike, DeFi Staking Boom, Crypto into Mainstream Finance
By @HooiTerrence
Chief Investment Strategist
The below is the opinion of the authors. Any conclusions are their own. This should not be considered as investment advice. Investing involves the risk of loss and returns are not guaranteed.
1.) Fed's 10th Rate Hike Signals Market Rally: Key Actions for Consumers
The Federal Reserve has recently announced its 10th interest rate hike since March 2022, indicating a continuous series of rate increases. As consumers navigate this changing monetary landscape, it is essential to consider the following actions in the meantime. The latest rate hike by the Fed represents the seventh consecutive increase witnessed in 2022.
June's CPI inflation came in at 3.0%, slightly below expectations of 3.1% and a decrease from May's 4.0%. The core index, excluding volatile food and energy prices, remained below 5%. Despite this positive development, there is speculation that the Federal Reserve might still raise rates in July, potentially marking the final hike for the year. The lower inflation figures provide the Fed with flexibility in their decision-making process.
Singular’s Take: The decision on interest rates will have implications for various sectors of the economy, including borrowing costs, investment decisions, and consumer sentiment. We will closely monitor the Federal Reserve's statement and subsequent communications for insights into their assessment of the economic landscape and potential policy adjustments. There is growing speculation that this forthcoming hike might be the final one for the remainder of the year.
2.) DeFi Staking Boom
This week, Staked Ether Surpasses $43 Billion as Yield-Hunting Investors Outpace Exchanges.
The amount of Ether held on centralized exchanges has significantly decreased since mid-April, while a substantial amount of Ether has been staked by investors, fueled by the Shapella upgrade during the same period. This shift towards staking has implications for the decentralized finance (DeFi) sector, as the Ether leaving exchanges could potentially boost the growth of DeFi platforms.
Ether staked reached nearly $44 billion, surpassing the amount held on exchanges like Coinbase and Binance
On Monday, the total value of Ether staked reached nearly $44 billion, surpassing the amount held on exchanges like Coinbase and Binance, according to data from Nansen. The decrease in Ether held by exchanges, currently at around 23 million, can be attributed to investor flight, which was further intensified by recent regulatory actions against major crypto exchange platforms. Conversely, the staked Ether has increased by approximately 4 million, surprising industry observers. This trend of rising staked Ether has exceeded expectations and indicates a significant shift in investor behavior, as more individuals are opting to stake their Ether rather than keeping it on exchanges.
Singular’s Take: This shift towards staking could have positive implications for the emerging decentralized finance (DeFi) ecosystem. However, the success of DeFi's growth largely depends on whether retail and institutional investors have gained sufficient confidence in on-chain finance.
3.) Bitcoin Coming to Wall Street
Institutions from the traditional finance sector had already begun exploring the world of cryptocurrency long before FTX faced significant challenges in November last year.
The potential entry of traditional finance into the crypto space could bring increased legitimacy and stability.
However, with the Securities and Exchange Commission (SEC) closely scrutinizing the remaining centralized exchanges, traditional finance (often referred to as TradFi in the industry) is now positioned to make significant strides and potentially capture market share. Some experts believe that, regardless of how nascent a financial development may be, it ultimately leads to Wall Street.
According to Schwed, a financial expert, banks and established financial institutions are inherently cautious and tend to lag behind due to their risk-averse nature. However, once there is clarity provided by the SEC or through legal systems, these institutions are expected to seize the opportunity and enter the market.
The potential entry of traditional finance into the crypto space could bring increased legitimacy and stability, as well as pave the way for further adoption and integration of cryptocurrencies into mainstream financial systems.
Singular’s Take: Existing Crypto companies will undergo significant transformations in the future. Those companies that are proactive, adaptable, and successful in attracting capital will reshape their operations based on the outcomes of the SEC lawsuits and regulatory developments.
Singular’s Action: Embrace the Power of Bitcoin: HODL on!
When investing, your goal is either price growth or stable returns. This applies to both growth stocks versus dividend-yield stocks and the world of crypto. While crypto can be seen as a "growth investment," currently, most investors aim to use it to earn more crypto.
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