Cryptomarkets received a boost last week, finishing up 9%, following Federal Reserve Chairman Jerome Powell signaling that a first cut to interest rates in the US is on the horizon.
Powell, who was speaking at the annual Jackson Hole Symposium in Wyoming, said that “the time has come for policy to adjust.”
As we’ve seen in the past, looser financial conditions have generally boded well for risk-assets, crypto included, Simon Peters, cryptoasset market analyst at multi-asset investment platform eToro, said.
According to CME’s FedWatch, markets are now fully pricing in a cut to interest rates at the upcoming FOMC meeting on the 18th September.
The question now going forward is if this cut to interest rates will be 25 basis points or a more aggressive 50 basis point cut.
THE WEEK AHEAD
The latest US Personal Consumption Expenditures data is due to be released on Friday.
PCE is the Federal Reserve’s preferred measure of inflation.
A figure much lower than forecast could point to a more aggressive cut at the upcoming FOMC meeting in September.
EYE-CATCHING STORIES
Tether to launch UAE Dirham stablecoin
Tether, the company behind the USDT stablecoin, announced last week plans for a new stablecoin that would be pegged to the United Arab Emirates Dirham.
Stablecoins are cryptoassets whose value is pegged or tied to another asset, typically fiat currencies such as the US dollar, the Euro or commodities such as gold.
The proposed UAE Dirham stablecoin would join Tether’s slate of stablecoin products that include USDT, EURT, CNHT, MXNT, XAUT and aUSDT.
Each Tether Dirham stablecoin token would be fully backed by liquid UAE-based reserves.
The crypto industry has seen significant growth in the UAE in recent years.The addition of a stablecoin pegged to the Dirham domestic currency could encourage further adoption and inflows into the crypto space from the UAE.
The global market for stablecoins is currently valued at $150 billion, with USDT alone having a market cap of more than $115 billion. Industry projections see the stablecoin market growing to $2.8 trillion by 2028.
BlackRock spot ethereum ETF crosses $1 billion in net inflows
BlackRock’s spot ethereum ETF, iShares Ethereum Trust (ETHA) has become the first of the recently approved US ethereum spot ETFs to see $1 billion in net inflows, 22 trading days after launch.
This marks a significant milestone for the ethereum spot ETF, however the time taken to see $1 billion of net inflows is significantly behind the performance of BlackRock’s iShares Bitcoin Trust (IBIT) ETF, which crossed the $1 billion mark just four trading days after launch.
Net inflows of ETHA are more than the next three highest ethereum spot ETF inflows combined. Fidelity’s spot ethereum ETF FETH has only seen $375.4 million of net inflows since launch, Bitwise’s ETHW has taken $310.8 million and Grayscale’s Mini Ethereum Trust ETH has taken on $231.9 million.
Grayscale’s ETHE ethereum spot ETF, which converted from an investment trust and has the highest management fee at 2.5%, has seen just over $2.5 billion in net outflows.
Sony to launch its own blockchain
Sony, the Japanese multinational corporation famous for its Playstation consoles as well as other electronics, announced last week that they are starting their own blockchain.
In conjunction with Startale, the joint venture Sony Block Solution Labs will launch a public Ethereum layer-2 blockchain called Soneium.
The aim is to create an ecosystem that will bring Web3 technologies to everyday users, potentially entertainment, gaming and finance applications.
Soneium leverages the OP Stack and Superchain developed by the Optimism Foundation to create a scalable, Ethereum Virtual Machine compatible, developer-friendly blockchain.
A testnet is planned to launch on Wednesday so developers and creators can start experiencing the development environment of Soneium and build their own applications, the announcement went on to say.
