Binance Strikes Back and Dogecoin Boosts on X Speculation

1. Digital Asset Market: Binance, led by CEO Zhao, is seeking to have the US CFTC's complaint against them dismissed, according to Bloomberg. Meanwhile, Kraken is looking into customer complaints of delayed funds. Dogecoin (DOGE) has seen an increase in its price over the past two days due to speculation it will have a bigger role on the X platform, owned by Elon Musk. It is suspected that Twitter may soon accept doge coins, with Tesla already allowing customers to use DOGE to purchase merchandise.

2. Macro Economics: According to a CNBC analysis, International investment firms have frequently adjusted their GDP forecasts for China throughout the year, with JPMorgan making six revisions since January. The U.S. investment bank most recently cut its China GDP forecast to 5%, down from 5.5%. This followed similar cuts by Citi and Morgan Stanley. The average prediction among six firms now stands at 5.1%, close to Beijing's "around 5%" target. The frequent revisions come amid slower-than-expected growth and authorities' reluctance to embark on large-scale stimulus. Despite the near-term uncertainty, analysts expect growth in the world's second-largest economy to pick up in the longer term.

3. Equities: US stock markets showed mixed results on Tuesday as investors prepared for earnings reports from Microsoft and Alphabet and the start of the Federal Reserve policy meeting. US consumer confidence rose to its highest level in two years, US-listed Chinese stocks rallied on pro-growth messages from the Politburo, and European shares moved higher on resources firm gains. In Europe, the euro-area bank lending survey showed a record drop in loan demand, and investors await signals from ECB and BOJ decisions. Meanwhile, GM and GE raised their earnings guidance, and Rackspace, Goldman Sachs, and Walmart saw stock movements as a result of earnings and rating changes. Lastly, a recent survey found that 70.6% of consumers believe a recession is "somewhat" or "very likely" in the next year.

4. The Fed: The Federal Reserve has officially launched its FedNow instant-payments service, aiming to facilitate the faster flow of cash for businesses and individuals. The system, which will be available 24/7, is designed to provide instant access to paychecks, enable last-minute bill payments, and expedite government payments to individuals. Fed Chair Jerome Powell anticipates that as more banks utilize this new tool, the benefits to individuals and businesses will increase, including immediate receipt of paychecks and instant access to funds when an invoice is paid. 35 early adopters, including JPMorgan Chase and Wells Fargo, have signed up. As FedNow goes online, Fed officials are also studying the implementation of a central bank digital currency.

5. Geopolitical: The Russian government has officially passed a law to introduce a new digital currency, the digital ruble, in August 2023. This project is part of an effort to provide a tool against sanctions and a way to control government spending. The Bank of Russia will be the sole operator of the digital ruble platform and will be responsible for its functionality, safety, and correct accounting of transactions. In addition, the Bank of Russia can sign agreements with other central banks from within and outside Russia to facilitate transactions.

View from our desk

Elon Musk's endorsement of DOGE through platform X and his Twitter presence have breathed new life into the previously languishing coin. However, this momentum may be short-lived as we struggle to see a long-term value proposition for DOGE and similar currencies. Meanwhile, major players like BTC and ETH remain within their usual ranges, with no immediate price action expected due to muted flows as the market awaits fresh news.

In other significant yet underreported news, Russia has launched the official Digital Ruble. This development marks a significant stride in the global acceptance and integration of digital currencies, although it has surprisingly not garnered much attention from major news outlets. The introduction of the Digital Ruble could gradually shift global transactions away from the USD, reducing Russia's counterparty and sanctions risk with the US. However, we do not anticipate an overnight change but rather a long-term play.

On a broader economic scale, we maintain confidence in a softer landing than anticipated for the looming recession forecasts. Signs of recovery are evident in the housing market, and with interest rates stabilizing, investors are returning to various sectors. To sustain this positive momentum, it's crucial for authorities to facilitate the return of workers to physical offices, thereby reinvigorating the commercial real estate sector and its associated services.

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The 1Konto Team

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