China: Player 2 has entered the game - Crypto Investor's Weekly 28.05-04.06

China’s back.??

By some measures China is already the world’s biggest economy and this week it turned its attention back to crypto.??

In the past, this moved mountains for the industry. But this time will its effect be like the hand of God or the Eye of Sauron???

Read our Tweet of the Week section for a deeper dive into China’s latest move.??

We dig into a new metric for working out what’s going on with Bitcoin, Europe’s inflation woes continue and Germany’s Deutsche Telekom plugs into Polygon.??

Here we go!??

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SMART VALOR publishes the company's Q1 Statements 2023?

As Europe’s first Nasdaq listed digital assets exchange, we’re committed to transparency and leading by example.?

?That means we have to open ourselves up to intense auditing, the highest level of regulatory scrutiny and publish reports every quarter.?

?We just published our Q1 report, where you can read about our partnership with #SweePay to give people the opportunity to buy crypto at any #Swiss national railway ticket machine, the sixth edition of Cryptosummit.ch, our brand new app and more.?

Full report in English. ?

Chart of the week?

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Source: Glassnode ?

Glassnode is one of the most well regarded institutions for tackling onchain data and one of their cofounders hinted that there’s the possibility for BTC to hit $35,000 in the mid term.??

Now this means we need to dive into the different kinds of price models, one of which is the realized price. This is the average price of all coins that have moved in the supply.??

James Check, the lead analyst at Glassnode doesn’t think this gives a fair impression as it takes into account many lost coins, even those held by the creator of Bitcoin, Satoshi Nakamoto, which represent huge profits and are unlikely to ever enter the available supply.??

When those lost tokens are removed from the equation they unmask what Check refers to as ‘tremendous losses held by active holders.” That’s billions of losses for people that bought in the previous cycle. ?

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According to this metric, that Check and his team called the Adjusted MRV Ratio, the true cost basis for all those economically active investors is around $32,000. In this sense, Check says he wouldn’t be surprised to see a rally to this point although this could also trigger a sell for investors who are just waiting to recoup their funds.??

This week’s crypto prices?

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T.S. Eliot said that April is the cruellest month, but then again, he didn’t have to worry about Bitcoin. After all, May was the month that BTC’s four-month price streak came to an end, with the cryptocurrency rounding off the month with losses of about 7%.?

Analysts think this latest period of lethargy could mean there’s some volatility in store now June is here. It’s interesting to imagine what could kick off the momentum given that the deal on the U.S. debt ceiling didn’t do much and that China’s latest hint at a crypto moment failed to make waves. More on that below.??

If feels a bit like bulls have lost control of BTC when we look at the relatively flat 20-day exponential moving average (EMA) of $27,273. If prices don’t rise above the low $27,000s we could see that volatility take form in some downward pressure and a drop down to the $25,000s. If bulls break this pattern, $30,000 could be the next big goal.??

Ether isn’t having much fun either at the moment. The lack of upward momentum show’s there’s not much demand at higher levels and bears are trying to sink the price. If that happens, it could fall to the mid $1,700s. The target for bulls likely remains to be $2,000.??

Tweet of the week??

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Source: Twitter ??

America tends to hog the spotlight in crypto. But there’s another player that wields huge influence, even though it’s not actively engaged in the industry at all: China.??

China is the whale in the room. No one wants to talk about it, but it’s there and a mere twitch of its tail sends ripples across the industry. Back in 2018, Xi Jinping hinted that blockchain would be part of the country’s future. In just one speech, a brutal crypto winter ended and prices went above $10,000 for the first time since the previous bull run.??

This tweet shows how China is softening its total ban on crypto, with a state news show hosting a segment on Bitcoin and Web3 in general. This comes at the same time as Hong Kong (now under more direct influence from China) brings back retail trading on Thursday, June 1. Beijing also launched a whitepaper to pump $14 million into the industry each year, as well as to create a hub in Zhongguancun, China’s homegrown Silicon Valley.??

It’s interesting because normally, this kind of pivot is enough to kickstart a bull run. The markets barely even noticed. This time the global macro is different. Stagflation is still global. Billions of people around the world are struggling with a cost-of-living crisis.??

Perhaps the uncertainty in the global economy is still spooking investors enough to chill the crypto markets. Or perhaps people have simply moved on from the idea that China or anywhere in its sphere of influence can ever truly play a role as a Web3 hub in its current form.??

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Crypto news??

Beijing releases white paper for web3 innovation and development?

Beijing, China's capital city, reportedly released a white paper this morning aimed at promoting innovation and development of the web3 industry.?

Full article: The Block ?

Euro-Area Core Inflation Eases But Won’t Stop ECB Hiking?

Euro zone inflation eased more than expected last month as underlying price growth also slowed, fuelling a debate about the need for further European Central Bank rate hikes beyond an increase later this month.?

Full article: Reuters ?

Germany’s Deutsche Telekom plugs in as Polygon validator?

One of Europe’s largest telecommunications companies is using its infrastructure to explore new revenue streams and boost network security as a validator for blockchain protocols.?

Full article: Cointelegraph ?

USDC Issuer Circle Has Ditched All U.S. Treasuries From $24B Reserve Fund Amid Debt Ceiling Showdown?

Stablecoin issuer Circle Internet Financial has ditched all U.S. Treasury bonds from its USD Coin (USDC) backing reserves as part of precautionary measures to protect from a potential fallout from the looming U.S. debt ceiling showdown.?

Full article: Business Insider ?

Olive-Oil Producer Issues First Euro-Stablecoin-Denominated Bond on Obligate’s DeFi Platform?

Lamar Olive Oil has issued an on-chain bond using Obligate in a first for the sustainable-agriculture industry, the Switzerland-based decentralized finance (DeFi) platform said Thursday.?

Full article: Coindesk ?

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And...there you go!??

Over the finish line at the end of the newsletter.?

We’ve been cheering for you the whole time. Now go hydrate and rest those weary eyes.??

See you next week.??

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