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Market Update 15 July 2023 : XRP Wins: The SEC Got Ripple’d , US Inflation Drops To 3%, Uniswap V3 Launches On Avalanche

Market Update 15 July 2023 : XRP Wins: The SEC Got Ripple’d , US Inflation Drops To 3%, Uniswap V3 Launches On Avalanche

XRP Is Not a Security

It’s about damn time! XRP has been declared NOT a security and Gary Gensler no longer has job security. XRP has been locked in a legal battle with the US Securities Exchange Commission (SEC) since December 2020. The SEC had accused Ripple, its CEO Brad Garlinghouse and co-founder Chris Larsen of launching the XRP token without first registering it with the securities regulator. It’s the legal battle we all thought would never end. Ripple has defended itself to the tune of $200 million, but if found guilty Ripple would have to turn over $1.3 billion to the SEC. This is the alleged amount Ripple earned from the token sale. $200 million is a small price to pay to protect the prize money. A US judge has finally ruled (partially) in favor of Ripple and XRP. 

With the verdict officially in, this is what you need to know:

  • Ripple launching XRP on exchanges for trading is not an investment contract, and therefore not a security
  • Ripple selling XRP to institutions is an investment contract, and therefore is a security

But crypto doesn’t care right now about the fine details. This XRP win is a win for the crypto market. Cos if XRP is not a security then almost all of the tokens that the SEC is currently arguing are securities, are most likely not securities. And it’s showing in price action. Just like that XRP exploded almost 100% and has lifted the entire market, mining stocks and all. 

XRP 24-hour chart (CoinDesk Indices)

So of course, the exchanges that delisted XRP feels a little left outta the party. And it’s not taken them long to have a change of heart. Coinbase and Kraken have already confirmed they will be relisting the XRP token. Whilst Gemini has said it will explore listing the token for spot and derivatives trading. That’s quite a turnaround. With just a little regulatory clarity, everything can change in an instant. For once, it’s a decision that’s on our side. Will this mark the start of a new bull market? An altcoin season? Only time will tell. But for now, this is a middle finger to the SEC, and it feels good!

 US Inflation Drops To 3%

We’re almost there! US inflation is down to 3% for June. That’s lower than expected and the lowest rate since March 2021. The S&P 500 and Nasdaq are both at their highest levels since April 2022. Even the UK’s FTSE 100 index celebrated its best day of 2023 upon the news.

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This certainly casts some doubt on whether the Fed should hike interest rates from here or stick with their initial pause. The dollar is falling, and the 2-year treasury yield continues to slide. But as we know central banks are notorious for overdoing it. Core inflation isn’t coming down as quickly as CPI, so it still remains high at 4.8%. This is something the Fed will be watching and could give them enough of a reason to hike again. Wells Fargo is anticipating that we still don’t see 2% inflation until 2024. The next interest rate announcement on July 26 will be interesting.

️ Brazil Planning CBDC Pilot On Ethereum

Central bankers lie, but the code does not. Brazil’s central bank is planning to launch its CBDC pilot on Ethereum. Well, sort of. The CBDC pilot is being built on a privately operated EVM-compatible blockchain called Hyperledger Besu. Of course, it is. But the source code has been posted to GitHub, and it reveals the truth. 

The CBDC will be programmed to: 

  • freeze and unfreeze accounts
  • increase and decrease account balances
  • move coins from one address to another
  • create or burn coins from certain addresses
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Mastercard, Visa and Mercado Bitcoin have already been announced as a consortium of 14 pilot participants. The CBDC will be pegged to the national fiat currency, the Brazilian Real and it will initially have a fixed supply that will gradually increase over time. Are you surprised?

With over 100 countries already working on CBDCs, it’s only a matter of time before they start to go live. The Bank for International Settlements (BIS) has published a new report that says by 2030 we could see a total of 24 CBDCs in circulation (wreaking havoc on us). This breaks down into 15 retail and 9 wholesale CBDCs.

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But where there is Bitcoin, there is hope. Brazil also happens to be one of the leading countries in Bitcoin adoption. Google searches are still at 2021 bull market levels and in May Brazil accounted for 15% of all Bitcoin Google searches globally overtaking the US. Google searches have also increased for the Lightning Network, increasing 760% from 2019 to 2022. The Brazilian Real is also the fourth most devalued currency against the US dollar in the past 10 years. And Brazil comes in second for the country that spends the most time online. So between inflation and internet usage, they’re a strong contender to lead the rebellion. 

 Vanguard Buys Up Bitcoin Mining Stocks

Index funds and chill just got a whole lot more interesting. Vanguard Group has upped its exposure to Bitcoin miners to a total of $560 million. There is no doubt the institutions are here for the halving. And they are accumulating. Vanguard already held Marathon Digital and Riot Blockchain shares but is sending a statement that they weren’t bullish enough on Bitcoin. Vanguard has increased its holdings in Marathon Digital by a whopping 60% from 10.9 million to 17.5 million shares. It also increased its holdings in Riot Blockchain by almost 18% from 15.2 million shares to 17.9 million. This means Vanguard now owns 10% of both Marathon Digital and Riot Blockchain. With these latest buys, it also makes Vanguard the largest shareholder in Marathon Digital. And get this, they now own more than BlackRock!

 Uniswap V3 Launches On Avalanche 

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It’s finally here: Uniswap on Avalanche. The proposal was first announced back in March and makes Avalanche the seventh chain Uniswap has integrated with. The integration allows users to swap tokens, become a liquidity provider, create a liquidity pool, and vote on governance proposals. Uniswap volume exploded in Q2 with $189 billion of trading volume beating out Curve Finance to the top spot. Uniswap is gearing up for its V4 launch which is expected to come in September. It aims to bring proto-sharding to the protocol but is dependent on Ethereum’s Cancun upgrade. With this integration, and much more to come from Uniswap, DeFi just keeps on getting bigger and better.

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