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Crypto SWOT: Bitcoin and Ether are headed toward their best month since 2021

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Optimism OP, rising 78.95%.

  • SEBA Bank AG, an online bank backed by Julius Baer Group that's focused on digital assets, plans to more than double its headcount in Asia, despite the recent route in crypto assets. The bank is seeking to increase its staffing to more than 20 in Hong Kong and Singapore from about seven now, reports Bloomberg.  

  • Alternative digital currencies are outperforming Bitcoin after the Federal Reserve reiterated its commitment to combat inflation with another sizeable rate increase. Investors' appetite for risk assets appears to have returned as the prices of so-called altcoins surged on Wednesday, Bloomberg explains. Ether was leading the pack, up nearly 11%.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Huobi Token, down 7.55%.

  • Bitcoin sank to a more than one-week low, pummeled by investor skittishness ahead of a looming Federal Reserve interest-rate hike and amid harsher regulatory scrutiny of the cryptocurrency sector. The retreat has put a dent in expectations for a sustained Bitcoin rebound and returned the token to a trading range between roughly $19,000 and $22,000, writes Bloomberg.  

  • Kraken, one of the world's largest cryptocurrency exchanges, is under federal investigation, suspected of violating U.S. sanctions by allowing users in Iran and elsewhere to buy and sell digital tokens. Kraken would be the largest U.S. crypto firm to face an enforcement action from OFAC sanctions against Iran, which the United States imposed in 1979, according to an article published by Bloomberg.

Opportunities

  • Crypto platform Voyager Digital LLC said a joint offer proposed by FTX and Alameda is a "low-ball bid" that disrupts the bankruptcy process. Sam Bankman-Fried proposed a restructuring deal to Voyager publicly. Under the plan, Alameda, Bankman-Fried's trading firm, would buy all of Voyager's digital assets and digital asset loans in cash at market value. Meanwhile, his crypto exchange FTX would offer customers of Voyager an option to receive their share of claims by opening a new account at FTX, writes Bloomberg.  

  • Bitcoin and Ether are headed toward their best month since 2021 amid a revival of risk appetite in global markets and optimism about an Ethereum network upgrade. Bitcoin is up 26% in July and Ether up 65%, though their rallies paused on Friday, writes Bloomberg.  

  • Variant, a venture capital firm that invests in the cryptocurrency sector, said it raised $450 million for decentralized web projects. The company whose founders include former Andreessen Horowitz employees, said that $15 million will be dedicated to seed investments, according to a Bloomberg article.

Threats

  • Coinbase Global is facing a U.S. probe into whether it improperly let Americans trade digital assets that should have been registered as securities. The SEC's scrutiny of Coinbase has increased since the platform expanded the number of tokens in which it offers trading, writes Bloomberg.  

  • Hackers are increasingly targeting financial firms such as banks and trading houses with attacks designed to use their computer systems to mine cryptocurrencies, according to cybersecurity firm SonicWall. The number of so-called crypto-jacking attacks on financial companies more than tripled in the first half from a year earlier. The overall number of such events rose 30% to 66.7 million, the report found.  

  • South Korea's Financial Supervisory Service is probing $3.4 billion worth of "abnormal" foreign-exchange transactions at two of the country's largest commercial banks for possible links to illegal crypto-related activities. Unusual transactions totaling 1.6 trillion won took place at five branches of Woori Bank between May 3, 2021, and June 9, 2022. Similar transactions worth 2.56 trillion won were detected at 11 branches of Shinhan Bank between February 23, 2021, and July 4, 2022, writes Bloomberg.
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