Fluctuating Slightly: Weekly Macro Market Performance & Impact Review by TokenInsight

The market continues to fluctuate slightly, and expectations remain basically unchanged. The bullish sentiment is relatively dominant, while the latest regulatory measures and responses from countries are mixed (but mainly focused on transactions).

Market speculation this week continued the downward trend of last week. From the perspective of volatility, as of July 9, the historical volatility of Bitcoin index prices and perpetual contracts have both fallen below 70, entering a low volatility range. The number of active addresses on the chain is also at the lowest level since July 2018. Most investors in the market are holding positions on the sidelines.

As the macro liquidity is not expected to undergo major changes in the short term, and most of the regulatory measures have been incorporated into the market, investors' expectations for the market this week have remained basically unchanged.

From the options data, there are relatively more call options in Bitcoin and Ethereum that expire on July 9th. At the same time, the mid and long-term skewness is in the process of turning from negative to positive, and optimism is gradually rising. But from the futures data, we can find that as market expectations have not changed, the basis of recent futures continues to be negative, and the risk of price decline is still included in futures pricing.

This week, various countries have released different policies and measures related to crypto. Some countries are committed to promoting compliance from crypto users and companies to varying degrees, while other countries emphasize the absolute status of sovereign digital currency (CBDC) and centralized trading markets.

Following China, the UK has also begun to restrict the transfer and trading of crypto assets. On July 6th, Barclays Bank announced the prohibition of transferring payments to Binance. Subsequently, on July 8, Santander announced that it would follow Barclays Bank’s relevant measures. Considering the UK's central position in FX derivatives trading and commodity trading, the decentralized trading market poses a potential threat to this position. Since last week, the unified measures adopted by mainstream British banks seem to echo the concerns of financial regulators that are wary of risks to crypto investors that go beyond the usual volatility of crypto asset trading.

• Russia, the Philippines, and other countries have introduced new policies to support the compliance process of crypto assets. The Philippine Stock Exchange (PSE) committee has recognized that cryptocurrency is an asset class, and the exchange should become a trading platform for cryptos in the Philippines. The exchange believes that they own trading Infrastructures and investors should be protected appropriately. The Russian government is currently formulating a set of national criminal law amendments to allow the authorities to confiscate cryptocurrency obtained through illegal activities.
• Countries such as China and Vietnam have emphasized the status of sovereign digital currencies (CBDC) on many occasions. Vietnamese Prime Minister Fan Myung-Chung asked the country's central bank to pilot blockchain-based cryptocurrencies in the next two years. The deputy governor of the People's Bank of China proposed that the typical representatives of private digital assets are cryptos such as Bitcoin, as well as various so-called "stable coins.” He believes these currencies themselves have become speculative tools, and there are also potential risks that threaten financial security and social stability.
• The expansion of the crypto assets payment field also faces more restrictions. For the first time, Sotheby's Auction House announced to accept Bitcoin auctions, and Visa plans to create its crypto ecosystem. But at the same time, countries such as Thailand and Iran are considering restricting the use of crypto assets such as Bitcoin and Ethereum for payment purposes. Although cryptos in some countries are in the process of compliance, their compliance is limited to investment and transactions, and there are relatively more restrictions on payment methods.
• As liquidity will not shrink significantly in the short term, cryptos’ further application and compliance have brought certain benefits to the market. Still, the concerns and related measures of the regulatory agencies of various countries on currency and financial sovereignty indicate that regulators do not want crypto assets to pose a challenge to the mainstream market in the payments or investment fields. This attitude may have a significant impact when the market returns to a certain size, so it is necessary to continue to be vigilant.