Headlines
▌Fed Maintains Interest Rates, Meeting Market Expectations
The Federal Reserve announced on June 12 that it would keep the federal funds rate target range unchanged at 5.25% to 5.50%, in line with market expectations. Additionally, based on the Fed’s dot plot, among the 19 officials, four believe there should be no rate cuts in 2024, seven anticipate one cut, and eight expect two cuts.
▌Fed Dot Plot: Predicts Only One Rate Cut in 2024
The Fed’s dot plot indicates that by the end of 2024, the federal funds rate is expected to be 5.1%, down from 4.6% in March; by the end of 2025, it is projected to be 4.1%, down from 3.9% in March; by the end of 2026, the rate is expected to be 3.1%, same as in March; and the long-term federal funds rate is estimated to be 2.8%, up from 2.6% in March.
Market Updates
According to Coingecko data:
BTC recent price is $68,219.04, with a daily change of +1.4%;
ETH recent price is $3,559.45, with a daily change of +1.7%;
BNB recent price is $619.10, with a daily change of +2.9%;
SOL recent price is $155.03, with a daily change of +3.8%;
DOGE recent price is $0.1462, with a daily change of +5.9%;
XPR recent price is $0.4916, with a daily change of +2.4%.
Policy
▌Fed Policy Statement: Making Slight Progress Towards 2% Inflation Target
The Fed’s policy statement notes a slight advancement towards the 2% inflation target, compared to the previous statement of “lack of progress” on May 1. The Fed believes that cutting rates before having more confidence in sustainable inflation reaching 2% is inappropriate. The economy continues to expand steadily, with strong job growth and low unemployment rates. The Fed plans to continue reducing its holdings of Treasury securities and mortgage-backed securities.
▌Powell: Confidence in Slowing Inflation Not Strong Enough for Rate Cuts, Patience Required
Fed Chair Powell stated that recent inflation data has shown some slowdown. He emphasized the need for more positive data to boost confidence in the anti-inflation process. Powell highlighted the significant progress made in the U.S. economy regarding employment and inflation. He emphasized that although inflation rates have moderated significantly, they remain high. Economic activity is expanding steadily, and GDP growth is expected to slow compared to last year. Job growth remains robust but slower than in the first quarter, with the labor market expected to remain strong.
Powell emphasized that a crucial factor in changing rate forecasts is inflation. Due to a halt in first-quarter inflation progress, the timing of rate cuts needs to be delayed. He stressed the importance of letting data guide decisions, highlighting that recent inflation reports have been better than expected by most.
Powell reiterated that the entire rate path is essential, not just the initial rate cut. The timing of rate cuts is a crucial decision for the economy.
▌Terraform Labs Agrees to Pay $4.47 Billion Fine to SEC
Terraform Labs reached a settlement with the U.S. Securities and Exchange Commission (SEC) agreeing to pay a $4.47 billion fine. According to the proposed final judgment, Terraform will forfeit $3.58 billion in illegal gains and pay a $420 million civil penalty, with its co-founder Do Kwon being barred from serving as an executive or director of a public company. Do Kwon must also pay $204 million to compensate harmed investors. In April, a New York jury ruled that Terraform and Do Kwon had engaged in deceptive practices in the sale statements of TerraUSD (UST), Luna, and wLUNA. The SEC subsequently motioned to recoup $5.3 billion in illegal gains and civil penalties. By the end of May, Terraform and co-founder Do Kwon had “principally settled” with the SEC.
Blockchain Applications
▌PYUSD Now Live on Injective Network
Injective Network has integrated Paypal’s stablecoin PYUSD, becoming one of the first Layer 1 networks to support stablecoins released by PayPal and Paxos. Users can transfer PYUSD from Ethereum and Solana to Injective, allowing dApps on the network to utilize PYUSD for quick payments, transactions, DeFi, etc.
▌Aethir Launches Decentralized Cloud Computing Network on Ethereum
Aethir, a blockchain project, has launched its decentralized cloud computing network on the Ethereum mainnet. The project aims to tap into underutilized graphics processing units (GPUs) for intensive tasks like AI model training and gaming. Aethir recently raised $120 million in a token sale.
▌Figure Introduces Blockchain Private Loan Market Figure Connect
Figure Technology Solutions has launched Figure Connect, a blockchain-based private loan market aimed at enhancing market liquidity through standardized sales terms and documents. The platform allows investors to commit funds before loan issuance and utilizes blockchain technology for increased transparency and immutability, reducing repetitive third-party audits.
Currently, Figure Connect has two loan originators, The Loan Store and Movement Mortgage, and two loan buyers, Bayview Asset Management and Saluda Grade. Figure plans to create a TBA market similar to the mortgage markets of Fannie Mae and Freddie Mac, boosting liquidity and lowering rates through standardization and collateralization.
Figure’s Chairman and Founder Mike Cagney is preparing for the IPO of Figure Technology Services and will serve as the CEO of Figure Markets, an upcoming crypto and securities exchange.
▌Chainlink CCIP Protocol Goes Live on Gnosis
Chainlink’s CCIP interoperability protocol and automation services are now live on the Gnosis network. Gnosis users can leverage Chainlink for cloud computing capabilities, transferring heavy computing tasks to the Chainlink network and reducing gas fees by up to 90%.
Cryptocurrency
▌Trump: Bitcoin Mining Is the “Last Line of Defense” Against CBDCs
Former U.S. President Trump took to Truth Social, stating that Bitcoin mining is the “last line of defense” against central bank digital currencies (CBDCs) and emphasized that Bitcoin should be mined in the U.S. Following this statement, Bitcoin mining stocks saw a general increase on Wednesday.
TeraWulf stock surged nearly 20% to $4.13 before settling at $3.96, around 14% higher than the previous day’s closing price. MicroStrategy and Hive Digital Technologies stocks rose by about 7% and 8%, respectively, while Iris Energy increased by approximately 3%.
▌Biden Campaign Team in Talks to Accept Crypto Donations via Coinbase Commerce
Sources reveal that the campaign team of U.S. President Joe Biden is discussing accepting cryptocurrency donations through Coinbase Commerce with industry participants. Coinbase Commerce allows merchants to accept payments in dozens of cryptocurrencies and has already facilitated crypto donations for former President Donald Trump’s campaign team, which started accepting digital currency donations last month.
According to anonymous sources, this discussion is the latest effort by Biden’s campaign team to explore how to attract crypto supporters before the elections. One source mentioned that the Biden team might be seeking sponsorship from well-funded crypto supporters. Another source collaborating with political figures and crypto industry leaders stated: “They are paying attention to the issues in the crypto industry and trying to find a quick way to show their support and prove that they are not adversaries.”
▌IBIT Trading Volume Surpasses $1 Billion Yesterday
According to HODL15Capital monitoring, data from the U.S. Bitcoin ETF on June 12 showed no inflow or outflow of funds for Grayscale GBTC.
Furthermore, IBIT’s trading volume exceeded $1 billion yesterday.
▌CryptoQuant: Bitcoin Transfers from Mining Pools to Exchanges Reach Two-Month High This Week
According to a report by CryptoQuant, as Bitcoin hovers around $70,000, transfers from Bitcoin (BTC) mining pools to exchanges have reached the highest level in two months this week. With Bitcoin halving reducing daily mining income, miners are looking to sell Bitcoin through over-the-counter (OTC) platforms to profit. On June 10, miners sold at least 1,200 Bitcoins, marking the highest daily trading volume in two months. Since early June, Marathon Digital has sold 1,400 Bitcoins worth $98 million. The report added that miners’ daily income has decreased by 55% from the peak of $78 million in March, now standing at $35 million.
▌io.net Market Cap Surpasses $500 Million, Hits All-Time High
Latest data shows that with io.net (IO) trending upwards, its market cap has surpassed $500 million, currently reaching $539,750,385, setting a new all-time high. Additionally, IO’s trading volume in the past 24 hours reached $1,744,035,412, with the fully diluted market value (FDV) surpassing $2.8 billion, reaching $2,840,791,499.
Key Economic Developments
▌JPMorgan: Risks Exist in Expectations of Fed’s First Rate Cut in September
JPMorgan economists stated that Wednesday’s consumer inflation report and the Fed meeting have increased the risk of a first rate cut in September, although their baseline prediction remains a rate cut in November. “Overall, while the median in this year’s dot plot was slightly surprising, we don’t feel drastically different about the Fed this afternoon than we did this morning,” wrote JPMorgan’s Chief U.S. Economist Michael Feroli in a report. “We still believe that the first rate cut in November, after this morning, the risks may tilt more toward September rather than December.”
▌CME: 91.1% Probability Fed Will Keep Rates Unchanged in August
According to CME’s “FedWatch”, the probability of the Fed maintaining rates in August is 91.1%, with an 8.8% chance of a 25-basis-point cut and a 0.1% likelihood of a 50-basis-point cut. The probability of the Fed keeping rates unchanged by September is 38.3%, with a cumulative 56.6% chance of a 25-basis-point cut and a 5.1% probability of a 50-basis-point cut.
▌Fidelity International: Unlikely Fed Will Cut Rates This Year
Fidelity International’s Global Head of Macro and Strategic Asset Allocation, Salman Ahmed, emphasized his fundamental prediction that there would be no rate cuts this year. The analyst stated, “If inflation continues to progress in the summer or if the labor market begins to show signs of pressure, we do see the likelihood of a rate cut this year increasing.” “Nevertheless, the U.S. economy still shows resilience, and today’s inflation data was influenced by sub-categories like auto insurance and airfares, meaning the threshold for initiating rate cuts remains high.”
▌Nasdaq, S&P 500 Hit Record Highs
The Fed, for the seventh consecutive time, kept rates unchanged, with Powell stating it’s not yet time to announce rate cuts. U.S. stock indexes closed with mixed gains, with Nasdaq up 1.53%, S&P 500 up 0.85%, and Dow down 0.09%. Nasdaq and S&P 500 both hit record highs. Major tech stocks saw mostly gains, with Tesla and Nvidia up over 3%, Apple up over 2%, reaching new highs, briefly rising over 6%, surpassing Microsoft in total market value; Microsoft up over 1%, Netflix, Google, and Meta slightly up; Amazon and Intel slightly down.
Golden Encyclopedia
▌What Are Validiums?
Validiums are a Layer 2 scaling solution designed to optimize Ethereum’s performance by processing transactions off-chain. Validiums handle most transactions off-chain and only send succinct proofs for verification to the mainnet, reducing the load on the Ethereum blockchain. The method of processing off-chain transactions significantly increases throughput and reduces mainnet congestion, leading to a more efficient and cost-effective Ethereum experience.
