The European Central Bank is expected on Thursday to leave interest rates at record highs but to imply that a cut in borrowing costs is likely by the summer
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Bitcoin has experienced a remarkable first quarter in 2024, as reported by Coinglass, with the digital asset surging by an impressive 64% over the quarter and by 13% in March alone.
This surge marks the seventh consecutive month of gains for Bitcoin. The introduction of spot Bitcoin ETFs in the United States has played a significant role, attracting over $12 billion in net inflows.
Furthermore, analysis of session data from Velo Data indicates that European trading hours have surpassed both the US and Asia in performance year-to-date. European sessions have seen a 34% increase compared to 30% for Asia and 14% for the US.
Notably, there was a significant spike on March 25, coinciding with the announcement by the London Stock Exchange (LSE) of the launch dates for Bitcoin and Ethereum Exchange Traded Notes (ETNs).
Looking ahead, a number of anticipated bullish events, such as the Bitcoin halving, the launches of LSE ETNs, and the potential introduction of Hong Kong ETFs, are expected to provide further impetus to Bitcoin’s momentum.
The post European trading hours lead global Bitcoin surge in 2024’s first quarter appeared first on CryptoSlate.
A man shelters from the rain under an umbrella as he walks past the Euro currency sign in front of the former European Central Bank (ECB) building in Frankfurt am Main, western Germany.
Kirill Kudryavtsev | Afp | Getty Images
The European Central Bank is set to hold interest rates at their current record high after its monetary policy meeting on Thursday — while investors are hungry for guidance on possible rate cuts.
They may be disappointed.
“The January ECB meeting this Thursday is, as usual, unlikely to deliver any policy changes or major policy messages, involving instead a reflection on the year ahead,” economists at Société Générale said in a Tuesday note.
Minutes from the ECB’s December meeting, released last week, showed that the central bank is highly unlikely to hike rates again, but that any discussion of easing is considered premature. The minutes suggest a status quo until at least June, Société Générale said.
Markets are nonetheless pricing in around a 60% probability of the first rate cut taking place in April, according to a Reuters analysis of LSEG data. High expectations for a March cut have been pushed back in recent weeks, but April pricing is staying put despite numerous ECB officials arguing that trims may be premature.
Dutch Central Bank President Klaas Knot told CNBC at the World Economic Forum in Davos last week that current market bets could be “self-defeating,” because “the more easing the market has already done for us, the less likely we will cut rates.”
ECB President Christine Lagarde told Bloomberg that she agreed with those who see a summer cut as likely, but stressed at the time that she remained “reserved” and data dependent in her final outlook.
Headline euro area inflation ticked higher in December, rising to 2.9% from 2.4%, largely due to base effects from the energy market. Core inflation fell to 3.4%, from 3.6%.
Price rises have cooled faster than some central bank officials expected, even as they emphasize that the job is not yet done. Many see risks from geopolitical volatility and the labor market, along with the need to wait until late spring for European wage negotiations to conclude.
Spring cut?
“Lower inflation and more balanced inflation risks” make the case for a policy pivot in April and cuts amounting to 125 basis points this year, economists at BNP Paribas said in a note out last week.
“The ECB will suggest on 25 January that it is closer to starting its normalisation cycle, we expect, but without signalling an imminent rate cut, nor declaring victory in the inflation fight,” they said.
UBS is calling an April cut — but not with confidence, Reinhard Cluse, chief European economist at UBS, told CNBC’s “Street Signs Europe” on Wednesday.
“I think you cannot be very confident about an April rate cut. We previously expected June, but then brought it forward to April,” he said, noting the need for further data releases.
“Now, indeed, with the hawkish commentary, particularly in Davos, we have signaled that the risks to our call that the first cut will already come in April has certainly increased,” Cluse said, adding that the ECB’s March meeting would be more significant than January’s due to the release of new staff projections on wages and growth.
Economists at Berenberg disagree with current pricing for a 25-basis-point cut in April and nearly 150 basis points of rate trims across 2024. The need to wait for wage data in April and May, as well as for a full set of growth and inflation staff projections at the end of the first quarter, makes it more realistic that cuts will take place in June, rather than in April, the analysts said in a Tuesday note.
Berenberg expects inflation to reaccelerate next year and for labor shortages to prevent a sustained fall in wage inflation, capping the ECB’s potential to ease policy.
Société Générale economists are taking an even more cautious approach.
“We have moved our first rate cut from December to September, but there is high uncertainty as regards the data, implying that no cuts this year is also a possibility,” they said Tuesday.
The comments echo those of ECB arch-hawk Robert Holzmann, who said at Davos that he “cannot imagine that we’ll talk about cuts yet, because we should not talk about it. Everything we have seen in recent weeks points in the opposite direction, so I may even foresee no cut at all this year.”
Christine Lagarde, president of the European Central Bank (ECB).
Bloomberg | Bloomberg | Getty Images
FRANKFURT — The European Central Bank meets this week with investors closely monitoring to see when the Frankfurt institution might start to cut interest rates.
It will be too early to declare victory in the battle against inflation, but with inflation at a two-year low, it certainly gives the ECB’s Governing Council breathing space to focus on another important issue: its gigantic balance sheet.
“Having reached its policy rate plateau at a 4% deposit rate, the ECB can now shrink its balance sheet at a faster pace without risking too much of a blowout in yield spreads within the euro zone,” said Holger Schmieding of Berenberg in a research note to clients.
“Nonetheless, markets will probably have to correct some of their overoptimistic rate cut expectations once the ECB has spoken this Thursday.”
Inflation plunge
Inflation declined to 2.4% in November and core inflation also has gone down. With inflation falling faster than expected, investors have increased their bets for ECB rate cuts next year, especially after one of the more hawkish members of the board, Isabel Schnabel, called the consume price slowdown “remarkable” and “a pleasant surprise,” according to a transcript of a Dec. 1 interview with Reuters.
Money markets are currently pricing in almost 150 basis points of rate cuts next year. The bank’s key deposit rate is at a record high of 4%, after 10 consecutive hikes that began in July 2022 and pushed rates back into positive territory for the first time since 2011.
“The risk is now earlier and larger cuts, and an ECB more capable of decoupling from the Fed,” said Mark Wall, an ECB watcher with Deutsche Bank.
But he believes the ECB will most likely keep its cards close to its chest: “We expect the ECB to keep the guidance that maintaining restrictive rates for sufficiently long will bring inflation back to target in a timely manner.”
PEPP roll-off
Looking ahead, there will be a new round of staff projections for inflation and economic growth in March, which will give the central bank more data to back their data-dependent policy approach and possibly give it room for rate cuts.
But this week, the main policy change at the conclusion of the ECB’s meeting on Thursday might come in the form of a shift in forward guidance — specifically when it will end reinvestments of its PEPP program.
The PEPP, or the Pandemic Emergency Purchase Program, is a flexible bond purchase program introduced during the coronavirus pandemic. The ECB reinvests any maturing securities it gets from its PEPP portfolio but that could soon change.
“We have indicated that we would continue reinvesting until at least 2024,” ECB President Christine Lagarde told European Parliament lawmakers on Nov. 27.
“This is a matter which will come probably for discussion and consideration within the Governing Council in the not-too-distant future, and we will reexamine possibly this proposal.”
Deutsche Bank’s Wall explained that “if rate cuts are moving forward, the ECB might accelerate the preliminary steps in the exit from PEPP reinvestments.”
European Central Bank President Christine Lagarde revealed that her son lost money investing in cryptocurrency, according to Reuters on Nov. 24.
Lagarde said that her son lost “almost all” of his investments by trading cryptocurrency against her warnings. During an event, she said:
“He ignored me royally, which is his privilege … And he lost almost all the money that he had invested. It wasn’t a lot but he lost it all, he lost about 60% of it … So when I then had another talk with him about it, he reluctantly accepted that I was right.”
Lagarde added that she has a “very low opinion of cryptos.” She said that although people are free to invest and speculate in the area, they should not be allowed to take part in business and trade that involves criminal activity.
Lagarde addressed an students at an event in Frankfurt, Germany. The event was titled Euro20plus and was organized by Germany’s central bank, Deutsche Bundesbank.
Lagarde is involved in ECB policy
Lagarde is otherwise involved with many of the ECB’s other activities concerning the regulation of cryptocurrencies, stablecoins, and digital assets.
In November 2022, Lagarde advocated for an update to Markets in Crypto-Assets (MiCA) Regulation called MiCA 2, which she said would be “broader [in] what it aims to regulate” than its precursor. MiCA applies to custodial wallets and exchanges and certain crypto assets and stablecoins. By contrast, MiCA 2 would address regulation of decentralized DeFi platforms and crypto assets without issuers, for example.
Though she had previously advocated for the MiCA 2 framework, Lagarde also discussed cited the then-recent collapse of FTX during that speech.
In October 2023, Lagarde issued a statement describing advances around the digital euro, a central bank digital currency (CBDC) that could provide a regulated alternative to cryptocurrency. She more broadly advocated for CBDCs in May 2023.
The post European Central Bank president says her son lost 60% of his investments trading crypto appeared first on CryptoSlate.
Fiat payment rails and neobanking services are becoming a vital cog in driving mainstream adoption and acceptance of the wider cryptocurrency space, according to key industry figures at the intersection of traditional finance and Web3.
Executives from OpenPayd, Ramp Network and Damex unpacked the increasing importance of third-party payment rails and banking platforms in conversation with Cointelegraph during the recent European Blockchain Convention hosted in Barcelona.
OpenPayd CEO Iana Dimitrova outlined how their firm processes over 3 billion euros of monthly transaction volume and has issued over two million accounts, including several prominent cryptocurrency exchanges, including the likes of Crypto.com.
As Dimitrova explained, OpenPayd’s core offering is banking and payments infrastructure for various industries including the cryptocurrency space.
“The reality is that there is a growing level of mistrust on behalf of both regulators as well as traditional holders of access to payment rails, whether that’s SEPA or SWIFT, banks or systems that manage the payment rails insofar as the crypto world is concerned,” Dimitrova said.
The CEO added that fiat on-ramps and payment rails could bridge the gap by addressing concerns around identity and traceability, “ergo money laundering,” which she says remains a perception held by traditional financial institutions and regulators.
Samuel Rondot, the managing director of Damex, unpacked how the Gibraltar-based firm specializes in providing fiat on and off-ramps for “higher risk category clients,” including iGaming, Forex, family offices and hedge funds. The company typically converts large amounts of cryptocurrency to fiat and vice versa in euro, British pounds and United States dollars.
Damex’s clients deal with reputational issues with their bank accounts on an almost daily basis because they want to interact with the cryptocurrency ecosystem. Pondering why banks remain “allergic to crypto,” Rondot suggests that the problem comes from a misunderstanding “of the tool and the principle.”
Related: Crypto payment solution Ramp expands on-ramp service, adds support for 40 fiat currencies
This has led to the creation of services like OpenPayd and Ramp, which are beginning to fill the role of specialist actors that understand and facilitate Anti-Money Laundering and Know Your Customer processes and act as a third party, “shielding” traditional banks from directly dealing with cryptocurrency-related businesses.
“Let’s say you do a crypto-to-fiat payment with an OpenPayd IBAN. You then move this money toward your main bank account. It’s a completely different process, and the bank will not have a problem with that,” Rondot said.
The Damex exec highlighted the importance of these services in carrying out the necessary due diligence, mixed with the willingness to do business with crypto-related businesses, to allow fiat to flow between traditional finance and decentralized finance ecosystems.
Szymon Sypniewicz, the co-founder and CEO of Ramp Network, outlined how its services offer a single application programming interface (API) platform to the global fiat system. Ramp’s API and software development kit provide access to a regulatory-compliant tech setup that allows users to buy and sell cryptocurrencies worldwide.
As Sypniewicz explains, Ramp’s infrastructure allows crypto-related businesses to offer credit cards, debit cards, local payment methods and bank transfer functionality for users to acquire cryptocurrencies or pay for services:
“The aim here is to make the transition to crypto-enabled products so smooth and seamless that people would stop noticing that they are now interacting with an entirely new tech setup.”
When asked how difficult it is for crypto-native businesses to open bank accounts or access payment rails, all three highlight the gap between emerging and existing financial technologies as a continual pain point.
“I guess one of the main challenges that we see is that the banking technology of incumbent banks does not really correspond to the level of innovation, speed and agility that all of their products and customers require,” Dimitrova said.
She adds that is a prominent reason why infrastructure providers that can aggregate different payment rails, different banks and different channels exist.
“We can go to Szymon and give him a single API and allow him to get access to multiple countries, multiple jurisdictions, multiple currencies and have an equivalent level of service and experience across the board.”
Sypniewicz adds that the difficulty of crypto-firms getting banked comes down to how specialized they are. Platforms like Ramp effectively act as “regulatory technology specialists,” aggregating dozens of global banking and payment provider partners.
“All the regulations that you need to specialize in to be able to meet the requirements are fundamentally met by us. The end-user is able to take their crypto, and interact with your platform, wallet, NFT marketplace, or new-generation DeFi products.“
Compliance standards are another prerequisite for wider adoption and acceptance of crypto-native businesses. Sypniewicz, Dimitrova and Rondot agreed that the European Union’s Markets in Crypto-Assets (MiCA) framework will provide a common framework for Web3 and TradFi players to operate more easily.
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One of the largest European crypto exchanges, Vienna-based Bitpanda has become one of the first foreign entities to receive a virtual assert service provider license in Norway. The announcement came on the company’s official X (former Twitter) account on Oct. 19.
Bitpanda holds a license in a number of European jurisdictions, such as Austria, Germany, France, Czechia and Sweden. According to the deputy CEO of Bitpanda, Lukas Enzersdorfer-Konrad, the registration marks another step in the company’s expansion in Europe:
“It is obvious that we in Europe need an investment platform that we can trust. At Bitpanda, we have set out to be that platform. Over the last 12 months, we have been the only European provider to receive licenses in Germany, Sweden and Norway. We now have more than 4 million users and enable Europe’s leading financial institutions and neobanks to offer digital assets.”
In May 2023, Norway, which remains outside the European Union, signaled that it could go its own way on crypto asset regulation. In its annual report, the central bank of the country stated that the upcoming pan-EU Markets in Crypto-Assets (MiCA) regulation “may not be adequate to all crypto regulatory needs.”
Related: UAE emirate launches new free zone for digital assets, Web3 and AI
Meanwhile, some major crypto exchanges continue to struggle with European regulators. In September, New York-headquartered Gemini decided to quit the Netherlands, citing the inability to meet regulators’ requirements. The problems don’t end within the European Union’s jurisdiction. The United Kingdom’s financial markets regulator, the Financial Conduct Authority, recently added 143 new entities to the warning list of non-registered asset providers.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.
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The United States-based cryptocurrency exchange Coinbase is strengthening its presence in Europe and has officially announced Ireland as its European crypto hub of choice.
Coinbase has selected Ireland as the location for its European Union entity to comply with Europe’s major cryptocurrency regulatory framework, known as the Markets in Crypto-Assets Regulation (MiCA), the firm announced to Cointelegraph on Oct. 19.
With MiCA, which is expected to be enforced in late 2024, Coinbase can serve one of the largest economies in the world, with 450 million people across 27 countries, under one regulatory framework and with one national supervisor, the firm said in the announcement.
Currently, Coinbase holds an e-money institution license and virtual asset service provider (VASP) registration in Ireland, a crypto license in Germany and several national registrations in other member states across the EU.
“We are delighted to select Ireland as our MiCA hub. Ireland has a supportive political environment for fintech companies, as well as a globally respected regulator,” Coinbase EMEA vice president and regional managing director Daniel Seifert said. He added:
“Ireland is a leading jurisdiction in this space, and we look forward to working with regulators in Ireland, Germany and beyond, to bring this industry to its full potential with the advent of MiCA.”
Nana Murugesan, Coinbase’s vice president for international and business development, said in December 2022 that the European Union’s political agreement on the MiCA framework has a significant role in providing one of the most significant regulatory frameworks for crypto worldwide. The exec also stressed that Coinbase’s VASP registration in Ireland demonstrates the company’s commitment and collaboration with the Central Bank of Ireland.
Related: Coinbase CEO slams Chase UK for ‘totally inappropriate’ crypto move
Coinbase has been actively working to expand its services in Europe in 2023 amid facing significant regulatory uncertainty. The expansion efforts have been accelerated even further after U.S. securities regulators sued the exchange in June 2023. In September, Coinbase secured an Anti-Money Laundering compliance registration from Spain’s central bank, which allowed the firm to offer its crypto exchange services for retail and institutional investors in compliance with the country’s laws.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.
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Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.
In this week’s newsletter, European securities regulators have published a report on the DeFi ecosystem that lists the risks it poses to the European Union’s financial system — but also highlights the benefits of DeFi.
Uniswap has launched Android wallet beta on Google Play, with the app gaining popularity among desktop and Apple iOS users. DeFi platform Star Arena recovered 90% of stolen Avalance (AVAX) tokens after offering a $250,000 bounty, and Platypus Finance fell victim to another flash loan attack.
The top 100 DeFi tokens had a mixed week in terms of price action, with most of the tokens trading in the same range or slightly higher than the last week. The total value locked in DeFi protocols hit $45.67 billion.
European regulator: DeFi comes with significant risks as well as benefits
The European Securities and Markets Authority (ESMA) — the EU’s financial markets supervisory authority — released an article on DeFi and its risks to the EU market on Oct. 11.
In a 22-page report, the ESMA admits the promised benefits of DeFi, such as greater financial inclusion, the development of innovative financial products, and the enhancement of financial transactions’ speed, security and costs.
Continue reading
Uniswap launches Android wallet beta for Google Play
Decentralized crypto exchange Uniswap launched a closed beta Android version of its mobile app on Oct. 12, according to a blog post from the app’s development team. Uniswap has previously only been available on PC and iOS mobile devices.
The new Android beta app allows users to select coins on different chains without switching networks. It automatically detects which network a coin is on and switches to that network without the user prompting it to. It can be used on Polygon, Arbitrum, Optimism, Base and BNB Chain currently, with more chain compatibility slated for the future.
Continue reading
Stars Arena recovers 90% of stolen funds after offering $257,000 bounty
Web3 social media platform Stars Arena said it has recovered nearly all of the crypto stolen from an Oct. 7 exploit, minus a 10% bounty to the person responsible.
In an Oct. 11 X (formerly Twitter) post, Stars Arena said around 90% of the 266,000 AVAX exploited, at the time worth around $3 million, was returned after reaching an agreement to give a 27,610 AVAX bounty worth nearly $257,000 to the exploiter. The bounty also included compensation for 1,000 AVAX worth over $9,000, which the exploiter apparently lost on a bridge.
Continue reading
Platypus DeFi loses $2.2 million in another flash loan exploit
DeFi protocol Platypus has lost over $2 million in assets after suffering another flash loan exploit on its platform. The protocol suspended all of its pools in response to the attack.
According to the blockchain security platform CertiK, the DeFi platform suffered three attacks, with $2.23 million taken across the exploits. On Oct. 12, the first attack took place, extracting $1.2 million from the platform. A second attack occurred hours later, stealing $575,000 worth of assets from the platform. Just a minute later, the third attack occurred, with $450,000 in assets lost.
Continue reading
Lido Finance discloses 20 slashing events due to validator config issues
Ethereum staking protocol Lido Finance has disclosed its protocol saw 20 slashing events due to a series of infrastructure and signer configuration issues from validators operated by Launchnodes.
The incident occurred on Oct. 11 at about 3:30 pm UTC, according to Launchnodes. In an Oct. 11 post on X, Lido said Launchnodes’ validators nodes are now offline, and slashings have ceased while the root cause was being investigated.
Continue reading
DeFi market overview
Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a mixed week, with most tokens trading in the green on weekly charts. The total value locked into DeFi protocols dropped to $45.67 billion.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
In a strategic move to bolster its European expansion, cryptocurrency exchange Kraken has announced its intention to acquire Coin Meester B.V. (BCM), a Netherlands-based digital asset broker. The planned acquisition follows the recent implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework, which governs the operations of crypto exchanges in the region, including […]
In a strategic move to bolster its European expansion, cryptocurrency exchange Kraken has announced its intention to acquire Coin Meester B.V. (BCM), a Netherlands-based digital asset broker. The planned acquisition follows the recent implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework, which governs the operations of crypto exchanges in the region, including the Dutch market.
Kraken’s Commitment to European Growth
In a blog post dated October 5, the United States-based exchange stated that the planned acquisition is a testament to its commitment to expanding its footprint across the European market. The company aims to leverage its robust financial position and highly competitive product offerings to achieve this goal.
While the financial specifics of the acquisition remain undisclosed, Kraken has already secured virtual asset service provider (VASP) licenses to operate in other European regions, including Ireland, Italy, and Spain. The company has also expressed its active pursuit of operational licenses from other European jurisdictions.
Establishing a Strong Presence in the Dutch Market
Kraken’s CEO, David Ripley, attributed the decision to expand into the Netherlands to the country’s thriving economy, high crypto adoption rate, and culture of innovation.
“This makes it a key market for us in our European expansion plans. The acquisition of BCM will give Kraken a sizable position in the Dutch market and will allow BCM’s clients to benefit from an even more robust product offering,” said Kraken CEO.
Ripley further emphasized that acquiring the crypto brokerage firm BCM would give Kraken a significant presence in the Dutch market and grant BCM’s customers access to various product offerings.
BCM’s co-founder and CEO, Mitchell Zandwijken, highlighted the company’s mission of making cryptocurrencies accessible to all. He noted that this acquisition would enable BCM’s customers to benefit from the extensive range of crypto options available on Kraken.
“We founded BCM because we wanted to make crypto accessible to everyone. Kraken is the pioneer in this field with a track record spanning well over a decade, making it the perfect steward for our business going forward. Our clients will benefit from all that crypto offers through Kraken’s continuous investment and innovation.”
Kraken Steps into the Netherlands as Binance and Gemini Depart
Kraken’s expansion into the Netherlands comes following the exit of two other prominent crypto exchanges from the market due to mounting regulatory pressure.
In September, Gemini, a leading digital asset trading platform founded by Cameron and Tyler Winklevoss, announced its withdrawal from the Netherlands. The company cited regulatory requirements imposed by the country’s central bank as the primary reason for its exit, urging Dutch users to withdraw their assets or transfer them to alternative wallets before November 17, 2023.
Another rival exchange, Binance, departed the Netherlands in June after its application for registration under the Dutch crypto authorization regime was rejected. Binance attributed its departure to its inability to obtain registration as a virtual asset service provider (VASP) with the Dutch regulator.
Nevertheless, both Binance and Gemini have expressed their intentions to re-enter the Dutch market in compliance with the new regulatory guidelines outlined in the MiCA regulation.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
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