Monochrome Monthly Recap | March 2023 - April 2023

Bitcoin regains USD$30k, marking highest price since June 2022

On April 11, Bitcoin reached USD$30,000 for the first time since June 10, 2022. This is a major milestone for Bitcoin, which had been battling to regain momentum after a year of decline. Many Bitcoin investors see the recent increase in price as a sign of revived interest and demand for the digital asset. This week, markets will be looking for signs that inflation is continuing its recent downward trend in the March Consumer Price Index (CPI), published on 14 March 2023, with some crypto-asset investors seeing bitcoin as a hedge against inflation and continuous currency debasement.

The surge in price has been associated with a variety of causes, including increased institutional interest and an optimistic perception of regulatory developments. However, given the volatile and quick fluctuations of the cryptocurrency market, caution is urged. When making investment choices, investors should thoroughly analyse market circumstances, regulatory developments, and methods for risk management.

CFTC sues cryptocurrency exchange Binance for alleged violation of trading rules

On March 27, the US Commodities Futures Trading Commission (CFTC) launched a lawsuit against Binance, one of the world's largest cryptocurrency exchanges. According to the lawsuit, Binance had allowed US consumers to trade cryptocurrencies without being registered with the CFTC, violating eight provisions of a commodities trading law “designed to prevent and detect money laundering and terrorism financing.”

According to Reuters, the US Justice Department has been investigating Binance since 2018 for potential money laundering and sanctions breaches. Since the lawsuit, the cryptocurrency exchange saw investors withdrawing overall $1.6 billion in crypto-assets from Binance and a decrease in market share after the exchange eliminated zero-fee trading on its platform.

The case highlights the rising regulatory scrutiny that crypto-asset exchanges face, as well as the need to comply with local regulatory regulations in the cryptocurrency space. Investors should keep a careful eye on local regulatory changes and assess how they could affect crypto-asset markets.

Finance giants foray into bitcoin

According to Forbes, two of the world’s top asset management firms, BlackRock and Fidelity, are setting the framework for the next Bitcoin bull run. Both BlackRock and Fidelity are apparently exploring cryptocurrency developments in the digital asset industry especially in areas most relevant to their client base such as permissioned blockchains and the tokenisation of stock and bond markets. This revelation comes as Bitcoin's price continues to rise, with some thinking that the recent collapse of Silicon Valley Bank may have worked as a catalyst for Bitcoin's price increase.

Nigel Green, CEO of the $12 billion financial advising business deVere Group, says ‘investors are looking for alternatives such as cryptocurrencies’ as a hedge against the current economic uncertainties in traditional finance markets.

The involvement of large asset managers such as BlackRock and Fidelity in the crypto-asset market has the ability to influence broader market sentiment and create more demand for digital assets.

As always, when contemplating investing in crypto-asset markets, investors should stay educated, thoroughly examine market conditions, execute sound risk management, and obtain professional advice relevant to their circumstances.

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