Tuesday, May 23, 2023

Hong Kong's crypto framework, rate expectations on the move, Covid again and more

“A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties.” – Harry Truman ||

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WHAT I’M WATCHING

• Hong Kong crypto regulation. An announcement earlier today from Hong Kong’s Securities and Futures Commission (SFC) announced that the proposed digital asset guidelines would come into force on June 1, with retail investors able to trade BTC and ETH on registered platforms. This is huge. More on this below.

• Rate hike expectations. They’re on the move again, this time heading up. A few Fed officials as well as JPMorgan CEO Jamie Dimon have heavily hinted that the Fed is far from done. Not good news. More on this below.

• Debt ceiling negotiations. They’re cutting it fine, and what a missed payment would mean for markets and US debt classification is still unclear.

• Covid in China. The XBB strain could produce as many as 65 million new cases a week by the end of June, according to a senior health adviser.

• Strike further expands adoption. Hard on the heels of the news that it is now available in 65 countries (up from 3 just a month ago), it appears that Bitcoin-based payments app Strike plans to support stablecoin USDT. This will significantly broaden the app’s utility, and reflects the broadening interest from many emerging economies in hedging currency volatility in BTC and USDT, as well as the potential for fast, seamless payments in areas without sophisticated digital fiat financial rails.

MARKETS