Cryptos Subdued Ahead Of Jackson Hole Meeting

Cryptocurrencies edged lower in the past 24 hours amidst anxiety ahead of the Jackson Hole symposium scheduled to commence on Thursday. The Economic Symposium is a three-day annual international conference put on by the Federal Reserve Bank of Kansas City at Jackson Hole in the United States that would be attended by central bank leaders from around the world. The anxiety surrounding the monetary policy has been renewed with the Federal Reserve’s focus on inflation combat. Fed Chair Jerome Powell is scheduled to speak on Friday.

Overall crypto market has fallen to $1.05 trillion, and the 24-hour volume is close to $36 billion.

Bitcoin (BTC), the leading cryptocurrency has edged up 0.03 percent overnight to trade at $26,002.52. The 24-hour trading range was between $26,160.78 and $25,520.73. Though year-to-date gains exceed 56 percent, the dominant cryptocurrency has shed 10.5 percent in the past week.

The price movement comes amidst FBI’s warnings about North Korean hacker groups trying to offload stolen Bitcoins.

Ethereum traded between $1,659.17 and $1,596.38 in the past 24 hours. It is currently changing hands at $1,648.35, having lost 0.46 percent overnight. Ether is also grappling with losses of 9.4 percent over the past week. Year-to-date gains have fallen to 37 percent.

Bitcoin dominates 48.4 percent of the overall crypto market followed by Ethereum which accounts for a little less than 19 percent.

4th ranked BNB (BNB) added 3.6 percent in the past 24 hours. The cryptocurrency has shed 8 percent in the past week, lifting the year-to-date losses to 12.5 percent.

5th ranked XRP (XRP) added 1.1 percent overnight. It is however trading with losses of more than 12 percent on a weekly basis. Year-to-date gains have fallen to 53 percent. The cryptocurrency is currently changing hands at $0.5205, versus the recent high of $0.8875 touched in the aftermath of the partially favorable ruling against SEC.

7th ranked Cardano (ADA) has gained 1.4 percent overnight and 4.2 percent on a year-to-date basis.

8th ranked Dogecoin (DOGE) is trading with overnight gains of close to 1 percent. The meme-coin has erased 8.1 percent in the past week and 10 percent in 2023.

9th ranked Solana (SOL) has declined 0.5 percent overnight. Though weekly losses are close to 10 percent, year-to-date gains are more than 100 percent, which is highest among the top 10 cryptos.

10th ranked TRON (TRX) gained 2.4 percent overnight and 1.3 percent over the past week. TRX has added 39 percent in 2023.

Meanwhile a recent document published by the Bank for International Settlements titled “Financial stability risks from crypto assets in emerging market economies” throws light on the evolving landscape of digital finance and crypto assets with particular focus on emerging market economies.

The report examines how market risk, liquidity risk, credit risk, operational risk, bank disintermediation risk and capital flow risks resulting from exposure to crypto assets translate into financial stability risks. The report warns that as the degree of interconnectedness between traditional financial system and cryptocurrency markets become stronger, risks can easily spill over into the traditional financial system.
The report cites the 2022 Global Crypto Adoption Index to point out that crypto assets have been more intensively adopted in Emerging Market Economies than in Advanced Economies. The report released by Chainalysis shows that 18 of the top 20 positions correspond to EMEs. The only AEs in the top 20 are the United States in fifth position and the United Kingdom in 17th place.

The report analyses three alternatives to supervising crypto asset markets ranging from outright ban of crypto related activities, containment of connectedness between crypto markets and traditional financial systems and finally, the regulation of crypto markets. The report adds that regulatory frameworks offer incentives for regulated entities to adopt risk management and mitigation practices that promote financial stability as a public policy goal. Regulatory and supervisory authorities must coordinate to clearly define their roles and responsibilities, as well as accountability for the functions and activities that each authority must conduct, the report adds. Stressing on the principle of “same risk, same activity, same regulation”, the report also contrasts between activity-based regulation and entity-based regulation.

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