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Gold gains traction as Fed hints at a pause after raising rates

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Gold gains traction as Fed hints at a pause after raising rates ¼%

The Federal Reserve concluded this month's FOMC meeting and as expected the Fed raised its terminal rate by ¼%. This takes the Fed benchmark rate to between 5% and 5 ¼%. Most importantly, after 10 consecutive rate hikes the Fed signaled that they may finally enact a pause of further rate increases at the next FOMC meeting in June.

This would allow the Federal Reserve to assess the damage from recent bank failures, and gauge inflationary levels which will lag behind rate hikes by the Federal Reserve. A pause would also allow the Fed to wait for a resolution over the US debt ceiling dilemma.

The rate hikes enacted by the Federal Reserve have definitively taken inflation down, it has also caused tremendous fallout. Continued rate hikes not only would have a detrimental effect on the economy but it would also have less of an effect on reducing inflation. Inflation has hit an area in which many sectors remain persistent or sticky and as such continued rate hikes would not have the intended effect of reducing inflation but would have the unintended effect of causing more harm to the financial system.

Gold futures broke out of their defined trading range between $1980 and $2020 yesterday. On a technical basis, prices were stuck inside of an asymmetrical triangle with a descending upper resistance line and a flat bottom. Yesterday's strong upside move took current gold futures pricing well above the upper-level resistance line. This resistance line proved to be definitive support as gold traded to a low of $2016 today which is precisely above the former resistance line which I now believe will act as a technical level of support.

The chart above is a 240-minute Japanese candlestick chart of June gold futures. It clearly illustrates both the flat bottom that is defined by multiple occasions in which gold traded to $1980 but close well above it. It also illustrates that gold has traded with a series of lower highs up until yesterday's breakout which took gold above its former resistance level.

As of 4:50 PM EDT gold futures basis, the most active June contract is up $25.10 and fixed at $2048.50.

Concerns about the banking crisis and the debt-ceiling remain unanswered

Now that the Federal Reserve has concluded this month's FOMC meeting, market participants will focus intensely on two major events that could lead to tremendous economic upheaval. There continues to be angst about the political standoff between the Democratic and Republican legislators regarding raising the debt ceiling. The fact that the government will not be able to meet its obligations much sooner than anticipated earlier is troublesome. More importantly, the divide between the Democrats and Republicans has never been wider which will make it very difficult for a compromise to be reached. As I've said over the last two days, during other instances where the debt ceiling had to be raised legislators played “kick the can down the road" however in this instance with so little time left to resolve the issue it seems are “playing a game of chicken".

Lastly, the banking crisis continues to be extremely worrisome as the possibility of more banks becoming insolvent remains. Collectively, the debt crisis remaining unresolved and the potential for more banks to become insolvent will have an exceedingly detrimental effect on the economy. These factors will continue to be highly supportive of gold moving higher.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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Gold surges as concerns of banking crisis and the debt-ceiling crisis re-emerge

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Gold surges as concerns of banking crisis and the debt-ceiling crisis re-emerge

With the FOMC meeting to conclude tomorrow the Federal Reserve will most likely announce a ¼% rate hike and attention has shifted away from the Fed as market participants focus on other potential calamities within the financial markets.

Genuine angst regarding the debt ceiling and concern about the re-emergence of the banking crisis has weighed heavily on the minds of market participants. These concerns are so significant that for the first time, the CME's FedWatch tool is indicating that there is a 15% probability that the Federal Reserve will cut rates at the June FOMC meeting. The CME's FedWatch tool predicts that there is an 85% probability that the Fed will pause rate hikes in June. If so, this would be the first time the Federal Reserve has either not raised rates, or cut rates over the last 10 consecutive FOMC meetings.

Debt ceiling anxiety grows after U.S. Treasury Secretary Janet Yellen in a letter yesterday said, “After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government's obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.”

This means that there is very little time left for a solution and compromise to be reached. Considering that the divide between the desires of the Republican Party and the Democratic Party are so diametrically different it is hard to fathom a compromise will be reached in such a short time.

More alarming is that there are very few days in which members of the House, and the Senate will all be available to meet with the president. Considering the compromise that must be made by both parties there is an extreme uncertainty that a solution can be reached promptly.

The implications of solving the debt ceiling crisis before the government is unable to meet its obligations are profound. The economic effect if the two sides cannot reach an agreement is an unprecedented event. The repercussions are at best an economic recession and according to Secretary Yellen would have profound implications in perpetuity.

Now that the government has less time than previously believed to raise or suspend the debt limit it increases the probability of an 11th-hour showdown. Historically legislators have played kick the can, but in this instance, they are playing chicken.

The net result of all of these events occurring at the same time led to in a tremendous upside surge in gold prices. Gold futures traded to a high today of $2026.40. As of 5:30 EST the most active June 2023 contract of gold is currently up over $25 and fixed at $2025.60. Gold broke out of a pattern called a “descending top and a flat bottom” as today's solid gains broke above the upper descending trendline.

By

Gary Wagner

Contributing to kitco.com

Time to Buy Gold and Silver

Tim Moseley

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What Is The State Of Crypto In 2023? A Paradox Unpacked

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What Is The State Of Crypto In 2023? A Paradox Unpacked. 

We are currently seeing an antithesis in the crypto world and its market. In one respect, proposed crypto regulations worsen; unbalanced, even nonsensical, and interest rates are increasing. Conversely, coins and tokens are hitting multi-month highs, and new crypto projects are raising billions. 

Crypto VC firm Andreessen Horowitz, also called a16z, unpacks this paradox in its State of Crypto Report for 2023. It was published on March 11, 2023, revealing which issues are holding crypto back and which cryptos are about to explode. This article summarizes a16z's report and explains what it says and means for the crypto market. 


Image source; a16zcrypto.com

The report begins with an overview of what's been happening in crypto. There's been progress in research and development, setbacks from crypto companies collapsing, prices have been following the crypto cycle, bad regulation is creating uncertainty, and decentralization is becoming an opportunity. Note that all of these are related.

Most of the setbacks we've seen have been due to centralization. This centralization occurred because some entities wanted to maximize crypto market cycle gains. It has resulted in harmful regulations, and decentralization is the only real solution to both problems. 

Why Web3 Matters

The report's authors explain that they view Web3 as being more than a financial movement; it's an “evolution of the internet.” They see crypto blockchains as computers, not just ledgers, and therefore see crypto itself as a computing platform, not just an alternative to the existing financial system. 

Replacing the existing financial system is arguably the top priority of crypto projects and their sponsors. If the existing financial system continues on its current trajectory, it will result in Central Bank Digital Currencies and the loss of our economic freedom. But it widens the scope for upcoming decentralized social market networks and their communities’ sovereignty and potential wealth.


Image source; a16zcrypto.com
 

The authors explain that Web3 is built on decentralized cryptocurrency blockchains like Bitcoin and Ethereum. It is governed and owned by the communities of their respective projects and accrues value to the community rather than a centralized tech company, as is the practice with Web2. 

The Crypto Market Cycle

The second part of the report is about the crypto market cycle. According to the authors, crypto market cycles are caused by a positive feedback loop. Prices go up, which drives interest to go up, which generates new ideas to emerge, which causes new projects to appear, which causes prices to go up. 


Image source; a16zcrypto.com

The authors say there have been four crypto market cycles so far. This is consistent with the market cycles driven by the Bitcoin halving, which happens every four years; however, there is no mention of the Bitcoin halving and the vital role it seems to play in crypto market cycles. Instead, they focus on financial and product cycles that also follow a four-year cycle. 

For reference, macroeconomic conditions, such as interest rates, drive financial cycles and can fluctuate unpredictably. By contrast, product cycles are driven by supposedly more predictable consumer behavior and tech trends. As stated in the report, great products get built regardless of financial upswings and downswings. 


Image source; a16zcrypto.com

Some would argue that consumer behavior and tech trends depend heavily on macro conditions. After all, most of the funding for speculative technologies happens during low-interest rate periods. As such, entering a new period of higher interest rates could be bad for more speculative crypto projects. 

Trends To Watch

The third part of the report identifies what trends to watch, saying that blockchains are scaling through multiple promising paths. The authors highlight new Layer 1 blockchains, like Solana and Aptos, application-specific blockchains, like Cosmos and Polkadot, Layer 2s like Optimism and Polygon, and data storage cryptos, like Celestia as areas of interest. 

The authors then applaud Ethereum for cutting its energy use by 99.9% by changing its consensus from Proof of Work to Proof of Stake, known as The Merge, in September 2022. They then highlight the comparison with YouTube’s energy consumption rather than Bitcoin. The authors pointed out that Ethereum consumes 0.001% of YouTube's energy annually. It seems like an odd choice, but maybe they had emerging decentralized social media in mind.  

They reviewed the rising popularity of zero-knowledge proofs, stating that once practically impossible new technologies are becoming very real. The authors then examined the rapid growth of Web3 gaming, which has remained relatively unscathed by the crypto bear market. They say that Web3 games are a huge opportunity to welcome new users to crypto. 

Similarly, it's worth mentioning Markethive, a social media, marketing, and broadcasting platform in the decentralized arena, is ramping up its gamification as a way to earn crypto and for people to familiarize themselves and experience the cryptocurrency landscape. 

Participation in DAOs has also been steadily increasing. The spike in DAO participation over the last few months may have been due to increasing regulatory uncertainty as well as all the exploits and issues that have resulted in emergency proposals. The recent de-pegging of USDC is one of the many examples.

Regarding developer activity, the authors point out that the United States is falling behind. The percentage of crypto developers in the country has been declining for years due to the initially uncertain and now outright hostile regulatory environment, which could continue for some time. 

The authors then say to watch for three proposed crypto regulations. They include the bipartisan crypto bill by Senator Cynthia Lummis and Kirsten Gillibrand, seven pending crypto cases, including the SEC's case against Ripple, and three proposed crypto rules, including the SEC's crypto custody rule.

 
Image source; a16zcrypto.com

Crypto Market Metrics

The fourth part of the report lays out a series of crypto market metrics. The authors begin with the above image, which essentially means, ‘If you build it, they will come.’ This popular approach to cryptocurrency adoption has been successful for many worthy projects.

The first crypto market metric is the number of active developers. They found that the number of active developers rises during bull markets and stays high during bear markets. The second crypto market metric is the number of smart contracts, which continues to hit new, all-time highs, despite the crypto bear market. 

The third crypto market metric is the number of academic research publications related to crypto. The number spiked in 2021 and again in 2022, indicating crypto has become a significant area of academic research. 

The fourth crypto market metric is the number of people seeking crypto-related jobs. This statistic peaked soon after the crypto market did in late 2021, suggesting rising crypto prices generate interest in the crypto job market. The number of people looking for crypto-related jobs has remained high ever since.

Crypto Adoption Indicators

The first indicator is the number of active crypto wallet addresses, which grows steadily as Web3 adoption increases. The same is true for the second indicator, the number of blockchain transactions, which also continues to hit all-time highs due to better scaling technologies reducing transaction fees. 

The third indicator is the amount of transaction fees paid. According to the graph in the PDF report, it’s been on the decline stating that fees increase as demand rises but decrease as scaling tech supplies more blockspace. 

A similar decline is seen with the fourth indicator, the number of mobile wallet users. The authors give one possible explanation: There are increasingly more ways to engage with blockchains and web3 applications. From DeFi to Web3 games, various new applications create addresses for users to interact with without downloading or connecting a wallet.

The fifth indicator is the amount of trading volume on decentralized exchanges. (DEXs) DEX volume has been rising recently, likely due to a crackdown on centralized exchanges. The most recent spike in DEX volume is plausibly from Curve Finance when it de-pegged USDC. 

The sixth indicator is NFT buyers. The number of NFT buyers appears to be rising again over the last few months, possibly because NFTs have decreased in price and new buyers have been buying the dip. Also, no official legislation applies specifically to NFTs, so they have been safe from regulations. 

The seventh indicator is stablecoin trading volume which continues to grow. This could be due to the crackdown on centralized exchanges and the loss of trust crisis after FTX collapsed in late 2022.  


Image source; State Of Crypto 2023.pdf

What’s Next?

The last part of the report is aptly titled, What's Next? The authors commenced by estimating that crypto adoption is where internet adoption was in the 1990s, specifically, the mid-90s. Assuming crypto adoption follows the same trajectory, they forecast it will take until 2031 to hit one billion users. 

As per the image above, the authors list 12 things they expect to happen in crypto in 2023 and beyond. The first expectation is that some of the best Web3 products and protocols will be developed during the remainder of the crypto bear market. 

The second is that smart contract security will improve. The authors don't discuss the role of AI in this equation, but it can be used to create and audit crypto code. This will supercharge crypto development and security, providing it’s used ethically.

The third expectation is that zero-knowledge proofs will continue to become more popular. This makes sense, considering institutional investors require financial privacy, which is something that zero-knowledge proofs can provide.

The fourth expectation is that big tech will continue to take greater control of the Web2 internet, showing the average person just how vital Web3 is. We've covered this in the Markethive blog in the context of internet censorship; decentralized social media is the only solution. 

The fifth expectation is that Web3 gaming will become more popular. In short, there are three reasons why people adopt cryptocurrency; speculation, convenience (possibly necessity), or entertainment. That third adoption category has yet to be tapped, but it's coming. 

The sixth expectation is that there will be more crypto-specific hardware, particularly for zero-knowledge proofs. As blockchains have attracted millions of users, two critical demands around privacy and scalability have emerged. There is a movement to optimize algorithms for consumer-grade hardware to preserve decentralization and privacy.

The seventh expectation relates to the fourth: decentralized social networks will become popular due to issues with centralized social media. As previously mentioned, with all the internet censorship and more coming, trust in institutions and legacy media is declining rapidly, and more people will migrate to decentralized platforms. 

Interestingly, the eighth expectation is that “light” clients will make it possible for mobile devices to become more involved in crypto infrastructure. As a fun fact, over 90% of people access the internet from a mobile device. Logically, this means bringing crypto to mobile is a massive untapped opportunity. 

The ninth expectation is that there will be new forms of community governance in DAOs. Many believe that the existing token-based voting systems are leading to centralization; what's required is a radically new approach to governance.

The tenth expectation is that governments will pass bipartisan crypto regulations. This is a direct reference to US crypto regulations, but it could well apply globally.  It won't take long for politicians everywhere to realize that crypto is an economic and social opportunity, never mind all the crypto lobbyists wielding influence with incentives.

The 11th expectation ties into the fifth, and that's that non-speculative crypto use cases will emerge. Hopefully, these non-speculative use cases are related to convenience and not necessity. If they relate to need, it's probably because we're dealing with some seriously dystopian issues. 

The twelfth expectation is a relatively new phenomenon: hiring treasury management and sustainable funding will be a focus for DAOs. This seems to be a subtle reference to a new crypto niche called ReFi or Regenerative Finance, which involves investing in tokenized carbon credits. 


Image source; State Of Crypto 2023.pdf

What Does A16z’s Report Mean For the Crypto Market? 

One of the takeaways stated in the a16zcrypto overview of the report states that,

“Prices have steadied this year from the dizzying highs of 2021. The industry seems to be settling: speculation has cooled, and the story of how people durably, organically use, and interact with Web3 is starting to unfold.”

To others, the report reveals a lot more about how institutional investors are seeing the crypto market rather than how the crypto market is doing or how it's likely to perform in the future. Institutional investors are interested in being on the cutting edge of Web3 and cryptocurrency. However, they're also interested in ensuring they have some say in running these projects and protocols. This is fundamentally at odds with their decentralization imperative. 

It is also why institutional investors are so focused on crypto regulation. Some argue that they don’t care about how these regulations impact financial freedom. Ultimately, they want to know how to legally invest in and influence these projects and protocols.

The incumbents are hyper-aware of this and are actively trying to prevent sensible crypto regulations from being passed. They know that the actual end game of the crypto lobbyists is to replace the old financial system with a new, primarily centralized financial system, not a new decentralized one. 

A prime example is Circle; the stablecoin issuer has been aggressively lobbying politicians worldwide to pass regulations that set up its stablecoin as the gold standard and ban the circulation of decentralized stablecoins. This is not in the best interests of crypto; it is a blatant traditional finance tactic. 

That said, mass crypto adoption won’t happen overnight. Most proposed crypto regulations may be inconsistent with cryptos' core philosophies, but they are a necessary first step. Over time the centralization issues they cause will become more evident, and better crypto regulations will be passed. 

More importantly, the average person will start to understand the significance of things like decentralization. But before they understand the importance, they must know what they are and be comfortable with the associated annex. This will take years, per the author's projections. 

The upside to this situation is that we are, in fact, still in the early stages of crypto adoption, considering the relative absence of crypto regulations in developed countries. Ultimately, crypto regulations are required for institutions to invest in the industry; realistically, institutions have most of the money. They have the means to turn the crypto into a multi-trillion dollar asset class.

A Favorable Scenario

According to Coinbureau, the best part is that retail investors like us will eventually have the advantage because most understand there's more to crypto than paper money profits. The institutions don't see it that way, meaning they will sell every time a coin or token hits some arbitrary number in fiat currency terms. Meanwhile, retail investors will continue to buy regardless of the paper price, and for once, they won't be the ones getting dumped on. 

The money institutional investors get in return will lose value until it's converted into a CBCD, and all their assets will be tokenized on a blockchain the government controls. And when their CBDCs and tokenized assets are frozen because they did or said something against the state, they'll realize that crypto is the only asset that offers true financial freedom. By then, it'll be too late for them. All the retail investors who realize this early on will become the new institutional investors.

In closing, the report has identified an opportunity that recent setbacks emphasize the failure of opaque, centralized systems in contrast to the resilience of decentralized infrastructure. Decentralized crypto computing platforms can also counter the trend of power consolidating into the hands of a few giant tech corporations. The internet needs web3, and those who understand this will fight for the future of these technologies.

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

Tim Moseley

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Gold silver back off after better-than-expected US manufacturing reports

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Gold, silver back off after better-than-expected U.S. manufacturing reports

Gold prices are moderately lower and silver has lost all the big early price gains in midday U.S. trading Monday. Some upbeat U.S. economic data and positive remarks from the head of the largest U.S. bank worked to pressure the two precious metals markets. June gold was last down $8.10 at $1,990.90 and July silver was down $0.006 at $25.25.

(By the way, I encourage you to check out my new daily item, "Kitco daily macro-economic/business digest." If you need to be up to speed quickly on the latest news that's impacting or has the potential to impact the general marketplace, this report can be your one-stop shopping. Check it out and let me know what you think.)

The gold and silver markets saw selling pressure develop at mid-morning, right after the U.S. ISM April manufacturing purchasing managers index (PMI) and U.S. construction spending reports came in better than market expectations. Also, JP Morgan chief Jamie Dimon said in a conference call after JP Morgan took over the failed First Republic Bank that the U.S. banking sector is now very healthy. Earlier, some safe-haven demand in gold and silver was seen following the weekend news the FDIC shut First Republic in the second-largest U.S. bank failure ever.

On tap this week is the Federal Reserve's Open Market Committee (FOMC) meeting that begins Tuesday and ends Wednesday afternoon. Gold and silver traders today reckoned fresh on the FOMC members' minds will be today's better U.S. manufacturing data, which favors the monetary policy hawks. The FOMC is expected to raise the key U.S. interest rate by 0.25%. The European Central Bank also meets Thursday. The ECB is also expected to raise its main interest rate by a quarter-point. Also, on Friday comes the U.S. employment situation report from the Labor Department. Corporate earnings reports continue to flow out this week, including Apple's results.

  S&P 500 will crash 20% as 'panic' sets in and gold hits $2,300 in 2023, Fed will cause 'more tremors' in banking sector – Gareth Soloway

Global stock markets were mostly higher overnight. Some European markets were closed for a holiday. U.S. stock indexes are mixed at midday. The U.S. stock index bulls had a good week last week, including the S&P 500 and Nasdaq indexes on Friday closing at technically bullish weekly and monthly high closes.

The key outside markets today see the U.S. dollar index solidly higher. Nymex crude oil prices are lower and trading around $75.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.551% and up today. These three markets were daily bearish elements for the gold and silver markets.

Technically, June gold futures bulls have the firm overall near-term technical advantage. However, a price uptrend on the daily bar chart has been negated. Bulls' next upside price objective is to produce a close above solid resistance at the April high of $2,063.40. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at $2,000.00 and then at today's high of $2,015.40. First support is seen at $1,980.90 and then at $1,965.90. Wyckoff's Market Rating: 7.0

July silver futures bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the April high of $26.435. The next downside price objective for the bears is closing prices below solid support at $23.00. First resistance is seen at $25.80 and then at $26.00. Next support is seen at $25.00 and then at last week's low of $24.735. Wyckoff's Market Rating: 7.0.

July N.Y. copper closed up 495 points at 394.00 cents today. Prices closed near mid-range. The copper bulls and bears are on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 418.65 cents. The next downside price objective for the bears is closing prices below solid technical support at the January low of 372.45 cents. First resistance is seen at today's high of 400.50 cents and then at 405.00 cents. First support is seen at today's low of 387.05 cents and then at the April low of 381.65 cents. Wyckoff's Market Rating: 5.0.

By

Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Mastercard launches Crypto Credential for a more secure verified blockchain experience

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Mastercard launches Crypto Credential for a more secure, verified blockchain experience

  Mastercard has announced the launch of Crypto Credential in an effort to establish a set of common standards and infrastructure that will help attest trusted interactions among consumers and businesses using blockchain networks.

According to the announcement posted on Friday, Crypto Credential is being created to provide a way for trusted, compliant and verifiable interactions to take place on public blockchain networks in order to bring more legitimacy to the blockchain industry.

“With Mastercard Crypto Credential, we can help ensure that those interested in interacting across Web3 environments are meeting defined standards for the types of activities they’d like to pursue,” the press release said. “Mastercard Crypto Credential will not only define verification standards and levels, but also provide necessary enabling technology to help bring more use cases to life.”

One benefit of the new service is that it allows for the creation of easy-to-remember aliases to help consumers share wallet addresses with one another. This helps to improve the consumer experience and reduces the potential for errors.

Crypto Credential will also “bring richer information to blockchain transactions through metadata, helping to define attributes of a wallet to help ensure that transactions are completed as intended,” Mastercard said.

The service will utilize CipherTrace’s suite of services to verify addresses and support Travel Rule compliance for cross-border transactions. Mastercard has partnered with crypto wallet providers Bit2Me, Lirium, Mercado Bitcoin and Uphold to enable transfers between the U.S and Latin America and the Caribbean corridors.

The payments firm has also joined forces with ith public blockchain network organizations Aptos Labs, Ava Labs, Polygon and The Solana Foundation to help introduce the application to developers in their ecosystems. “Together, we’ll collaborate to enhance verification in NFTs, ticketing, enterprise and other payments solutions,” Mastercard said.

This new service is just the latest cryptocurrency-related endeavor to be announced by Mastercard as the firm has been one of the most active multinational financial service providers in the crypto space in recent years.

In October, the firm announced the launch of ‘Crypto Secure’, a new crypto service desk focused on helping banks identify and prevent fraud from occurring on crypto merchant platforms. Later that month, the company launched ‘Crypto Source’, a new program that enables financial institutions to begin offering secure crypto trading services to their customers.

In January, Mastercard partnered with Polygon to launch the Web3-based Mastercard Artist Accelerator program, which is designed to help up-and-coming artists get established and connect with fans in the Web3 arena.

By

Jordan Finneseth

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Gold market is in ‘buy the dip’ mentality until Fed’s messaging analysts watching Powell’s banking sector comments – analysts

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Gold market is in 'buy the dip' mentality until Fed's messaging, analysts watching Powell's banking sector comments – analysts

Gold is stuck in a tight range, with the "buy the dip" mentality dominating the market. Investors are keenly watching the Federal Reserve's widely expected 25-basis-point rate hike next week. But if markets interpret the messaging as a "hawkish pause," gold's rally could re-start, according to analysts.

The gold market is looking to wrap up April with a slight gain of 0.7% after reaching a 13-month high of above $2,050 an ounce earlier in the month. At the time of writing, June Comex gold futures were trading up 0.13% on the day at $2,001.60 an ounce.

"Gold is going to remain a buy-the-dips market until we get a few things ironed out as far as the economy is concerned," Walsh Trading co-director Sean Lusk told Kitco News.

Gold's rally failed at an important level, which might mean there is still a deeper setback to come, Michael Boutros, senior technical strategist at Forex.com, told Kitco News.

"Gold reached the 2022 high-day close at $2,049 and then posted a reversal lower," Boutros said Friday. "The $1,966 is the line in the sand, and we tested it last week. If we fall below that, a deeper washout to $1,912-$1,919 is possible. I would love to see that hold."

The objective in May is to find that exhaustion low before the next leg up in the gold price rally, said Boutros.

The Fed meeting: 'The devil is in the detail'

Markets are currently pricing in an 83% chance of a 25-bps hike on Wednesday, according to the CME FedWatch Tool.

"From the Fed's standpoint, the devil is in the details. The 25 bps is heavily priced in," Boutros said. "Commentary will be key. The big thing to look for is if the Fed will start to mention the banking system and issues like the First Republic Bank troubles."

The banking sector turmoil is not over yet, Boutros warned. "The heavy emphasis will be on whether the Fed sees cracks or risk of contagion," he noted.

Media reports were circulating at the end of the week that the U.S. government was leading rescue talks for First Republic Bank.

Markets are still pricing in rate cuts later in the year, but the majority of analysts are having trouble reconciling the market's expectations versus the Fed's obligation to keep fighting the elevated inflation.

"Inflation won't be going away any time soon, which is why the Fed is not going to cut rates," Lusk said.

What the Fed can do is sit on its hands, which will be viewed by the gold market as the much-needed pause in its rate hike cycle.

"Gold positioning is at less than 50% of its peak, suggesting upside risk once the Fed signals the end of the current hiking cycle," said Suki Copper, precious metals analyst at Standard Chartered. "We expect a hawkish pause."

Many see the May hike as the last one in this tightening cycle, with Boutros stating that a June rate increase is likely off the table.

Gold's fundamentals are bullish: Analysts look for $2,100 on the upside

The gold sector is the safe place many choose to go into for cover amidst all the market uncertainty, said Lusk.

"There is the perfect storm to the upside for gold still. Some headwinds for the economy here are housing and growth. The stock market will have a lot of trouble navigating to where it was. A lot more flows will go into gold sooner rather than later. Gold is a great asset to park money and find some safe haven within the market. Dips will be bought here," he explained.

From a technical perspective, gold's first major support is at $1,950-40, and then $1,925, said Lusk.

On the upside, Lusk's targets are $2,060 and then $2,100, which will be 15% up on the year. "Above that, the $2,190 area is 20% on the year — that's my ultra-bullish upside target," he said.

Another event to watch next week is the U.S. employment report from April, with markets looking for job growth to slow to 178,000 positions added from March's 236,000. The unemployment rate is expected to tick up to 3.6%.

Other supportive gold drivers in the longer term are the debt-ceiling suspense and geopolitical tensions, analysts added. "Geopolitics is not at the forefront right now, but it will be an X-factor moving forward," Boutros said.

 

Data next week

Monday: U.S. ISM manufacturing PMI

Tuesday: U.S. factory orders, JOLTS job openings,

Wednesday: Fed meeting, Powell press conference, U.S. ISM services PMI, U.S. ADP nonfarm employment

Thursday: ECB meeting, U.S. jobless claims,

Friday: U.S. nonfarm payrolls

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Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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8 Altcoins set to EXPLODE HUGE NEWS Best Crypto to Trade amp Invest?

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8 Altcoins set to EXPLODE (HUGE NEWS)! Best Crypto to Trade & Invest?

 Apr 30, 2023  , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 

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8 Altcoins set to EXPLODE (HUGE NEWS)! Best Crypto to Trade & Invest?

The altcoin space is about to get out of control. Here are my top 8 altcoins making huge news for accomplishing huge Milestones, pay very close attention to all eight coins in this list. If you like, crypto, give this video a like comment: what coins we should include on a list like this in the future without further Ado, Aptos is a layer 1 blockchain that uses key elements from Facebook's former blockchain DM launched in October 2022, with a mission to Redefine the web3 user experience today, Aptos is landing some of crypto's biggest strategic Partnerships.

Mastercard, the future of identity is web 3 and Aptos is partnering with MasterCard to make that future a reality with MasterCard's crypto credentials, program, and on-chain identity and verification framework, with a variety of applications in payments, remittances, ticketing, and NFTs as a master card credentials. Partner Aptos will support the infrastructure for identity security, trust, and verification tools that enable the free flow of funds between individuals and across borders.

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So this program kicks off with remittances between the United States, Latin American countries, and Caribbean countries. In addition, Aptos is partnering with the likes of Google, exciting news, Aptos and Google are back at it again this time with Google's web3 startup program. This collaboration will provide startups with the support and resources needed to develop the infrastructure Bridge platforms and Foster the future of Web 3.

The Google Cloud web3 startup program gives Web 3 startups The Tech Community and the resources they need to explore serious Innovation over reliable infrastructure, enabling the evolution of dapp's web retooling services and more at scale. Aptos is on a mission to bring Web 3 to the masses, and this program is a major step toward that goal.

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For more on this Google partnership, let's hear from the co-founder of Aptos himself Aptos is a layer, one blockchain. It's been designed with evolution in mind. Allows you to support all the use cases of web3 to build applications seamlessly when we think about Aptos and how it's positioned in the market as a network. We want it to be a network that stands the test of time. Its infrastructure and infrastructure need to be reliable, it needs to be scalable and it needs to continue to evolve.

I see the Aptos and Google Cloud partnership, giving users and developers infrastructure that allows them to build easily with things like big query developers, and the ecosystem feels very confident. Google Cloud can help us go to market faster in three ways. The first is developer tooling. The second is ecosystem funding and support, and the third is continuing to support the network growth and providing continuous infrastructure and reliability.

Two industries that are really well positioned to take advantage of Web 3 and aptos's network, our gaming and social media gaming experiences continue to push the boundaries to share experiences with people in multiplayer environments across the world, and now you can share digital assets with those players.

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Gamers, don't want their experience to be disrupted. You need a network that works really well, it has fast throughput, it has extremely low latency and it has infrastructure. That's completely reliable. Google Cloud and Aptos together can provide that. What we're excited about at Aptos is to help bridge these different platforms connecting people together.

That's the original vision of the Internet. Aptos wants to remain a network that can help bring that Vision to life and we're excited to partner with Google Cloud to make that a reality. You might think you know Cardano. I do think you know this Cardano makes our list today because they have a huge development Milestone coming up, it's called Aiken, it's a new programming language. This will take Cardano's capabilities to the next level by orders of magnitude.

I don't think the broader crypto ecosystem truly understands what's about to happen to Cardano over the next few months. Cardano'S core Tech has always been great, but the major limiting factor has been the developer experience. Those shackles are now about to be completely removed, buckle up a new programming language, that's not Haskell. What's all this about to help answer your questions, let me play you a short clip from a fellow YouTuber and crypto educator. Red spark he's more technically minded.

He breaks down what this new Cardano update is all about. Give him a like give him a follow. He puts out great crypto content, Aiken called Dano the Cardinal-specific language written to make smart contract development a lot easier. Now, for those of you who aren't familiar with Akin, it's a new programming language that was developed as it became obvious that programming in Haskell wasn't quite right. The good thing about Aiken is that it takes inspiration from a lot of other well-known languages and really tries to get the best of every world into one package.

Now, if you like this person and thought Cardano's, smart contracts had to be written in Haskell. While this is a common misconception, the current Cardinal node implementation does indeed happen to be written in her school Cardona uses something called a uplc okay. This is what's actually used by Cardinal smart contracts. Haskell simply just compiles down to uplc Haskell compiles into uplc and you can have other languages compiled into uplc. Ublc does not need Haskell, okay, so that's why we're able to have a language such as Aiken?

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It's just another way of writing code in a language, and then the compiler will take that code and compile it down into uplc, and I've seen some interesting benchmarks with Akin and these other languages that are popping up whereby they actually compile down into much smaller.

A more efficient file than the official Haskell-based Plutus language, which I thought was quite interesting algorand, is an altcoin that if you subscribe to us, you certainly understand the basics of algorand. By now today, I want to highlight a travel app-oriented project building on Algorand, which shares the three reasons why they chose Al Grant to build on instead of Ethereum from Cointelegraph reporter Rachel Wolfson's podcast.

Why? You guys chose to build on top of Algorand, which is a blockchain network, which is a wonderful blockchain network instead of using something like Ethereum, for instance, mainly because of three reasons.

The first one is the performance. They do have an extremely good performance. The Sigma one is the cost we travel has a very lower Martians. We really needed a network that had really low costs. So that's another reason why we have chosen the algorithm and the third one is that algorithm is a carbon-neutral chain and especially in the travel industry, but we believe that that's extremely important avax makes our list today.

They've been firing on all cylinders for a while. Now we've been keeping you updated on a vax for a while now, yet the price of the token is still disconnected down five percent. Yet over the last 90 days, daily, active users have up Revenue up core development up, do not sleep on polygon.

If you watched our video from just the other day, you understand why a polygon is going to be such a big deal. Their Google partnership accelerates the adoption of core polygon protocols using Google's infrastructure and tools, transforming the blockchain landscape forever, again check out this video.

If you want to learn more about injective protocol, making great strides injective protocol is a decentralized exchange that offers cross-chain margin, Trading derivatives, and Forex Futures Trading. The injective protocol is built on Cosmos blockchain as a layer 2 app.

The protocol uses cross-chain Bridges which allow traders to access cryptocurrencies from other platforms such as Ethereum polka, dot, and Binance, and as I said throughout this bear Market they've been making great strides most recently in just a few days. The injective ecosystem witnessed integration with seller Network Bona Fida deployment, testnet, and smart contracts. Integration with a polka dot project asked our Network and Polka dot assets.

Protocol Talus beginning to create the first nft marketplace with injective unmatched progress, as always by the way make sure you subscribe to our channel daily videos. Just like this keeping you informed on the entire cryptocurrency Market, if you're interested in making money in cryptocurrency subscribe to our channel's daily videos, are you bullish on the altcoin Phantom? I am because a phantom crypto bank is coming. The block bite boys explain this. This has to be very exciting, for all Phantom holders is Phantom opening a crypto bank.

So I hit up Andre this morning and said: hey. Can you tell me more about this and his response to me was if you're asking whether or not Phantom has obtained a banking license and is launching a crypto-friendly Bank. The answer is yes that is happening. So here's what I was given that I can share with you is that it is a crypto-friendly bank. It's going to not really be a retail-facing bank, it's a little way out.

It's probably like a year out like hey. This is actually something that's happening. They've been building this out very quietly for quite some time, very, very intelligent move on behalf of Phantom.

I know no details behind a sort of the setup of the bank itself, but like what an interesting move on behalf of the Phantom Foundation, given all the Regulatory and banking shutdowns we've seen over the last month and a half again, I want to hear from you comment Your thoughts below, let's have a conversation in the comments section. What coin would you add or subtract to today's list?

Make sure you get your tickets to Bitcoin Miami Conference this month. May we will be there using code altcoin daily for 10 off your tickets? Our final pick in today's video is ICP internet computer protocol. Let me know if you want me to do a deeper dive into ICP crypto in the future. It is different from a lot of other blockchains.

Even Mark Cuban recognizes this Warren Buffett. Has this a great thing? First are the innovators then there are the imitators, then there are the idiots did you know Mark Cuban mentions this? One blockchain in particular is different than others. They're all there, all Forks of each other.

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There's not a lot of innovation. There yeah, you can talk about some of them. You know, maybe the ITP likes to think that they're a lot different in some ways. They are the chains, no, that there is no room for a hundred different blockchains. There is no room for 20 different, horizontal blockchains.

if you want to look at vertical applications that are specific to you know, maybe ICP and others that have specific ways of doing things that have applications that are better suited for those changes. Okay, maybe the total number will grow.

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Tim Moseley

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DeFi Needs More Than Synthetic High-Yield Products

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DeFi Needs More Than ‘Synthetic High-Yield Products’: Dragonfly’s Haseeb Qureshi

The venture capitalist discusses non-ZIRP monetary policy, rebooting crypto’s market structure and why Ponzi bubbles always burst.

By Daniel Kuhn

AccessTimeIconApr 28, 2023 at 2:33 p.m. MST

Updated Apr 28, 2023 at 2:54 p.m. MST

NEAR on What's Next for Web3, Protocol Village, Austin, Texas, USA - 28 Apr 2023

Haseeb Qureshi of Dragonfly at Consensus 2023 (Shutterstock/CoinDesk)

 

Haseeb Qureshi is a managing partner of Dragonfly Capital, a well-watched crypto venture firm, and the moderator of one of crypto’s best podcasts, “The Chopping Block.” Both are roles he takes on with equanimity and poise. In the aftermath of the Terra fiasco, Qureshi wrote one of the most lucid articles about why the blockchain collapsed. Following FTX, he corralled his podcasting partners – including his Dragonfly colleague Thomas Schmidt, Gauntlet’s Tarun Chitra and Compound creator Robert Leshner – into doing a series of informative episodes on the fall of FTX. And as a VC, Qureshi has keen foresight but is afflicted with the same problem all humans share: an inability to foreknow.

This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.

 

Still, when it comes to understanding the current moment in crypto he’s more or less unmatched. Or, at the very least, he’s not afraid to be a little contrarian. At Consensus 2023, for instance, Qureshi argued that CertiK, an auditing firm with a less-than-stellar reputation, was making a mistake by offering to reimburse victims of Merlin, a decentralized finance (DeFi) protocol Certik had recently audited. “This is explicitly insurance,” Qureshi said, arguing that if this move is repeated it would push premiums for audits without necessarily improving their accuracy because firms would expect to have to make payouts. CoinDesk caught up with Qureshi to talk about the state of crypto venture capital, the regulatory environment and why Ponzi schemes will always collapse.

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Read full coverage of Consensus 2023 here.

How has your investment thesis changed in a non-ZIRP [zero interest-rate policy] environment?

The biggest change has been the demand for [decentralized finance]-sourced yield. This was a big theme of what made DeFi attractive in a ZIRP environment. Now the appetite for risk has totally changed, so in order to gain traction with consumers, you have to do more than just create synthetic high-yield products.

You've said in the past that one of crypto's particular selling points is permissionless innovation. Are there emerging trends that have developed this past year that you didn’t see coming.

Nope, I predicted everything perfectly. I also knew you would ask this question.

Don’t you have a hot take on the Cosmos ecosystem?

The Cosmos community is an army of generals. A community founded on the basis of radical independence from other chains is, unsurprisingly, unable to agree on stuff.

Following FTX there have been numerous calls to rethink crypto's market structure. Are there ways to redesign centralized exchanges (like separating trading from custody or adding a centralized clearing house) that you'd support?

 

Separating trading from custody is the obvious one. Prime brokers like Hidden Road and FalconX are already facilitating this. Post-FTX (and post the Binance Commodity Futures Trading Commission suit), institutional players are no longer comfortable facing risky exchanges directly and taking on counterparty risk. In that regard, we'll see the same disaggregation of financial layers that you see in [traditional finance].

See also: Mike Belshe – The SEC's Custody Rule Would Be a Net Positive for Crypto | Opinion

Do you believe that VCs should be subject to similar lockup periods on token stakes as they currently are on equity stakes?

To be clear, equity stakes are not necessarily locked up. There's nothing that generally stops a company from selling its equity via a secondary transaction (unless the board specifically prohibits such sales). The thing that usually stops them is the reputational damage of doing so. The same is true of tokens. But yes, in general we push for long lockups when we make investments, both for investors and for the team.

In 100 years, will there be more or fewer monies?

Fewer.

Is it better to be able to do what you want or feel compelled to do what you must?

It is better to feel compelled to do what you must. It doesn't feel as good, but it leads to a life better lived.

Are there ways of designing crypto systems that have network effects without "Ponzi-like" attributes?

 

Ponzi schemes don't have network effects (they are not networks). They don't even have economies of scale – that is, they don't get easier to sustain the bigger they get. It's the reverse – the bigger they get, the harder they are to sustain. That's why Ponzi schemes that are small can survive for a while, but the bigger they get, the more likely they are to pop.

Do you think mass automation will finally cause U.S. productivity to increase/time spent working to shrink for most people? Bonus: any thoughts on why the past century-plus of techno progress has not increased leisure time?

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I think it will cause productivity to increase, but I think it will lead to very unequal effects on time spent working. Poorer people will work less, wealthier people will work about the same I would guess, because wealthy people tend to like their jobs more.I think the way we are measuring increased leisure time is not well-measured. We do a lot more leisure at work now than we did in the past. It's difficult to quantify one for one.

Tim Moseley

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Gold Price News: Gold Set for Monthly Gain as Attention Turns to Rate Decisions

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Gold Price News: Gold Set for Monthly Gain as Attention Turns to Rate Decisions

Gold continues to trade just below $2,000 an ounce with the precious metal set to record a second monthly gain on the back of investors’ rush to safe havens earlier in the month.

While gold may have dipped slightly from the highs achieved earlier in April, there remains plenty of support for the haven asset while market confidence is still so fragile. A broadly positive set of corporate earnings has failed to have a detrimental impact on the gold price – illustrating investors’ medium-term concerns about the health of the global economy and the banking sector.

As we look ahead to May, next week’s Federal Reserve interest rate decision on Wednesday followed by the European Central Bank on Thursday is likely to set the early tone for gold. While both banks are expected to increase their rates by 25 basis points, the commentary that supports these moves will have a significant impact on how long gold can remain at these elevated levels.

After a strong run in March and April, gold investors will be hoping that next week’s hikes, particularly that of the Fed, are close to the final ones in this current cycle of increasing interest rates. If that does prove to be the case, then gold has sufficient support to keep it trading in the high $1,900s for the foreseeable future while hints of further hikes needed may push it back down towards $1,900.

Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.

As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.

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Google Cloud to optimize Polygon zkEVM scaling performance

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Google Cloud to optimize Polygon zkEVM scaling performance

 Apr 28, 2023

Google Cloud to optimize Polygon zkEVM scaling performance

 

Polygon Labs and Google Cloud announced a multi-year partnership at Consensus 2023 that will see the cloud computing service provider help boost the development of the Ethereum scaling protocol’s tools and infrastructure.

Polygon’s core protocols, including Polygon proof-of-stake (PoS), Polygon zkEVM and Polygon Supernets, are set to benefit from the provision of Google Cloud’s framework and developer tools. The partnership is aimed at simplifying developer integration to build, launch and grow Web3 products and decentralized applications (DApps) on Polygon.

Google Cloud’s partnership with the ecosystem is expected to advance Polygon’s zero-knowledge development. Testing of Polygon zkEVM’s zero-knowledge proofs on Google Cloud reportedly resulted in faster and cheaper transactions compared to the existing infrastructure available.

The Polygon zkEVM beta, an Ethereum Virtual Machine (EVM) scaling solution, was launched to mainnet in March 2023, powering reduced transaction costs and increased throughput of smart contract deployments.

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Related: Polygon’s ‘holy grail’ Ethereum-scaling zkEVM beta hits mainnet

Google Cloud’s Blockchain Node Engine will be used by the Polygon ecosystem to assist with time-intensive processes and costly overheads of acquiring, maintaining and operating dedicated blockchain nodes. This specific integration intends to remove the need for Polygon developers to configure and run Polygon PoS nodes.

Polygon Labs president Ryan Wyatt highlighted the wide variety of benefits to the protocol’s ecosystem through the partnership in a statement coinciding with the rollout of the collaboration:

“Today’s announcement with Google Cloud aims to increase transaction throughput enabling use cases in gaming, supply chain management, and DeFi.”

Google Cloud’s APAC managing director of engineering and Web3 go-to-market, Mitesh Agarwal, said its services are improving data availability, resilience and performance of scaling protocols like ZK-proofs.

The partnership will also provide capital resources to Polygon ecosystem developers and companies building Web3 products and DApps. Certain early-stage Polygon Ventures-backed startups will also be able to receive newly launched Web3-specific benefits from the Google for Startups Cloud Program.

Google Cloud’s startup accelerator program now supports 11 major blockchain firms. Meanwhile, blockchain analytics firm Nansen also announced that its data services would be available to projects in Google Cloud’s Web3 startup program.

Magazine: Here’s how Ethereum’s ZK-rollups can become interoperable

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Tim Moseley

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