In Markets
Bitcoin has just seen its highest ever USD weekly close at A$164,869/US$106,502 – less than 3% off a new all-time high – although markets are a long way from irrational exuberance. Moody’s caused some angst by downgrading US government bonds from AAA status, but only to the same level as the other two major ratings agencies. 21Shares has forecast Bitcoin will hit A$210,350/US$138,500 this year, driven mostly by institutional inflows rather than retail mania. Here in Australia, the RBA is expected to cut interest rates. Meanwhile, the Japanese economy is contracting. The Crypto Fear and Greed Index is at 74, or Greed.
From the OTC desk
Bitcoin Eyes Record Peaks
BTC/USD started the week strongly and ended even stronger, marking the highest weekly close ever at $US106,502 on Independent Reserve. The bulls are now targeting the all-time high of $US109,000, which is within reach. Late Friday evening, the U.S. credit rating was downgraded, with Moody’s citing a large fiscal deficit and rising interest costs. As a result, all three major rating agencies have removed the U.S. from their top rating tiers. This led to weakness in the USD, with the DXY index dropping from 102 to 100 which correspondingly may have contributed to BTC/USD’s rise.
Trump-Putin peace talks
President Trump’s two-hour call with Putin on May 19, 2025, ignited hopes for a Russia-Ukraine ceasefire, with Trump touting “excellent” progress and Vatican-hosted talks. He announced immediate ceasefire negotiations, a major step toward ending the war. Whilst there are still significant obstacles in the way of peace, the market reacted positively with the S&P Index closing just short of 6,000, the highest level since February.
Strategy’s Bitcoin gamble sparks legal firestorm
Strategy, the biggest corporate Bitcoin holder, scooped up 7,390 BTC for US$765 million, boosting its stash to 576,230 coins worth over US$59 billion. But the crypto titan’s aggressive bet is under siege: a class action lawsuit, filed May 16, 2025, in Virginia, accuses Strategy and execs like Michael Saylor of hyping Bitcoin profits while downplaying volatility risks under new accounting rules.
OTC desk activity
- Some profit-taking flows were observed during this rally from major cryptocurrencies and some altcoins.
- Continued stablecoin off-ramp flows.
Key economic calendar events (AEST)
- Tuesday, 20 May, 2:30 PM: RBA Interest Rate Decision (Consensus: 3.85%)
- Wednesday, 21 May, 4:00 PM: Great Britain Inflation YoY (Consensus: 3.3%)
- Friday, 23 May, 12:00 AM: US Home Sales (Consensus: 4.1M)
- Friday, 23 May, 9:30 AM: Japan Inflation Rate YoY
For any further information, please feel free to reach out.
In Headlines
No CGT on Bitcoin?
Aussie Bitcoiners may be eligible for up to A$1 billion (US$645M) in capital gains tax refunds following a court ruling that Bitcoin should be treated as money rather than an asset. The Australian Financial Review reports the decision arose out of a case concerning Federal Police officer William Wheatley, who is alleged to have stolen 81.6 BTC. His lawyers argued Bitcoin is information rather than property, but Victorian magistrate Michael O’Connell said Bitcoin is more like Australian dollars than foreign currency or gold. The decision flies in the face of the ATO’s tax treatment of Bitcoin, which requires CGT to be paid on every trade. Wheatley’s lawyers have appealed the ruling.
Biggest change to Solana ever
Solana Labs spin-off developer studio Anza has published a white paper proposing a new consensus mechanism called Alpenglow. A component called Votor would be able to run two concurrent voting paths simultaneously, boosting transaction speeds, lowering block times, and increasing scalability. Another new component, called Rotor, refines the block propagation protocol. Anza described the new consensus protocol as “the biggest change to Solana’s core protocol since, well, ever.”
JPMorgan allows customers to buy Bitcoin
JPMorgan boss Jamie Dimon famously hates Bitcoin, but says the bank will allow customers to buy it. “We are going to allow you to buy it,” Dimon said at the bank’s annual investor day. “We’re not going to custody it. We’re going to put it in statements for clients.” Dimon has previously called Bitcoin “worthless” and “a fraud” and said he would shut down if he could.
Hong Kong warms to RWAs
Guotai Junan International (GTJAI), the Hong Kong arm of China’s largest securities broker, has just been approved by the SFC to offer tokenised Real World Assets in Hong Kong. The Financial Times reports that some analysts believe Hong Kong is being used as a testing ground that may lead to the liberalisation of crypto laws in mainland China. One of China’s largest state banks, the Bank of Communications, issued a US$300 million (A$465M) digital bond in Hong Kong, and the territory also plans to exempt private equity funds, hedge funds and investment vehicles for the super-rich from paying tax on gains from crypto.
Singapore approves digital fund
The Monetary Authority of Singapore has given asset manager Franklin Templeton approval to launch its tokenised Franklin OnChain US Dollar Short-Term Money Market Fund. It’s similar to the Luxembourg-registered Franklin Templeton money market fund, which invests in short-term securities and government money market instruments and currently has US$1.76 billion (A$2.73B) in total net assets. The minimum investment will be just US$20 (A$31), meaning anyone could access the fund.
FTX repayments next week
FTX will pay out more than US$5 billion (A$7.75B) to creditors from May 30 under phase two of its bankruptcy plan. Creditors are expected to receive funds within three business days, paid out using the dollar value of their crypto holdings in November 2022. There are hopes that at least some of those funds will be reinvested in crypto. “Fresh powdaaaaaa,” popular trader ICOBeast wrote on X.
Stablecoin bill up for cloture vote
The GENIUS stablecoin bill has passed a cloture vote to advance the legislation, after failing on May 8 along party lines. Previously, every Democrat and two Republicans voted against the bill, citing concerns over consumer protections and President Trump’s crypto interests. Negotiations have addressed many of the concerns and added limits on big tech issuing stablecoins unless they meet strict conditions, bans on yield-bearing stablecoins, bankruptcy protections, and stricter rules for foreign issuers. Having received more than 60 votes, the bill will now move to a full floor vote, which could happen as soon as tomorrow, Decrypt reports. If all goes according to plan, the vote on the bill itself may see similar results.
Ethereum Treasury Company
Entreparticuliers.com, one of France’s historic real estate search engines, announced it aims to become the first publicly listed Ethereum Treasury Company. The company intends to accumulate a “significant” amount of Ether as well as to build solutions around real world assets and participating in DeFi on Ethereum.
Bitcoin ETFs
The 11 Bitcoin ETFs have added more than US$5.61 billion (A$8.7B) in assets since April and totalled more than US$41 billion (A$63.5B) in inflows so far this year. CFTC data suggests it isn’t just carry trades, but investors going long on Bitcoin. “CFTC data shows leveraged funds didn’t significantly increase short positions, indicating most flows were directional bets, not arbitrage,” Imran Lakha, founder of Options Insight, wrote. The Ether ETFs took in US$41.8 million (A$64.7M) last week; however, CoinShares reports that in total, Ethereum digital asset funds globally took in US$205 million (A$318M) and were the week’s “standout performer.”
Wisconsin sells Bitcoin
The State of Wisconsin’s Investment Board has sold around US$350 million (A$542M) of shares in BlackRock’s IBIT Bitcoin ETF. The board first invested in Bitcoin a year ago and doubled its holding in late 2024. The exit came as Bitcoin’s price dropped around 12% over the quarter of this year.
Ethereum undervalued?
CryptoQuant released a report suggesting that Ethereum is massively undervalued and due for a big move. The ETH/BTC market value to realised value metric is at a ratio last seen in 2019, and historically, when it has hit similarly low levels, it then gained massively and outperformed Bitcoin. The analysts say the ETH/BTC ETF holdings ratio has risen steeply since late April, suggesting demand is picking up for the Ether ETFs.
The ETH/BTC price ratio, which has been testing the bottom of the range (last visited in Jan 2020) has also rebounded 38%. CryptoQuant notes ETH exchange deposits have dropped to their lowest relative ratio since 2020, suggesting investors expect higher prices ahead. Santiment reports a record low of just 4.9% of the supply is on exchanges. However, CoinDesk reports that ETH’s recent price rise is mainly due to traders unwinding shorts, rather than a surge of longs.
Until next week, happy trading!
