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Weekly Market Highlights - Jul 22, 2022

Binance Research
2022-07-22 07:25
Happy Friday! The Weekly Market Highlights is an initiative from the Binance Research team to round up the week, summarizing key market events and views from the team.

🔎 Macro / Tradfi

  • The European Central Bank (ECB) has raised interest rates this week by 0.5%. The overarching goal is to prevent surging borrowing costs from leading to a broader eurozone debt crisis. The rate hike was the first in more than a decade, ending close to 8 years of negative rates. Eurozone inflation recently recorded a high of 8.6% (target of 2%). Fears remain that the Eurozone is headed toward "stagflation" as efforts to stamp out a surge in inflation will likely bring growth down.
  • Mario Draghi has resigned as Italy’s prime minister. This triggered the dissolution of the parliament and will lead to new elections in September. The resignation is coming during a time of already existing economic challenges for Europe. The news led to a sell-off in Italian debt, with the 10-year government bond now trading at 3.7%. With new elections on the horizon, the country's dynamics might change. Currently, the ballot shows a potential victory of a possible right-wing coalition. The Brothers of Italy, led by Giorgia Meloni, are in first place with nearly 24%, ahead of the Democratic party (PD) with 22%, and the League at 14%, according to a poll by the SWG institute carried out on Monday.

🔎 Crypto

  • The Ethereum network is expected to merge from its current state as a proof-of-work (PoW) blockchain to an energy-efficient proof-of-stake (PoS) network. While the date isn’t final, we could observe miners getting ready for the event. Ethereum's hash rate dropped over 26% since the network's all-time high almost two months ago… Overall, Ethereum’s computational power started to slide after it reached an all-time high (ATH) at 1,320 TH/s. When Ethereum finally transitions from PoW to PoS, miners will have to dedicate Ethash hash power elsewhere or stop mining. For now, it is assumed that a majority of ETH’s PoW miners will simply mine Ethereum Classic (ETC), as the two networks share the same Ethash algorithm.
  • Stablecoin regulation is advancing. Just this week, the UK regulators introduced upcoming rules for Stablecoins in the new markets bill. The regulation will likely cover Stablecoins usage as a means of payment. In the US, a draft bill by house lawmakers would lead to bank-like regulation and oversight for issuers of stablecoins. The draft bill would allow non-banks to issue stablecoins provided they adhere to the stricter oversight but would prohibit companies from issuing their own stablecoins.

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Binance Research
About Binance Research: Binance Research is the research arm of Binance, the world's leading cryptocurrency exchange. The team is committed to delivering objective, independent, and comprehensive analysis and aims to be the thought leader in the crypto space. Our analysts publish insightful thought pieces regularly on topics related but not limited to, the crypto ecosystem, blockchain technologies, and the latest market themes.
General Disclosure: This material is prepared by Binance Research and is not intended to be relied upon as a forecast or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, cryptocurrencies or to adopt any investment strategy. The opinions expressed are as of the date shown above and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Binance Research to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Binance. This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any securities, cryptocurrencies or any investment strategy nor shall any securities or cryptocurrency be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Investment involves risks.

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