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AUGUST 24, 2023

STAKING DISCONTINUED

Bitstamp, one of the oldest digital-asset exchanges, has announced the discontinuation of its staking services in the U.S. due to increased regulatory pressure from the Securities and Exchange Commission (SEC). Bobby Zagotta, the CEO of Bitstamp, cited the “current regulatory dynamics” as the reason behind the move, which will take effect on September 25. This move follows similar actions taken by other major platforms such as Kraken, which suspended its U.S. staking offerings and agreed to a $30 million settlement with the SEC over related allegations. in addition, Coinbase has also been encountering challenges with the SEC as the largest U.S. crypto platform is currently in a legal disagreement with the government agency over its staking services, and is arguing that the lawsuit lacks merit. Let’s remember that staking is a process that enables token holders to earn rewards by participating in blockchain validation, and it has come under SEC scrutiny due to concerns of potential security violations.

IMPRESSIVE PERFORMANCE

Nvidia experienced an 8% surge following its strong second fiscal quarter performance, where it exceeded expectations with earnings per share of $2.70 and revenue of $13.51 billion. Nvidia’s data center business, including AI chips, experienced outstanding growth with revenue increasing by 171% year over year. Additionally, although the high-end graphics business declined, the gaming division saw significant revenue growth. The company’s success was driven by the growing demand for its graphics processing units (GPUs) in the generative AI sector. Moreover, looking ahead, Nvidia has an optimistic projection of approximately $16 billion in revenue for the next quarter signifies a remarkable 170% growth compared to the same period in the previous year.

RESILIENCE DESPITE HIKES

According to the Labor Department, the number of Americans filing new claims for unemployment benefits fell last week as labor market conditions remained tight, despite the Federal Reserve’s aggressive interest rate hikes. The data shows that initial claims for state unemployment benefits decreased by 10,000 to a seasonally adjusted 230,000 for the week ended August 19. This positive trend suggests that employers are holding onto workers, a trend that started during the COVID-19 pandemic. Additionally, the number of people receiving benefits after the initial week increased slightly, indicating that some workers are experiencing short spells of unemployment before finding new jobs.

SHIFT TOWARDS COMMODITIES

Investors are showing renewed interest in commodities as global economic expansion gains momentum and speculation arises regarding the Federal Reserve’s monetary tightening cycle. Recent trends indicate a positive shift, with twenty of the world’s largest broad-based commodity exchange-traded funds experiencing consecutive net cash inflows, totaling nearly $1 billion. This comes after several quarters of net outflows, highlighting a potential shift in sentiment towards commodities. Additionally, the International Monetary Fund’s revised forecast for global economic expansion, particularly in the U.S. and the U.K., further supports this growing interest. As a result, professionals in the industry are noticing an uptick in inquiries from clients about investing in commodities once again.

UPCOMING SPEECH IMPACT

Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole summit in Wyoming on Friday is expected to have a significant impact on the financial markets as investors are particularly interested in Powell’s remarks regarding inflation and the overall state of the economy. Last year, Powell expressed concerns about high inflation and suggested that the Fed would continue raising interest rates until it reached its target, however, inflation rates have since eased to around 3%, down from above 9%. Nevertheless, despite this progress, recent labor market data indicates that the economy remains too strong for the Fed’s liking, even after 11 rate hikes. Furthermore, the rise in bond yields this week has also caused stocks to decline, leading some to speculate that Powell may adopt a more dovish approach on future rate hikes to calm jittery markets. Currently, market traders have assigned an 84% probability of “no change” at the September Fed policy meeting, and the key question for investors is how long Powell and the Federal Reserve will maintain elevated interest rates. Moreover, while the summit’s focus is on “Structural Shifts in the Global Economy,” Powell is unlikely to provide a definitive answer on policy adjustments until the Federal Open Market Committee meeting next month, as the Fed will await key data releases on PCE inflation and employment before making any changes to its current stance.

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