Market Roundup: Crypto Moves with US Debt Ceiling, DAME Tax Blocked, Beijing Eyes Metaverse

Written by BTSE

June 2, 2023

BTSE Market Roundup

Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.

As the week kicked off, Bitcoin (BTC) and Ethereum (ETH) both climbed after news broke about the US government dodging a debt default, with BTC edging above US$28,000 briefly. A deal would avert devastation for not only crypto markets, but also the traditional financial sector and the broader economy.

 (as of 1:30 AM UTC, June 2, 2023)

Later in the week, the U.S. House of Representatives passed a bill to raise the debt ceiling, but there is still more work for lawmakers to do: the bill needs to pass the Senate and be signed by President Joe Biden before it comes into effect.

Most of the cryptocurrencies with the largest market capitalizations trended up over the week, with Ripple (XRP) and Solana (SOL) making the largest moves, up 10.56% and 6.78%, respectively. Litecoin (LTC) continues to rise as we approach its next halving on August 2, 2023, with its token price increasing by 8.24% over the past seven days.

While things look rosy at the moment, it’s worth weighing what may take place in the near future. JPMorgan analysts have noted that the U.S. Treasury will issue nearly US$1.1 trillion in new T-bills soon. This could attract significant levels of liquidity that would otherwise be invested into other assets, such as crypto. 

This may mean that crypto markets will be extremely volatile soon. For a primer on how to capitalize on upcoming developments, check out BTSE’s guide to crypto trading strategies.


Web3 News


  • As details of the agreement on the U.S. debt ceiling between President Joe Biden and House Speaker Kevin McCarthy emerged, it was revealed that the proposed Digital Asset Mining Energy (DAME) tax, which aimed to impose a 30% tax on cryptocurrency mining firms, has been blocked. The Biden administration argued that such a tax was necessary to address the environmental and societal impacts of crypto mining. However, U.S. Congressman Warren Davidson confirmed in a tweet that blocking proposed taxes, including the DAME tax, was considered a victory.


  • Beijing has released the Beijing Internet 3.0 Innovation Development White Paper, which focuses on the concept of the metaverse and Internet 3.0 rather than embracing cryptocurrency. While Web3 and NFTs are briefly mentioned, the paper primarily emphasizes the evolution of the metaverse beyond entertainment to encompass everyday life and business activities in 3D virtual spaces. It discusses the integration of virtual and real worlds, open authoring tools for creators, and the interconnectedness of economic activities. The paper also explores the necessary technical architecture, including artificial intelligence, blockchain, and communication networks like 5G and 6G. Privacy concerns are raised with the mention of brain-computer interfaces for interaction. The paper recommends a strategy for Beijing’s role, including tax incentives, research advancement, ecosystem development, and content supervision, data security, privacy, and identity considerations.


  • Local authorities in Bali have issued a warning to foreign tourists, stating that using cryptocurrency as a form of payment will result in firm action. Bali Governor Wayan Koster stated that tourists who violate visa rules, use crypto for transactions, or engage in other prohibited activities could face deportation, criminal penalties, or severe sanctions. Indonesian law mandates that all transactions in the country must be settled in the local currency, the rupiah, with violators potentially facing imprisonment and fines. Even though crypto payments are prohibited in Indonesia, it is legally recognized as an asset.


  • ​​Russian lawmakers have decided to abandon plans for a state-run cryptocurrency exchange and instead focus on setting regulations for existing private enterprises in the crypto industry. The Ministry of Finance did not support the establishment of a national crypto exchange and intends to legally regulate the creation of such platforms by private businesses. The Central Bank is expected to oversee and regulate these platforms, particularly in terms of international settlements. The move has been welcomed by private crypto operators in Russia, who believe it will minimize risks, promote competition, and foster innovation. This shift in approach suggests a new chapter in Russia’s relationship with cryptocurrencies, following a history of mixed signals and regulatory uncertainty.


Crypto Tech


  • Bitcoin critic Peter Schiff, known for his skepticism towards cryptocurrencies and NFTs, is surprising the community by launching his own digital art collection on the bitcoin blockchain. Collaborating with artist Market Price, Schiff will release the “Golden Triumph” collection, which includes a physical painting, limited edition prints, and unique digital versions recorded as Ordinal Inscriptions. The concept of Ordinals involves inscribing digital assets onto satoshis, the smallest units of bitcoin, made possible by the Taproot upgrade. While Schiff’s announcement has generated mixed reactions, it caught the attention of Binance CEO CZ, who expressed his support for the move.


Stories You Might Have Missed


  • Solana co-founder Raj Gokal likens Solana to Apple, highlighting its strong emphasis on user experience. In a recent TechCrunch interview, Gokal outlined Solana’s ambition to build a blockchain network mirroring the simplicity and seamless experience of the regular internet, likening it to Apple’s relentless focus on perfecting touchscreen latency before launching the iPhone. He believes Solana could potentially become the “Apple of crypto.”


  • MakerDAO’s decentralized stablecoin, DAI, is experiencing a shift as its reliance on Circle’s USDC stablecoin decreases from 50% to 23.6%. MakerDAO is now opting for U.S. Treasury bills and real-world assets to back DAI. While the move diversifies the collateral, some experts still express concerns about centralization as USDC is replaced by other centralized assets like Gemini’s GUSD and Paxos’s USDP. Despite the changes, DAI remains exposed to U.S. regulations through companies like Coinbase and BlockTower. The MakerDAO community has also approved a US$1.6 billion USDC deposit to Coinbase Custody for stable yields.


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Note: BTSE Blog contents are intended solely to provide varying insights and perspectives. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Markets are volatile, and trading brings rewards and risks. Trade with caution.

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