Good morning. Here’s what’s happening:

Prices Crypto traders remain optimistic that the Fed will not hike rates.

Insights Hong Kong’s crypto rules are not that good.

Bitcoin opened Asia’s trading session at $25,948, an increase of 0.2%. Ether is now at $1,740 – a decrease of 0.1%.

Edward Moya is a Senior Analyst at OANDA. He believes that the Fed’s likely decision to skip a rate increase on Wednesday (prediction markets give it a 96% probability) and the increased scrutiny by regulators of altcoins are fueling bitcoin’s growth.

The Fed shouldn’t have any problem skipping the rate hike scheduled for Wednesday due to the cooling inflation report. Wall Street is getting a bit more hopeful that an FOMC skip in June could become a pause in July,” Moya wrote in a note. “Bitcoin is stable at around $26,000 as investors reduce altcoin exposure while increasing Bitcoin holdings.”

Moya explains that the disinflation is being driven by the decline in wholesale car prices and the weaker consumer demand, as well as the rate hike skipping. This has led to a drop in the value of the dollar and an increase in the demand for clothing and used cars.

Despite Bitcoin’s support of $25K, a key technical indicator for bitcoin, the moving-average convergence divergence (MACD), , has turned bearish. This signals a possible price decline, even though Bitcoin maintains its support at that level. Analysts noted that U.S. inflation data and the Fed’s potential rate hike skipping could also affect Bitcoin’s performance.

The Biggest Gainers

Biggest Losers

Hong Kong’s Crypto Rules Won’t Bring in Exchanges

In response to a lawsuit by the Securities and Exchange Commission, a Hong Kong legislator has invited Coinbase to open a shop on the territory.

Hong Kong, after all, is currently in the phase of establishing rules for cryptocurrency. In the U.S. Coinbase must sue the SEC in order to force it to create rules.

On paper, it would be reasonable for Coinbase to relocate to another jurisdiction. Hong Kong would be the logical choice, given its established position in Asia as a market hub with a dynamic and fast-paced environment.

Theoretically, yes.

Hong Kong’s rulebook is not attractive for crypto exchanges.

The number of tokens that can be traded will be much smaller than what is available on established exchanges.

According to the Securities and Futures Commission (HK’s securities regulator), there must be a cooling-off period of 12 months between the launch and listing of tokens. Crypto derivatives, earn-or-lend programs, and staking services are also banned. Airdrops should be avoided at all costs.

Hong Kong’s current framework is not attractive. Leo Weese is the co-founder of and president of the Bitcoin Association of Hong Kong. He told CoinDesk that there are few users, no banking partnerships, and very limited products.

Weese claims that Asian markets are fundamentally different from those in the West, and Coinbase wouldn’t automatically succeed in Hong Kong even if it were to give up its current customer base.

He said that Hong Kong is attractive because many tokens, including decentralized protocols, are not considered securities. Those that are, however, do not have to be registered, as they are in the United States. This makes it possible to trade tokens which are not considered securities in other countries.

Weese points out that moving to Hong Kong won’t automatically shield Coinbase against U.S. regulations or the SEC arm.

BitMex, a Hong Kong-based company, was caught up in the U.S. regulatory system, despite its weak ties with the United States. Binance, whose mothership is offshore and whose founder is also offshore, was similarly caught up in the U.S. regulatory regime.

Even if Coinbase made the move, this wouldn’t be an effective decision.

Important events.

2:00 a.m. HKT/SGT(18:00 UTC) United States Fed Interest Rate Decision

5 a.m. SGT/HKT (21:45 UTC). New Zealand Gross National Product (YoY/Q1)

7 a.m. SGT/HKT (23:50 UTC). Japan exports (YoY/May).

CoinDesk TV

If you haven’t seen it yet, here is the latest episode of First Mover on CoinDesk TV.

According to the Bureau of Labor Statistics, the Consumer Price Index for May was lower than expected. It rose just 0.1% compared with 0.4% in April. This news was released one day before the Fed’s most recent monetary policy meeting. Clara Medalie joined “First Mover”, Kaiko’s Director of Research to discuss the market reaction. Mike Selig, Willkie Farr and Gallagher LLP counsel, joined us to discuss the impact of SEC actions against Binance Coinbase. John Melican is the Chief Legal Officer at Elliptic. He joined us to talk about new findings revealing that attackers responsible for this month’s $35,000,000 attack on Atomic Wallet were moving stolen funds through OFAC-sanctioned Garantex exchange.

Bitcoin Infrastructure Company Blockstream will Unveil its Long-Awaited Mining Rig by 3Q 2024 :The company expects to raise additional capital to fund the mining business.

Binance goes to court against the SEC. Binance and Binance.US are fighting the SEC’s request to freeze all Binance.US accounts.

Bitcoins, Ether, and Stablecoins total 80% of the $1T Cryptomarket Cap as investors flee Altcoins According to K33 Research, the combined market capitalization for BTC, ETH, and stablecoins has reached its highest level since February 20, 2021.

The XRP Army’s Fight XRP supporters are adamant that the SEC has unfairly targeted Ripple as a securities violator while giving Ethereum a mysterious free pass. They have a valid point.

Uniswap Labs Releases its Plan for Uniswap v4, Inviting Community Feedback Uniswap Labs Opens its Development Process to the Public for the First Time Uniswap Labs is the largest decentralized crypto exchange.

James Rubin is the editor.