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U.S. inflation falls, but interest rates will continue to rise

Although some may have thought that the drop in inflation reported for the month of June to 8.5% could lead to an easing in interest rate hikes, presidents of the Chicago and Minneapolis Federal Reserve were quick to dash such hopes, assuring that rates will continue to rise at least until the beginning of 2023 or until inflation falls to the 2% range, which is far from being the case.

In our opinion, the transitory nature of inflation is questionable, especially when problems in the supply chain continue and perhaps a good part of the issue has to do with, besides loose monetary and fiscal policies, structural rearrangement, changes in life habits and consumption patterns, "reshoring", changes in migratory policies, trade wars, geopolitical changes that also point to possible new world orders, certainly spurred first by the pandemic and then by the conflict in Ukraine and the consequent sanctions against Russia, and, potentially, by the tensions between China and the U.S. over Taiwan.

Clearly, actions taken by Central Banks around the globe to deal with the macroeconomic outlook over the last three years, combined with the other aforementioned issues, have led to record inflation levels in several countries around the world. Spain, for example, reached a year-on-year inflation rate of almost 11%, its worst in almost 40 years. Mexico, with an 8.15% inflation rate, is back to levels not seen since 2000.

In the midst of this landscape, more and more asset management firms with billions of dollars in assets under management are no longer exploring, but investing and seeking exposure for their clients in Digital Assets, such as BlackRock and Abrdn, among others.

U.S. Inflation Drops to March Levels
Reported inflation for July in the U.S. has dropped to 8.5%, after peaking at 9.1% in the month of June.

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Fed Officials Say Interest Rates Could Continue to Rise
Despite the decline in inflation reported in July, presidents of the Chicago and Minneapolis Federal Reserve assured that interest rates will continue to rise for the rest of the year and part of next year, until inflation falls to 2%.

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Inflation in Spain reaches its highest level in 38 years
The year-on-year rate of the Consumer Price Index in Spain reached 10.8%, its highest level since 1984, despite a 0.3% decrease compared to June.

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Mexico's inflation reaches its highest level for 21 years
Mexico's National Institute of Statistics and Geography reported an 8.15% increase in the National Consumer Price Index in its interannual rate, the highest since December 2000.

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Treasury Department Sanctions Ethereum Mixer, Tornado Cash
The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) included Tornado Cash, a Digital Asset mixer that runs on Ethereum, on its list of Specially Designated Nationals, on the grounds of its use by North Korean hackers.

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Iran pays for its first import with Digital Assets
In order to circumvent the economic sanctions imposed by the United States, the government of Iran paid for the first time for an import using Digital Assets. The US$ 10M payment is the first of several that will begin to be made starting this September, according to an official of the Ministry of Industry.

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Ethereum transition to Proof-of-Stake to occur in September
The most awaited update of the Ethereum network, through which it will stop validating transactions with Proof of Work to move to a system based on Proof of Stake, could happen this September, between the 15th and 20th, according to several developers.

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BlackRock to offer direct exposure to bitcoin
Investment manager BlackRock launched a new private fund that will provide exposure to bitcoin spot for institutional clients. The product is currently only available in the United States.

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Point72 Asset Management's Steve Cohen to create firm focused on Digital Assets
The billionaire leader of asset management firm Point72, Steve Cohen, is laying the groundwork to form an investment project focused exclusively on Digital Assets, both spot and derivatives.

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Asset Manager Abrdn becomes majority shareholder of Digital Asset exchange
The US$ 619B AUM asset management firm founded in 1825, Abrdn, has moved forward with the acquisition of shares in the UK-regulated exchange, Archax, becoming a majority shareholder of the company.

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Hedge funds would have to report exposure to Digital Assets under this regulatory proposal
A new joint proposal by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) would require hedge funds with more than US$ 500M in total assets to report their exposure to Digital Assets.

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Buenos Aires to have Ethereum validator nodes by 2023
The secretary of innovation and digital transformation of Buenos Aires, Diego Fernández, assured that the Argentine capital will deploy Ethereum validator nodes by 2023, for "exploratory and regulatory purposes".

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Adoption of Digital Assets grows in Mexico by 8.3%
According to the most recent survey by the Finder.com site, Digital Asset adoption in Mexico grew 8.3% in the second quarter of the year, with bitcoin leading adoption in the country with 22.8% of holders.

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UN Agency Proposes Discouraging the Use of Digital Assets in Emerging Economies
The United Nations Conference on Trade and Development released three reports last Thursday recommending that emerging countries prohibit banks from owning Digital Assets and discourage their use due to the risks they pose to tax collection, financial stability and monetary policy.

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Solidus Capital is the leading firm in Digital Assets, which provides exclusive, agnostic, and institutional services such as Liquidity, Custody Solutions, Wealth (Private Accounts and Portfolio Management), Multi-Strategy Funds, Private Placements, and other sophisticated products in conjunction with bespoke accompaniment to High Net Worth Individuals, Family Offices, Companies, Wealth Managers and Banks.
 
By relying on Solidus' services, investors avoid the classic fatal mistakes:

- Lacking information in the context and moments of the market  

- Executing operations inefficiently  

- Using unreliable service providers and infrastructure  

- Closing of accounts and freezing of funds

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