- Bitcoin traded in a range between $58,000 and $65,500 over the past week, with support at $60,000 proving to be a pivotal point in the battle between bulls and bears.
- Multiple Fed representatives conveyed the message that interest rates will likely stay “higher for longer,” which led to a rise in volatility across all financial markets.
- The SEC issued a Wells Notice to Robinhood for its crypto listings and custody operations, halting a rally on Monday, which was followed by a multi-day pullback.
Market Overview
Volatile conditions continue to dominate post-halving trading as Bitcoin (BTC) remains in consolidation mode between $58,000 and $65,500, while macroeconomic concerns have had destabilizing effects on all financial markets.
Various data points have sent somewhat of a mixed picture of inflation and interest rates, prompting the Fed to send out multiple representatives this week to convey the message that inflation remains elevated, they don’t want to act too hastily with cuts, and the possibility of a rate hike is not out of the question – but unlikely in the short term.
The result of growing interest rate uncertainty amid a backdrop of ever-increasing debt was volatility across all markets, including stocks, Treasuries, the DXY, gold, oil, and cryptocurrencies. With the halving behind us and the prospect of “higher for longer” interest rates ahead, many are now wondering what could be the next catalyst to reignite bull market momentum.
After bouncing off $59,000 last Friday and rallying to a high of $65,515 on Monday, Bitcoin stair-stepped its way down to support at $61,000 by Wednesday, with bulls and bears in a tug-of-war for control of the price action. On Thursday, bulls got the upper hand and pushed BTC to a daily candle close of $63,107.
At the time of writing, the total cryptocurrency market cap stands at $2.32 trillion, an increase of 4.98% over the past week. The DeFi market cap currently stands at $105.3 billion with a 24-hour trading volume of $6.25 billion, which is 9.8% of the total crypto market volume.
Crypto News
On a Roll – The U.S. SEC issued another Wells notice, this time to Robinhood Crypto, targeting the platform’s cryptocurrency listings and crypto custodian operations. The filing indicates the staff at the SEC has “made a ‘preliminary determination’ to recommend that the SEC file an enforcement action against RHC alleging violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934, as amended.” The SEC said potential consequences “may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities.” Robinhood told its customers that the Wells notice “will not affect your account or the services we provide,” and that “Robinhood Crypto is here to stay.”
2022 Redux – The newest repayment proposal from FTX promises to repay all creditor claims plus “billions in compensation for the time value of their investments” to the tune of “approximately 118% of the amount of their allowed claims within 60 days after the effective date of the Plan.” Only creditors holding claims in an allowed amount below $50,000 will be eligible for the 118% recovery, which FTX anticipated was “98% of the creditors of FTX by number.” Critics of the plan have pushed back against the “generosity,” noting that the figure applies to the value of creditors' assets at the time of its bankruptcy in November 2022 rather than at current prices, which are significantly lower for most tokens. FTX estimated the total value that will be distributed to creditors will range between $14.5 and $16.3 billion.
Mixing Not Allowed – Amid the ongoing Tornado Cash saga, a bill – dubbed the Blockchain Integrity Act – has been introduced in the U.S. House of Representatives that looks to ban cryptocurrency mixers for two years. The bill is sponsored by five Democratic congresspeople led by Sean Casten, who defined a crypto mixer in a statement as a pool that allows users to “generate a new address and withdraw their funds without revealing the link between the depositor and withdrawal addresses.” The bill seeks to temporarily prohibit financial institutions, including cryptocurrency exchanges, virtual asset service providers, and any other registered money service businesses, from accepting funds that had gone through a mixer or to allow funds to be withdrawn directly to the address of a mixer. Every violation would be subject to a civil penalty of up to $100,000.
And in the World of Cryptocurrency Adoption…
Interoperable Banking – Mastercard has joined forces with major banking institutions in the U.S. – including Citigroup, Visa, and JPMorgan – to test distributed ledger technology for banking settlements using tokenization. The primary goal of the partnership is to test shared-ledger technology called Regulated Settlement Network (RSN), which enables tokenized assets like Treasurys, investment-grade debt instruments, and money from commercial banks to be settled collectively. At present, securities such as investment-grade debt and assets such as money from commercial banks function on different systems. RSN would enable settlement procedures to occur on a single platform by converting various assets into tokens and settling them on a distributed ledger. Mastercard said the project is focused on increasing the efficiency of cross-border settlements and reducing the chance of error and fraud.
Crypto Lobby – Cryptocurrency proponents are starting to make their voices heard in the political realm using a well-known fundraising strategy to achieve their goal – super PACs – with a report from Public Citizen showing large crypto industry political action committees (PACs) have raised $102 million to spend on the 2024 Congressional elections. Only two other super PACs have raised more money so far this cycle, highlighting the rising stature of the crypto lobby following the launch of the first spot Bitcoin exchange-traded funds (ETFs) in the U.S. The report shows that more than half of the funds raised came directly from corporations, primarily Coinbase and Ripple Labs. Thus far, crypto-supported candidates have seen success as only one of the six candidates in already-completed 2024 primaries that received support from crypto super PACs lost their race.
It’s Begun – Manuel Nordeste, Fidelity’s Vice President of Digital Assets, said the company has started to engage with major pension funds about the possibility of investing in Bitcoin via the U.S.-listed spot BTC ETFs, and the list of interested parties is growing. Pension funds have historically been more cautious about risky investments like crypto due to strict risk management protocols; however, the launch of spot BTC ETFs has opened the door to allocating using an investment vehicle with which they are familiar. It is estimated that $4 trillion in capital is held by funds in the U.S., and even a small percent allocation could drive significant inflows. Nordeste’s comments came on the heels of reports from BlackRock that they have been having educational conversations about Bitcoin ETFs with institutional players like sovereign wealth funds and pension funds.
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