Here’s what happened in blockchain and crypto this week.
Bitcoin and major cryptoassets fell across the board this week in line with the price of gold which slipped below the key $2,000 level. Meanwhile, US equities ended the week little changed amid better-than-expected corporate earnings so far. It was a fairly uneventful week in economic data releases but the overall picture remains mixed as inflation fears linger. The Philadelphia Fed manufacturing index came in below consensus estimates and reached a fresh low for this economic cycle while major US companies continue to cut jobs. Meanwhile, the market now prices in a significantly higher probability (about 86%) of another 25 basis points rate hike by the Fed in May compared to last month. As a result, yields of 2-year US Treasury notes have edged up to 4.23% from 3.66% about two weeks ago. In crypto news, SEC Chairman Gary Gensler was grilled by US lawmakers this week over the agency’s approach to cryptoassets, particularly the status of ether.
Two important crypto-focused hearings took place in the US this week. On Tuesday, all eyes were on SEC Gary Gensler’s appearance before the House Financial Services Committee. Gensler was criticized by House Republicans for his running of the agency. A key focus of was his hostile stance toward cryptoassets. Among other things, Gensler failed to answer a direct question from Committee Chair Patrick McHenry on whether ETH was a security or a commodity. The SEC chair was also skewered by US House Majority Whip Tom Emmer for his handling of the FTX failure and his decision to regulate via enforcement action vs. clear guidance.
Another important hearing on stablecoins took place on Wednesday. The US House Financial Services Committee picked up where it left off on regulation pushed back last year. Lawmakers said any progress made since then is tenuous at best. Democratic ranking member Maxine Waters suggested that members are “starting from scratch” after Republicans made alterations to a bill that failed at an early stage last year ahead of the midterm election called the Stablecoin TRUST Act. Massachusetts Representative Stephen Lynch made a highly questionable assertion when suggesting that there is no need for stablecoins because the Federal government is about to release FedNow for settlements. In contrast, Columbia Business School Professor Austin Campbell offered a detailed and conclusive explanation why stablecoins are strategically important to the US dollar and the ability of the US to monitor illicit activity.
Meanwhile, Coinbase announced this week that it has obtained a license from the Bermuda Monetary Authority (BMA) and reportedly plans to open a derivatives exchange there “as soon as next week.” Earlier this week, Coinbase CEO Brian Armstrong suggested that the crypto exchange would consider leaving the US if the regulatory environment for the industry does not become clearer. “Anything is on the table, including relocating or whatever is necessary” he said after former U.K. Chancellor George Osbourne asked whether he could see Coinbase leaving the U.S. at Fintech Week in London.
Market Overview
The global cryptoasset market capitalization currently amounts to $1.21 trillion – down from $1.33 trillion a week ago, with bitcoin accounting for 43.9%. Among the Top 30 cryptoassets by market cap, Bitfinex’s LEO token outperformed, gaining 2.4% over the week. The price of bitcoin (BTC) decreased by 9.2% to $27,640 and the price of ether (ETH) fell by 10.6% to $1,897. The total value locked (TVL) in DeFi is sitting at roughly $49 billion – with Ethereum (excluding Layer 2s) accounting for more than 59% of TVL.
This Week’s Headlines
FTX crypto exchange restart plan draws possible bid from Tribe Capital, Bloomberg reports
The European Union’s landmark Markets in Crypto Assets (MiCA) regulation passes parliamentary vote
Signature Bank did not fail because of crypto, New York regulator says
- The SEC sues crypto exchange Bittrex and co-founder and former CEO
- Tether stablecoin dominance grows amid another one billion USDT mint on Ethereum
- Societe Generale’s crypto subsidary Forge launches euro stablecoin on Ethereum
- Ether deposits have outpaced withdrawals after Shapella upgrade
- Dormant Bitcoin whale transfers $60 million to new wallet after nine years
- Largest bitcoin derivatives exchange Deribit to launch zero-fee spot trading
- Coinbase obtains Bermuda license, could launch offshore derivatives exchange next week
- Sotheby’s to auction NFTs from failed hedge fund 3AC’s collection
Notable Deals and Fundraising
- Bitcoin financial services company Unchained raises $60 million in ongoing Series B funding
- Berachain raises $42 million to launch a Cosmos SDK-based Layer 1 blockchain
- Staking Provider P2P.org raises $23 million from big-name investors to drive institutional offering
- Decentralized cloud database Tableland raises $8 million Series A
- Crypto transparency platform Fractal raises $6 million
- Yoz Labs raises $3.5 million to build Web3 notification system
Manuel Trojovsky, Head of Crypto Investments & Research
Always be up to date on the market -> Subscribe here
