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Last week, the cryptocurrency market experienced notable volatility, primarily driven by an erroneous SEC tweet that caused Bitcoin’s price to briefly surge to $48,000 before correcting to around $45,000. This event sparked discussions on market manipulation and a heightened focus on the potential for spot bitcoin ETFs to attract institutional investments. Ethereum, meanwhile, rebounded from a two-year low against Bitcoin, outperforming it in the 24-hour period after the SEC’s announcement. Despite the SEC’s approval of 11 bitcoin ETFs, Bitcoin’s price response was relatively muted, while Ethereum rallied significantly, indicating a shifting market dynamic. High-profile predictions by financial experts like Robert Kiyosaki and Tom Lee foresee Bitcoin reaching as high as $150,000 and beyond, fueling optimistic market sentiment. However, Bitcoin entered a consolidation phase later in the week, with technical analysis showing mixed signals and an ongoing battle between bulls and bears, while the meme coin market bucked the broader downtrend, led by gains in DOGE and BONK.
The U.S. Securities and Exchange Commission (SEC) has approved 11 spot bitcoin exchange-traded funds (ETFs) for listing on major exchanges such as NYSE Arca, Nasdaq, and Cboe BZX Exchange. These ETFs, including those from ARK, Fidelity, and Vaneck, are expected to stimulate the bitcoin market, with industry leaders anticipating a significant positive impact on bitcoin prices. A competitive fee structure has emerged among the ETFs, with Blackrock offering a reduced fee of 0.25%, while others like Bitwise have set fees as low as 0.20%, though Grayscale remains the costliest at 1.5%.
U.S. SEC Chair Gary Gensler clarified that the approval of spot bitcoin ETFs does not constitute an endorsement of bitcoin, as the SEC views most crypto assets as securities and urges investors to be wary of the associated risks. The SEC’s decision to allow the trading of these ETFs follows a court ruling that questioned the SEC’s previous disapproval explanations, leading to a more favorable stance on listing and trading spot bitcoin ETP shares. Gensler reiterated that this approval does not reflect the SEC’s stance on other cryptocurrencies and compliance with federal securities laws, maintaining his position that the majority of crypto assets fall under investment contracts.
Jamie Dimon, CEO of JPMorgan Chase, reiterates his belief that bitcoin is valueless, associating it with illicit activities like sex trafficking and money laundering. Despite Dimon’s stance, JPMorgan has partnered with Blackrock to support the launch of the Ishares Bitcoin Trust, a spot bitcoin ETF. The SEC recently approved 11 spot bitcoin ETFs, including Blackrock’s, indicating a growing acceptance of cryptocurrency investment vehicles.
Coinbase Institutional, in collaboration with Glassnode, has released a report examining the anticipated effects of Bitcoin’s halving in the second quarter of 2024 and Ethereum’s Cancun upgrade, expected in the first quarter of 2024, on the cryptocurrency market. The report discusses the potential positive impact of these events on the respective currencies and highlights increasing institutional interest in crypto assets, leading to more mature market behaviors. Additionally, Coinbase Global could see significant benefits in 2024, with the possibility of becoming the custodian for Bitcoin ETFs, alongside a notable rise in the firm’s stock value.
U.S. lawmakers are calling for the SEC to explain how its Twitter account was breached, resulting in a false tweet about the approval of Bitcoin ETFs, highlighting the SEC’s failure to enable two-factor authentication. The incident has led to criticism from various senators, with demands for accountability and transparency from the agency responsible for market regulation. The SEC is investigating the breach with law enforcement, while stressing the importance of additional security measures for social media accounts.
Warren Davidson, Vice Chairman of a House Financial Subcommittee, criticized the U.S. Treasury’s proposed regulations on cryptocurrencies, saying they aim to effectively ban digital assets through excessive compliance requirements. He argues that treating participants like wallet providers and miners as traditional financial institutions is part of a misinformed effort that could stifle the crypto industry in the U.S. Davidson refutes claims linking crypto to terrorism financing and warns that these rules could push crypto companies out of the country.
Starting in June, Mercari, a leading Japanese e-commerce platform, will allow customers to pay with Bitcoin (BTC), as well as use funds from sales to purchase and trade the cryptocurrency. Despite listing prices in yen, the Mercari subsidiary Melcoin will handle all BTC transactions, ensuring sellers receive payments in yen. Following the launch of a BTC trading service and hitting 1 million users, Mercari is becoming increasingly popular for cryptocurrency transactions in Japan, even surpassing rival Rakuten in user preference.
The Commodities Futures Trading Commission (CFTC) acknowledges that decentralized finance (DeFi) offers both significant opportunities and risks for the U.S. financial system and can enhance the country’s leadership in technology and financial services. The CFTC’s report recommends measures such as gap analysis and increased regulatory capacity to mitigate the risks associated with DeFi, which includes issues like fraud and market volatility. Commissioner Christy Goldsmith Romero calls for dialogue between policymakers and industry players to address DeFi’s challenges, noting that many platforms are not fully decentralized nor fully centralized.
Cleanspark, a Nasdaq-listed bitcoin mining company, has purchased 60,000 S21 bitcoin miners from Bitmain, which is estimated to add 12 EH/s to its hashing power. They have also negotiated the option to buy up to 100,000 more S21 Antminers at $16 per terahash, potentially increasing their capacity to 50 EH/s. This strategic move comes as part of an industry trend of acquiring advanced mining rigs in preparation for the upcoming Bitcoin halving event.
The Honduran city of Prospera has adopted bitcoin as a unit of account for pricing, tax determinations, and payments, aiming to foster a bitcoin-based circular economy. While taxes are declared in bitcoin, they are still reported to authorities in U.S. dollars or Honduran lempiras due to regulatory and technical challenges. The city’s move, enabled by its self-regulatory status under the ZEDE designation, has faced criticism from those who see it as undermining Honduran sovereignty.
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