Daily News | US Stablecoin Bill Proposed Amidst Crypto Market Growth and Industry Setbacks; Fed's Beige Book In Focus

Crypto Daily Digest: Bitcoin and Ethereum Rise While Start-ups Collapse; US Stablecoin Bill Proposed

Bitcoin and Ethereum saw notable price increases in the past week, rising by about 8.5% and 14.5%, respectively. The Shapella upgrade for Ethereum has brought credibility back to the market, while other altcoins like ARB, SOL, and IMX also saw increases, with the overall crypto market up 9% last week. Meanwhile, equities closed down on Friday following quarterly earnings season results.

In contrast to the bullish crypto market, the cryptocurrency industry has suffered in the last year, with bankruptcies and regulatory scrutiny being left in its wake. Start-ups like FTX, Blockfi, Celsius, and Voyager Digital have collapsed, and banks like Signature Bank, Silicon Valley Bank, and Silvergate Capital Corp have also failed. Private funding for crypto start-ups has fallen 80% from its all-time high to $2.4bn in Q1 2023.

In regulatory news, the U.S. House Financial Services Committee has released a draft Stablecoin bill proposing a moratorium on Stablecoins backed by cryptocurrencies and a study on the potential impact of a CBDC issued by the Federal Reserve. The bill has been circulating among lawmakers since last fall and follows two incidents involving Stablecoins in the past year. A subcommittee will hold a hearing on Stablecoins, and the full committee will hear from SEC Chair Gary Gensler.

Crypto Total Market Cap $1.243T (-0.02%) - Neutral Outlook

Last week, the overall cryptocurrency market experienced an increase of almost 9% due to an influx of funds. While Tradingview’s chart may not provide an exact representation of the crypto market capitalization, it serves as a supplementary tool for us to gain a better understanding of the larger picture. Through the implementation of the Wyckoff methodology, we can observe that the crypto market capitalization has been consistently showing a bullish trend after undergoing various accumulation phases over the past 10 months.

As the market capitalization approaches the crucial supply zone at around $1.30T - $1.32T, a possible pullback to $1.17T - 1.15T can be anticipated. Alternatively, if the trend continues and the market capitalization surpasses the supply zone to reach the monthly level of 1.37T, a pullback to the supply zone is likely to occur, along with a minor distribution phase on lower timeframes.

Macro: Investors Await Fed’s Beige Book Amidst Swaps Traders’ Bets for Rate Hike

Last week, US stocks saw a rise, with the S&P 500 up 0.8% and the Nasdaq 100 up 0.1%. The financial sector led the charge, with JPMorgan Chase & Co. and Citigroup Inc. posting strong earnings. Treasury yields also rose, with the two-year reaching a weekly high of around 4.1%. Charles Schwab Corp. and State Street Corp. are set to release reports this week, which investors will closely watch for signs of the sector’s health.

On Monday, US stock futures slightly increased, while Asian share benchmarks pointed to a mixed open. Swaps traders are betting on a quarter-point interest rate hike by May, with investors eagerly anticipating the release of the Fed’s Beige Book and commentary from officials. Inflation expectations also jumped in April, with consumers seeing prices climbing 4.6% on an annual basis.

However, experts are warning that technocrats worldwide are caught in an intellectual debt trap, with a lack of urgency to help impoverished nations concerning. The IMF predicts a return to near 100% global debt-to-GDP ratio by 2028, with calls for more consequential action, including debt forgiveness of up to $520 billion. Zambia’s Treasury Minister has even warned of layoffs of teachers and health workers if help is not received soon. Poor countries are paying the price for central banks in developed nations’ inflation fight, with economists warning of a “lost decade” in the development of poor economies.