Cryptocurrency Market Review
This week, the cryptocurrency market attempted corrective growth, but now the decline has resumed, and most of the leading digital assets have lost a significant part of their previously won positions. Currently, BTC is trading around 39000.00 (–0.2%), ETH is at 2600.00 (–1.1%), USDT is around 1.0004 (+0.01%), BNB is around 370.00 (–3.9%), and USDC – at 0.9997 (–0.01%). By the end of the week, the total market capitalization reached 1.747T dollars, and the share of BTC was 42.41%.
An attempt at a corrective rise in prices occurred against the backdrop of the signing by US President Joe Biden of a decree on coordinating efforts to regulate the cryptocurrency sector by federal agencies. Investors welcomed this document, as it could be the first step towards establishing clear rules for regulating digital assets in the United States, which businesses are waiting for. The document assumes the intensification of the work of departments in several directions: to protect consumers and investors, to ensure financial stability, to suppress illegal activities, to maintain US competitiveness on the world stage, and financial inclusion. The most important direction is to ensure the protection of crypto market participants. Also, the possibility of developing new supervision measures over the cryptocurrency market and creating means of protection against systemic risks, fraud, illegal financing, and so on is being considered. We also note that the decree orders to speed up the study of the possibility of repaying the digital dollar, which clearly expresses the concern of the US administration about China's success in this matter. China has been actively testing the digital yuan for a long time. It could even be used during the last Olympics in Beijing. The US Federal Reserve began studying the issue only last year, and the regulator has not yet decided whether it is worth launching a digital national currency at all. Although the market greeted the document positively, it also had critics. In particular, experts were not satisfied that the government does not bring any decisions to promote the development of new digital technologies.
Later, the growth in quotations of digital assets was again replaced by a fall amid a likely tightening of supervision over the sector by the EU and US authorities. It was facilitated by the comments of the head of the US Securities and Exchange Commission (SEC), Gary Gensler. Shortly after the issuance of Joe Biden's decree, he said that the regulator would cooperate with other departments to implement the presidential directive but added that loyalty to cryptocurrencies would not interfere with seeking tougher supervision behind the industry. The EU authorities said that digital currencies are included in the category of securities, which means that they should be subject to economic sanctions imposed against Russia against the backdrop of a special military operation in Ukraine. In the meantime, US senators are proposing to require cryptocurrency exchanges to provide the personal information of customers who make transfers to private e-wallets to prevent the digital sector from circumventing sanctions. In general, instead of additional investments, which many market participants were counting on, the industry can learn more restrictions, which, in turn, is very alarming for investors and puts pressure on prices.
In other news of the week, we note that the volume of ETH blocked in the Ethereum 2.0 network has exceeded 10M coins. Traders expect the new network to be launched soon, testing of which is entering the homestretch. Next week, users will evaluate the Kiln network, the latest version, before the final transition to the Proof-of-Stake (PoS) algorithm. Bloomberg reported this week that investment holding Goldman Sachs is considering providing clients with access to a new derivative — the so-called two-way cryptocurrency options, which allow holders of cryptocurrency assets to hedge their risks or increase profitability.
Next week, quotes of most cryptocurrencies may consolidate or continue to decline.