Bitcoin on track for 6% weekly loss as investors avoid risky bets after hot inflation data
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Bitcoin (BTC-USD) is on track to end the week ~6% lower, in line with broader stock markets, as investors stayed away from risky bets amid continued macroeconomic uncertainty fueled by hotter-than-expected inflation data.
The data cemented fears that the Federal Reserve will have to tighten policy for longer than expected. Markets are pricing in ~75% chance that rates will top 5.25% by the end of the Fed's June meeting.
"In our view, the U.S. is experiencing a series of rolling recessions, including downturns in housing, cryptocurrency, several areas within Big Tech, industrial activity and capital spending," said Wolfe Research analyst Chris Senyek, retaining his intermediate-term bearish call for stock markets.
As for bitcoin (BTC-USD), risk aversion seems to have halted its brief rally last week sparked by higher-than-usual short liquidations. Bitcoin failed to keep itself above the $25K level, and traded in the $23.04K-$25.13K range this week.
"Bitcoin (BTC-USD) appears stuck in a range right now and that might only change if we see risk aversion run wild on Wall Street," said Edward Moya, senior market analyst, OANDA.
The global crypto market cap currently stands at $1.06T, down 3% over Thursday, according to CoinMarketCap.
Regulatory Crackdown
- The SEC and New York's financial regulator filed objections to Binance.US' deal to acquire bankrupt Voyager Digital's (OTCPK:VYGVQ) assets for ~$1B over violation of certain laws.
- The FTC is investigating Voyager (OTCPK:VYGVQ) for alleged "deceptive and unfair" marketing of crypto to the public.
- Sam Bankman-Fried, disgraced cofounder of failed crypto exchange FTX (FTT-USD), has been slapped with additional criminal charges from federal prosecutors.
- The SEC is said to be investigating whether stablecoins are issued in violation of investor protection laws.
- The NYDFS bolstered its ability to identify illegal activity among crypto entities with new risk monitoring tools.
- U.S. financial regulators warned banks of liquidity risks associated with certain sources of funding from crypto-related entities.
Countries' Moves on Crypto
- Hong Kong will make crypto trading on licensed exchanges legal for all its residents, starting June 1.
- The Bank of Israel laid out a number of proposed rules for stablecoin activity, in a move motivated by the demise of terraUSD (UST-USD).
More Layoffs
- Polygon Labs reduced its workforce by 20% as it consolidates a number of its units.
- Dapper Labs is laying off 20% of its workforce in its second round of job cuts in less than four months.
- Crypto intelligence startup Messari reduced its headcount by 15% owing to market headwinds.
- But bucking the trend is crypto startup Circle Internet, which plans to boost its headcount by up to 25% in 2023.
Notable News
- Coinbase (COIN) debuted a testnet of its own ethereum-powered blockchain network to make it easier for developers to build decentralized applications.
- FTX Japan has become the first subsidiary of Bankman-Fried's crypto empire to resume customer withdrawals.
Bitcoin Price
- Bitcoin (BTC-USD) slipped 3.1% to $23.19K at 6.59 pm ET and ether (ETH-USD) fell 2.6% to $1.61K.
- SA contributor The Digital Trend expects a selloff in bitcoin (BTC-USD) in the short term, providing what could potentially be the last chance to buy the dip. However, there's no guarantee that it has bottomed.
Crypto-related stocks that fell on Friday include: Hut 8 Mining (HUT) -8.4%, Marathon Digital (MARA) -8.4%, Riot Platforms (RIOT) -7.9%, CleanSpark (CLSK) -6.8%, Coinbase (COIN) -6.3%.