Crypto markets consolidate as macro uncertainty and regulatory concerns loom

Hola folks!

Happy Tuesday! I hope you guys had a great weekend playing with colors and gorging on festive food. The crypto market was also busy playing a green Holi yesterday as the top cryptos found their bullish feet after a week of volatility and consolidation. 

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Crypto markets had another volatile week. Macro uncertainties around rate cuts and inflation resulted in a sell-off in risk-on assets like crypto, sending the overall market cap to just below $2.7 trillion. 

The US inflation data came in higher than expected, challenging the market expectations for rate cuts. The Fed surprised the market by holding interest rates steady but confirming that it still expects to have 3 interest rate cuts by the end of the year. Markets rejoiced the rate cut expectations briefly but again traded lower amid heightened volatility, as ETF outflows dominated the news. 

The market leader, Bitcoin, came under selling pressure after weeks of positive gains, with prices dropping to as low as $61k and finally settling just below $66k. A primary reason for the fall can be attributed to the massive outflows from Grayscale's GBTC ETF, which exceeded $1.2bn during the week and were larger than the continuous spot ETF purchases from the other providers. Blackrock and Fidelity continue to lead the race for accumulation, with BTC holdings now over $15bn and $9bn, respectively. It's worth highlighting that over the weekend, BTC prices started moving higher again and are back above $70k, pushing the overall crypto market cap to almost $2.8 trillion. 

It was an important week for the Ethereum ecosystem too, with mixed developments affecting the overall price. On the positive side, BlackRock has announced the launch of its first tokenized fund on Ethereum in partnership with Securitize, which could unlock a wave of capital to move on-chain. On the flip side, the US SEC decided to head to the courts to prove that Ethereum's token ETH is a security, and we are now in a long-drawn legal battle. ETH is currently trading just above the $3.6k level after a highly volatile week.

It was a mixed bag for the broader crypto market. Most tokens came under selling pressure after weeks of a broader rally but then witnessed a surge in prices as the bulls came back. 

The froth in the Meme coin universe started to fizzle out with healthy corrections across the board, with PEPE, BONK, and WIF getting punished the most. However, investor interest in the space returned over the weekend, as these tokens were back in green. 

A constant outperformer has been Solana's SOL, which continues to surge in prices as it witnesses rising DEX volume and DeFi TVL. 

In the Layer 1 competitor space, Fantom's FTM had a great week, surging by >30% last week as they announced an upcoming Mainnet upgrade, Sonic, which founder Andre claimed to be doing 10k TPS already. 

Avalanche's AVAX prices too, pushed higher as Binance announced a USDC-margined AVAX Perpetual Contract with up to 75x leverage. Maker's MKR, too, showed strong price action as they plan to change positive rate systems and benefit stakers. 

A newly launched token on CoinSwitch, SUI also had a very positive week as it announced plans for a scaling upgrade. Meanwhile, its rival Aptos surged in price after announcing a gaming partnership with Google Cloud. 

• BTC $70,720 ⏫ 10.22%

• ETH $3,652 ⏫ 10.30%

• SOL $194 ⏫ 6.76%

• DOGE $0.1802 ⏫ 37.63%

(All data here is as of 1.50 p.m., 26 March 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• BlackRock officially unveiled its tokenized asset fund on the Ethereum network on March 20. The BlacRock USD Institutional Digital Liquidity Fund is represented by the blockchain-based BUIDL token, is fully backed by cash, US Treasury bills, and repurchase agreements, and will provide yield paid out via blockchain rails every day to token holders, according to a press release. Securitize will act as a transfer agent and tokenization platform, while BNY Mellon is the custodian of the fund’s assets, BlackRock said. Read more here. 

• The London Stock Exchange (LSE) plans to introduce crypto exchange-traded notes (ETNs) tracking Bitcoin and Ether performance on May 28. ETNs will be limited to professional investors due to regulatory restrictions. Read more here. 

Before you get on with your day, don’t forget to flex those brain muscles with our weekly crypto crossword.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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