Crypto markets find a footing as discussions around regulatory clarity gain steam

Hola folks!

Welcome back to our weekly update on the world of cryptos. Today, we bring you an overview of how the crypto markets performed last week, what boosted Bitcoin's gain of steam, and the reason behind LINK shooting through the roof.

Read on to learn more about how softer-than-expected US inflation data combined with expectations for favorable regulations both at home in India and the US is boasting the crypto market. 

Crypto markets traded in a tight range, and price consolidation was present in most altcoins. However, BTC prices were on the charge due to several positives, including the slowdown in the US inflation rate, suggesting that we may be approaching the end of the "higher interest rates" era. Besides the macro triggers, the disclosure of the Spot BTC ETF filings revealed a historic number of hedge funds and institutional funds seeking Bitcoin exposure. 

A few interesting revelations included Blackrock's IBIT having over 400 institutional clients, further cementing its place as the most successful ETF launch in history, and Wisconsin’s state pension fund opening a >$100 million position via the spot BTC ETFs. Further, weekly inflows were also overtly positive, sending prices back above the $66k level. Even trading venue CME is now actively considering launching spot BTC trading. 

This rally supported the overall crypto market cap, bouncing back above the $2.5 trillion level. However, ETH prices didn't respond as sharply to the broader market rally, staying mostly flat but back above the $3.1k level. Crypto market cycle indicators like BTC dominance and the ETH/BTC ratio hint at a flight towards the safest crypto asset, BTC, and suggest that we are still far from "Alt Season."

Interesting developments also came from the US regulatory landscape. The Biden administration's veto of not allowing TradFi banks to custody crypto (SAB 121 accounting standards) was shot down in the US Senate after meeting a similar fate in the House. Several Democrats broke party lines and voted to repeal the standards that would block TradFi giants from keeping crypto custody. Biden's White House is now under pressure to revisit its veto, as crypto regulations have become a political issue during the US election season.

Closer home, in a significant positive for the sector, the Indian markets regulator SEBI suggested that a multi-body regulatory oversight structure is necessary for crypto, with stablecoins falling under the RBI's ambit while tokens qualifying as securities and ICOs coming under SEBI's jurisdiction.

The broader markets traded in a tight range but were buoyed by Bitcoin's rise and were mostly in the green. Chainlink's LINK led the pack, which pumped >25% after completing a pilot with DTCC to accelerate fund tokenization, with JPMorgan, Templeton, and BNY Mellon participating. 

Solana's SOL, too, had a green week as activity on the network rose due to the rise of the pump.fun craze, which allows instant meme coin mints. Another ETH competitor, NEAR, also had a week of solid positive price gains as its active addresses hit an all-time high. There was similar exuberance in Fantom's token FTM as they announced plans to launch a new blockchain, Sonic, that would have parallel executing VMs. 

PEPE witnessed a surge in whale account activity, pushing it to a new all-time high. Another meme coin that saw positive price gains over the week was FLOKI, which pumped on the news of Revolut's listing and a new community proposal to burn 15 billion tokens. Overall, meme coins are back in action, as Gamestop's GME frenzy is back with retail trader RoaringKitty making a comeback on X. 

ONDO token continued to rise, riding on the RWA tokenization narrative. A new entrant to the Top 100 tokens was Gnosis Safe's SAFE, which pumped >20% as it became transferable. It also hinted at launching a new points program. 

On the flip side, after weeks of positive gains, Render Network's RNDR, Telegram's TON, and Ethena's ENA saw profit booking and came under selling pressure. Meanwhile, Worldcoin's WLD slipped majorly in price after an X thread analysis criticized it for its low float and lack of actual ties with OpenAI. 

• BTC  $66,942 ⏫ 5.95%

• SOL $177 ⏫ 21.15%

• LINK $16.80 ⏫ 23.53%

• NEAR $7.89  ⏫ 9.84% 

(All data here is as of 3.02 p.m., 20 May 2024)

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

• India’s market watchdog SEBI has recommended that several regulators oversee trade in cryptocurrencies, documents show, the strongest signal to date that at least some authorities in the country are open to allowing the use of private virtual assets. Read more here. 

• The Depository Trust and Clearing Corporation (DTCC), the world’s largest securities settlement system, completed a pilot project with blockchain oracle Chainlink and multiple major U.S. financial institutions, aiming to help accelerate the tokenization of funds. Market participants included American Century Investments, BNY Mellon, JP Morgan, etc. Read more here. 

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

See you later, folks! 👋

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