Five Things to Know in Crypto This Week: Cryptos Outmuscle the NASDAQ
- Fed Chair Powell failed to spook crypto investors despite hawkish forward guidance that left the NASDAQ Composite Index in the red.
- ETF-related news supported a breakout week, with an unexpected approval of the Volatility Shares Trust 2x Bitcoin Strategy ETF surprising the markets.
- However, binance coin (BNB) trailed the broader market on intensifying regulatory scrutiny.
Investors Brush Aside Hawkish Fed Chair Powell Testimony
Fed Chair Powell gave two days of testimony on Capitol Hill, sticking to the hawkish script from the FOMC press conference.
On Wednesday and Thursday, the Fed Chair reiterated the need for two more interest rate hikes to tame inflation. In the previous week, FOMC members raised the peak Fed Funds Rate to 5.6%
Economic indicators continue to support a hawkish Fed monetary policy outlook. The all-important Services PMI slipped from 54.9 to 54.1 in June, easing immediate fears of a US recession. However, recessionary jitters resurfaced this week, with the markets showing disappointment with the PBoC move to support the Chinese economy.
Bearish sentiment left the NASDAQ Composite Index down 1.44% for the week. Significantly, the Index had the first weekly loss since mid-April.
In contrast, the total crypto market cap is up 12.12% ($124.74 billion) Monday through Saturday morning.
BTC-ETF-related news supported BTC and the broader crypto market throughout the week.
SEC Approves Leveraged Bitcoin ETF
In a surprise move on Friday, the SEC approved the request to launch the Volatility Shares Trust 2x Bitcoin Strategy ETF, fueling a Friday breakout. The 2x Bitcoin Strategy ETF seeks two times the excess return of the S&P CME Bitcoin Futures daily Roll Index daily and will launch next week.
Volatility Shares Trust filed the registration of the ETF with the SEC on March 29, 2023. Significantly, the 2x Bitcoin Strategy ETF is a leveraged product, raising questions about the SEC’s previous decisions to decline spot BTC ETF filings.
However, the approval could deliver the much-needed inflow of sticky institutional money, further establishing digital assets as a mainstream asset class.
BTC responded positively to the news, striking $31,430 before easing back.
BTC is up 16.72% this week, with BTC returning to $31,000 for the first since June 2022.
Binance Troubles Are Set to Continue
On Friday, Belgium’s Financial Services and Markets Authority (FSMA) issued Binance with an order to cease crypto services in Belgium, saying,
“The FSMA has noted that Binance is offering and providing exchange services in Belgium between virtual currencies and legal currencies, as well as custody wallet services, from countries that are not members of the European Economic Area. The FSMA has therefore ordered Binance to cease, with immediate effect, offering or providing any and all such services in Belgium.”
Binance is facing intensifying regulatory scrutiny across Europe and the US. Binance is at risk of a domino effect in Europe, with other regulators likely to investigate Binance’s dealings.
This week, BNB is up just 1.35% to $247, trailing the broader crypto market on regulatory scrutiny.
Investor Jitters Over the SEC v Ripple Case Resurfaced
It was a quiet week for XRP, with no updates from the ongoing SEC v Ripple case to provide direction. The lack of Court rulings left investors on a nervous footing, with the release of the heavily anticipated William Hinman speech-related documents removing the hopes of a settlement.
However, it wasn’t all bad news for Ripple and the XRP Army. On Thursday, the Monetary Authority of Singapore granted Ripple an in-principal approval for a Major Payments Institution License.
Ripple CEO Brad Garlinghouse shared the news, saying,
“As a major global financial center, Singapore led the way in taking a pragmatic, innovation-first approach to crypto – we’re incredibly proud @ Ripple is one of a handful of firms (<20) to receive in-principal approval for a MAS MPI license for digital payment token services!”
On Saturday morning, XRP was up 1.41% to $0.49365.
NFTs Were Back in the News with the Launch of a Ronaldo Collection
According to the announcement,
“The time has come to celebrate a legend and immerse yourself in the worlds of Web3 and football through the power of NFTs. Binance, in partnership with Cristiano Ronaldo, is thrilled to announce the launch of our second NFT collection together on July 3, 2023.”
The collection will recognize Ronaldo’s GOAT status. Fans can select from 20 digital designs that capture his most iconic goals. Each includes exclusive rewards – including a training session with Ronaldo himself.