Five Things to Know in Crypto This Week: SEC v Coinbase and BTC-Spot ETFs

Key Insights:

• Crypto market recovers from a Wednesday slump on progress toward BTC-spot ETF market.
• SEC asked Judge Failla to consider the Terraform Labs ruling in the case against Coinbase.
• Senator Elizabeth Warren and the anti-crypto army remained a focal point.

Crypto Market Cap Hits Highest Level Since May 2022

The total crypto market cap was up 0.75% to $1,617 billion from Monday to Saturday morning. Progress toward a BTC-spot ETF market drove buyer demand for cryptos. However, fake news and increasing scrutiny of the US crypto space delivered a volatile week.

The Total crypto market cap rose to a Tuesday high of $1,726 billion before sliding to a Wednesday low of $1,501 billion. Significantly, the crypto market cap reached $1,700 billion levels for the first time since May 2022.

BTC-Spot ETF Highs and Lows

Progress toward a BTC-spot ETF market continued in the week ending January 5. However, there were highs and lows for BTC and the broader crypto market.

On Wednesday, rumors the SEC could reject or postpone the BTC-spot ETF applications sent the crypto market into a tailspin. BTC slid by 4.42% on Wednesday but recovered from a session low of $41,495, ending the day at $43,028.

Bloomberg Intelligence ETF Analyst James Seyffart addressed the rumors while providing updates on BTC-spot ETF-related activity. On Friday, Seyffart noted that all 11 BTC-spot ETF issuers remained in the Cointucky Derby, adding that they’re not over the finish line but close.

However, there was another BTC-spot ETF curveball late into the Friday session. The window for comments was open until the end of the Friday session. Better Markets submitted comments shortly before the window for comments closed and the window for approvals opened. Significantly, the President and CEO of Better Markets is reportedly close with SEC Chair Gary Gensler.

Uncertainty about the influence of the comments letter on the SEC tested buyer demand for BTC and the broader market. Despite the highs and lows, BTC remains in positive territory. Monday through Saturday, BTC was up 3.77% to $44,009.

Senator Elizabeth Warren and the Anti-Crypto Army

On Thursday, the US House Committee on Financial Services announced the next round of sub-committee hearings. One drew the attention of the crypto community. On January 10, the sub-committee on Capital Markets and Digital Assets, Financial Technology & Inclusion will hold a hearing entitled “Regulatory Whiplash: Examining the Impact of FSOC’s Ever-Changing Designation Framework on Innovation.”

Amicus Curiae attorney John E. Deaton responded to the announcement on X (formerly Twitter), saying,

“If you want someone to testify who actually represents the interests of token holders – not crypto companies – and who has taken on the SEC and who’s helped expose just how much Gary Gensler does NOT protect investors – I volunteer my services.”

Attorney Deaton represented 75k XRP holders in the SEC v Ripple case, resulting in the Programmatic Sales of XRP ruling.

SEC v Coinbase: SEC Asks Judge to Consider the Terraform Labs Ruling

The Securities and Exchange Commission (SEC) requested Judge Katherine Failla consider the recent SEC v Terraform Labs ruling in the SEC v Coinbase (COIN) case. In the January 4 filing, the SEC argued the Terraform Labs ruling further supports its opposition to Coinbase’s Motion for Judgment.

Significantly, the SEC highlighted,

“The Terraform court issued an opinion on the parties’ cross-motions for summary judgment, granting summary judgment for the SEC on its claims that the defendants offered and sold unregistered crypto asset securities in violation of Section 5 of the Securities Act of 1933. In so doing, the Terraform court resolved in the SEC’s favor issues relevant to the consideration of Defendants’ motion in this case.”

Coinbase shares gave up ground on Friday, falling 1.09% to $153.98. In a brutal week for Nasdaq-listed stocks, Coinbase ended the week down 11.5%. The Nasdaq Composite Index ended the week ending January 5 down 3.25%.

Other News

US Jobs Report: BTC and the broader crypto market reacted to a hotter-than-expected US Jobs Report. Wage growth unexpectedly picked up in December, with the unemployment rate unchanged at 3.7%. Average hourly earnings increased 4.1% year-over-year versus 4.0% in November. Nonfarm payrolls jumped 216k versus 173k in November. BTC pulled back to sub-$43,500 before ending the day at $44,264.