Five Things to Know in Crypto Today: Fed Fear Grips

Key Insights:

• Fed Chair Powell sends the crypto market into a tailspin on unexpectedly hawkish testimony on Capitol Hill.
• Optimism toward a Ripple victory in the SEC v Ripple case resurfaces to deliver XRP price support.
• SEC gets a wrong ruling, with a bankruptcy judge approving the Binance.US acquisition of Voyager Digital.

It has been a choppy first quarter for the crypto market. In January, easing FTX contagion risk delivered a breakout January. However, market sentiment has since deteriorated. Intensifying regulatory scrutiny, US lawmaker chatter, and Fed Fear have led the crypto market cap back to sub-$1,000 billion.

Fed Chair Powell Sinks the Crypto Market on Hawkish Testimony

On Tuesday, Fed Chair Powell sent riskier assets into a tailspin. Pivoting from previously dovish comments, the Fed Chair spoke of the need for higher rates to combat inflation, noting that economic data was better than expected. Powell had previously raised hopes of a near-term end to the Fed’s belt-tightening after signaling initial signs of disinflation.

In response to hawkish testimony, the crypto market cap fell by $7.51 billion to $980.91 billion. Market conditions deteriorated further this morning, with the crypto market cap down $7.66 billion.

The pullback came ahead of a second day of Fed Chair Powell testimony that could produce another sharp sell-off. US ADP nonfarm employment change and JOLTS Job Openings could incentivize the Fed Chair to deliver another risk-off session.

XRP Joins the Broader Crypto Market in the Red Despite Renewed Optimism

Investor optimism toward a Ripple victory in the SEC v Ripple case resurfaced this week. On Tuesday, XRP bucked the broader crypto market trend, rising by 2.68% to end the day at $0.38015. Significantly, the bullish session came amidst a bearish market reaction to Fed Chair Powell’s hawkish first day of testimony.

Court rulings on motions against expert testimony favored the Defendants, tilting the scales in favor of a Ripple victory. Notably, the decisions also raised the hope of an imminent conclusion to the case that has been ongoing since December 2020.

Crypto investor focus on the case has increased as the broader crypto market grapples with regulation by enforcement and increased regulatory and lawmaker scrutiny.

This morning, XRP was down 1.10% to $0.37598.

Judge Approves the Binance.US Acquisition of Voyager Digital

On Tuesday, Bankruptcy Judge Michael Whiles approved the Binance.US acquisition of Voyager Digital. Binance.US will pay $20 million in cash and take on $1.3 billion in customer crypto assets.

Voyager Token (VGX) responded to the news, rallying 22.26% on Tuesday. However, VGX joined the broader crypto market in the red on Fed Fear weighing. This morning, VGX was down 1.24% to $0.4784.

Silvergate Bank in Talks with the FDIC to Avoid Collapse

On Friday, the crypto market tumbled by $41.41 billion as investors digested the latest Silvergate Bank news that raised fears of an imminent collapse.

News of Silvergate Bank entering talks with the Federal Deposit Insurance Corporation (FDIC) provided some comfort. While averting a collapse would be good news, the crypto market may face more US lawmaker wrath as a Main Street name suffers in the hands of the crypto market.

On Tuesday, Silvergate Capital (SI) share prices fell by 3.70% to $5.21.

Shibarium Network Announces Shibarium Upgrade

Overnight, Shibarium Network announced the launch of the Shibarium Public Beta, saying,

“We’re thrilled to announce that Shibarium Public Beta will be launching THIS WEEK!”

The crypto market showed a muted reaction to the news, however. Fed Chair Powell testimony overshadowed the update of the heavily anticipated launch.

Following a 0.27% decline on Tuesday, SHIB INU (SHIB) was down 3.42% to $0.00001074.