Five Things to Know in Crypto This Week: ETFs Drive Buyer Appetite

Key Insights:

  • ETF-related news continued to grab the crypto news headlines, with Fidelity in the spotlight.
  • Binance coin (BNB) tracked the broader crypto market despite Binance facing more setbacks in Europe.
  • XRP bucked the bullish crypto market trend, with SEC v Ripple silence weighing on investor sentiment.

US Economic Indicators Delivered a Choppy Week

It was a choppy week for BTC and the broader crypto market. US economic indicators drove bets on Fed interest rate hikes in July and September before inflation numbers on Friday signaled a near-term end to the Fed’s monetary policy tightening cycle.

US consumer confidence improved in June despite persistent inflation and higher interest rates. Tight labor market conditions contributed to the improved sentiment, with inflation expectations and hopes of the Fed hitting the brakes supporting the marked improvement in sentiment.

US GDP and jobless claims numbers also beat expectations. The US economy grew by 2.0% in Q1 versus 2.6% in Q4, suggesting the economy may fare better than previously projected, despite Fed efforts to cool the economy. Initial jobless claims fell from 265k to 239k, the lowest since the end of May.

The numbers fueled bets on a July interest rate hike and raised the chances of a September move.

However, US inflation numbers on Friday cooled hawkish bets on a September move. The US Core PCE Price Index increased by 4.6% year-over-year in May versus 4.7% in April. Personal spending was also softer, rising by 0.1% versus 0.6% in April.

While the Core PCE Price Index reflected sticky inflation, the PCE Price Index increased by 3.8% year-over-year versus 4.3% in April, supporting riskier assets.

However, the NASDAQ Composite Index outmuscled the crypto market this week but trailed the crypto market for the first half of the year. The NASDAQ had its best H1 performance of this millennium. From January to June, the NASDAQ surged by 31.7% compared with a crypto market gain of 52.9%.

BTC-ETF-related news, a lack of progress in the SEC v Ripple case, and Binance woes provided direction to the crypto market.

This week, the total crypto market cap is up 0.72% to $1,157 billion.

Crypto Market Cap 010723 Weekly Chart

SEC Sees Increased ETF Interest Despite Regulation by Enforcement

Bitcoin exchange-traded fund-related news continued to draw interest this week. After the Blackrock Inc. (BLK) filing and the surprise approval of the Volatility Shares Trust 2x Bitcoin Strategy ETF, Cboe BZX Exchange refiled the request to seek SEC approval for the Wise Origin Bitcoin Trust. Previously, the SEC turned down the Fidelity West Origin Bitcoin Trust filing.

Market reaction to the increase in ETF activity was bullish, with BTC striking a current-year high of $31,475.

However, spot BTC ETF-related news on Friday dampened the mood. The SEC reportedly considered the BTC spot ETF applications lacking clarity and comprehensiveness. According to the Wall Street Journal, the SEC told NASDAQ and Cboe the Blackrock and Fidelity applications filings, among others, were inadequate.

One area of SEC focus was the lack of surveillance-sharing agreements or appropriate details about the surveillance-sharing agreements. 21Shares, ARK Invest, Blackrock, Fidelity, Invesco, Valkyrie, and WisdomTree all reportedly amended and refiled their applications on Friday.

The mixed news left BTC flat for the week. From Monday to Friday, BTC fell by 0.27% to $30,466, with the SEC news seeing BTC slide from a Friday high of $31,291 to sub-$30,000 before steadying.

BTCUSD 010723 Weekly ChartHowever, for H1 2023, BTC surged by 84.54%, outmuscling the total crypto market and the NASDAQ Composite Index.

Binance Woes Continued to Test the Appetite for Cryptos

It was another mixed week for Binance. On Wednesday, the exchange announced Paysafe Payment Solutions Limited’s decision to end EUR services in September. Increasing regulatory scrutiny following the SEC charges against Binance.US, Binance, and Binance CEO CZ is having a ripple effect across Europe.

Last week, Binance.US announced the temporary resolution to the USD withdrawal problem. Failure to find a new European banking partner would further erode Binance’s market share.

Despite the gloomy news, binance coin (BNB) recovered from a current week low of $224.6 to wrap up Friday at $240.4. This week, BNB is up 0.59%.

BNBUSD 010723 Weekly Chart

XRP Bucked the Broader Market Trend on SEC v Ripple Silence

It was another quiet week for XRP. There were no updates from the ongoing SEC v Ripple case to provide direction. The lack of Court rulings left XRP in a bearish trend pattern, with the XRP Community seeing the chances of a settlement vanish after the SEC released the William Hinman speech-related documents.

While the SEC v Ripple case remains the focal point, Ripple-related news has cushioned the downside. However, reports of US banking giant Citigroup (C) reviewing its custody partnership with Metaco after one year was also bearish.

Ripple agreed to acquire Swiss crypto custody platform Metaco for $250 million in May.

For the current week, XRP is down 3.59% to $0.4727.

XRPUSD 010723 Weekly Chart

Coinbase Takes Center Stage in the ETF Space

Coinbase (COIN) was back in the news on Friday. Just weeks after the SEC filed charges against the NASDAQ-listed platform, Cboe’s BZX Exchange named Coinbase its surveillance-sharing agreement partner. ARK Invest, Fidelity, and Invesco are among the big names filing Bitcoin ETF applications through Cboe’s BZX Exchange.

It is unclear whether the selection of Coinbase will influence the SEC’s decision.

While ending Friday with a 1.21% loss, COIN jumped by 16.4% in the week ending June 30, the best weekly outing since March 13 (+40.31%).

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