Cryptocurrencies dropped more than 1 percent in the past 24 hours amidst uncertainty surrounding the debt ceiling crisis, hawkish comments from Fed officials and fears of renewed regulatory action against the crypto industry.
Political impasse surrounding the debt ceiling crisis in the U.S. continued, amidst fears that the debt ceiling limit could be exhausted as early as June 1. Uncertainty over the unprecedented escalation in the debt ceiling crisis weighed on sentiment, with financial markets bracing for a potential default by the U.S. Meanwhile, President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet on Tuesday to discuss ways and means to end the deadlock.
Hawkish comments from Fed officials that downplayed the likelihood of a rate cut also weighed on sentiment.
Uncertainty over the regulatory environment for cryptocurrencies, also swayed sentiment amidst fresh developments in the legal tussle between the Securities and Exchange Commission and the Coinbase cryptocurrency exchange. SEC has formally responded to the petition for a Writ of Mandamus to the SEC filed by Coinbase. In a document filed before the U.S. Court of Appeals for the Third Circuit, the SEC argued that mandamus was an extraordinary remedy that required the petitioner to show a clear and indisputable right to relief. Coinbase does not and cannot demonstrate such a right, the SEC claimed. The SEC also argued that neither the securities laws nor the Administrative Procedure Act imposed on it an obligation to issue the broad new regulations regarding “digital assets” that Coinbase has requested.
Reports of raids by regulators on South Korean cryptocurrency exchanges Bithumb and Upbit also impacted sentiment.
The Dollar Index which measures the Dollar’s strength against a basket of 6 currencies dropped 0.07 percent overnight to 102.36. The day’s trading range was between 102.20 and 102.57.
Overall crypto market capitalization has decreased to $1.13 trillion, from $1.14 trillion a day earlier.
51st ranked Conflux (CFX) topped the price charts with an overnight rally of more than 9 percent. CFX is the best performer on a year-to-date basis as well with a gain of 1319 percent in 2023.
31st ranked Lido DAO (LDO), followed with overnight gains of close to 4 percent amidst a successful completion of the V2 upgrade on the liquid staking platform. LDO has gained 14 percent in the past week.
89th ranked XDC Network (XDC) shed 6.6 percent and is the biggest laggard on an overnight basis. 45th ranked Rocket Pool (RPL) and 84th ranked Injective (INJ) also lost more than 4 percent overnight.
Bitcoin is trading at $27,053.47, having shed 1.1 percent in the past 24 hours and 2.3 percent in the past week. Year-to-date gains have fallen to 63 percent. Bitcoin currently dominates 46.5 percent of the overall crypto market.
Ethereum is trading at $1,815.63, down half a percent on an overnight basis and 1.7 percent on a weekly basis. Ethereum, which dominates 19.4 percent of the overall crypto market has gained 51 percent in 2023.
Meanwhile, the CoinShares’ Digital Asset Fund Flows Weekly report on institutional investments showed a fall in activity, with an outflow of $54 million for the week ended May 12. Of this, Bitcoin products accounted for outflows of $37.5 million whereas Short Bitcoin products recorded outflows of $10.4 million.
The country-wise analysis shows outflows of $30.5 million in Germany, followed by United States that recorded outflows of $12.4 million. Cumulative AUM stood at $33.82 billion.
Anxiety continues to linger over the nature of impact the ongoing debt ceiling crisis would have on digital assets including Bitcoin. Analysts appear to be at odds, with one group holding the view that raising the ceiling would lead to additional liquidity chasing risky assets like crypto. There is also the view that the extension of the debt ceiling would allow the Fed to continue its quantitative tightening, resulting in a liquidity drain and downside pressure on Bitcoin. Whatsoever, a default is widely seen as damaging to the U.S. Dollar, potentially lifting demand for safe haven assets like gold and Bitcoin.
For More Cryptocurrency News, visit rttnews.com
Source: Read Full Article