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News/Bitcoin sustains pre-FOMC sideways as White House economic report attacks crypto

Bitcoin sustains pre-FOMC sideways as White House economic report attacks crypto

Mar 22 2023

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The White House today released a 513-page annual report that triggered a backlash from the crypto community, with Fred Ehrsam, co-founder of digital asset investment firm Paradigm, remarking that 15% of it was dedicated to “crypto FUD.”

In the report, regulators highlighted digital assets as “highly volatile and subject to fraud,” and their design as often displaying “an ignorance of basic economic principles.” The writers argued that crypto assets have failed to provide any benefits that were claimed, while their costs have negatively impacted consumers, the financial system, and the environment. They also noted that many crypto assets have “no fundamental value.”

Bitcoin, the leading cryptocurrency, was mentioned 75 times in the report, with the writers stating that it doesn’t fulfill two of the three characteristics of money and isn’t as effective as the US dollar. In contrast, the report highlighted the possibility of introducing a digital form of money via Central Bank Digital Currency (CBDC). The news, along with Sushi DAO’s SEC subpoena, is unlikely to assuage the crypto community as they believe the industry is becoming a “major target” for U.S. authorities.

In a recent letter to the Public Company Accounting Oversight Board, prominent U.S. Senator Elizabeth Warren and her colleague Ron Wyden discussed the risks of “sham audits” related to cryptocurrency, particularly regarding “proof of reserve” agreements made by outside firms on behalf of auditors. Nic Carter, general partner at Castle Island Ventures, criticized the Senator’s arguments as she wrongly equates “Proof of Reserves” and “audit,” while trying to prevent banks/CPA firms from supporting the crypto space.

Meanwhile, Texas House of Representatives member Cody Harris has introduced a Bitcoin mining bill in the state that recognizes the right to mine the cryptocurrency there. Harris also called for support in protecting individuals who code or develop on the Bitcoin network.

Despite recent crackdowns and uncertainty, Oliver Linch, the CEO of Bittrex Global, foresees traditional finance giants embracing crypto to take advantage of the opportunities offered by the industry. According to Linch, institutional adoption of crypto won’t impede progress but rather expedite innovation, given that numerous financial giants established crypto divisions during the bear market. Linch further emphasizes that more collaborations between these firms with genuine crypto players will catalyze significant changes.

The Federal Reserve’s decision on interest rates is being watched closely, as the U.S. central bank weighs the potential impact of inflation concerns against financial stability. The general consensus is that there will be an increase of 25 basis points, although some analysts believe that the Fed may opt to leave rates unchanged due to recent bank failures. A CNBC survey shows mixed opinions among traders regarding Fed rate hikes, with only 52% indicating that they believe regulators should increase rates.

Since inflation is said to be trending downward and Bitcoin price remains strong during recent financial crashes, cryptocurrency trading platform BitMEX expects risk appetite to recover. However, BitMEX also suggests that if a Fed pivot doesn’t come, Bitcoin’s price could fall back to earlier lows.

Popular trader Crypto Tony predicts sideways movements in the market until the FOMC and urges investors to be cautious. While Tony’s target for a possible FOMC rally is \(30,000, Michaël van de Poppe, founder and CEO of trading firm Eight, [focuses](https://cointelegraph.com/news/bitcoin-30k-bets-greet-fomc-as-analyst-warns-over-long-liquidations) on a target of \)28,700. On the other hand, analyst Justin Bennett recommends a more conservative approach, saying a short squeeze may result in $30,000, but a sudden dive could have the opposite effect.

Blockchain analytics firm Glassnode seems to agree with Poppe as they noted \(28,700 as an important level to watch. Bitcoin's price has surpassed the \)28,000 level, which is the cost basis of the whales from 12 March 2020. Although the other whale groups can create resistance to Bitcoin price, there’s a possibility that the $28,700 cost basis of this whale cohort could also cause some difficulties for the asset.

In response to comments that institutions have become net sellers of Bitcoin in 2023, James Butterfill, CoinShares’ head of research, suggests that these flows may be due to the demand for liquidity during the recent banking crisis. On-chain analytics firm Santiment added that major whale sell-offs haven’t occurred during the current bullish trend. However, as the prices continue to rise, whale buyers may need to join the market to sustain the rally.

Bitcoin (BTC) continued with its sideways movement, trading above $28,000 during the day. Ethereum (ETH), nevertheless, saw a small drop along with some other major non-stablecoin cryptocurrencies such as Binance Coin (BNB) and Lido stETH (STETH). Due to fundamental catalysts, Ripple (XRP) and Cardano (ADA) have been shining as the top-performing assets among the 10 biggest cryptos today.

Despite the U.S. government’s struggles to increase adoption of its CBDC, Nigeria and China have taken further steps toward its implementation. Nigeria is experiencing a rise in CBDC usage due to the scarcity of fiat money in the country. Meanwhile, in China’s Lianyungang and other cities within the digital yuan pilot zone, citizens can now use the People’s Bank of China’s digital yuan app to pay for their social security and basic pension insurance fees.

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Top altcoin gainers and losers

Gainers:

Ripple XRP (+11.31%)

Cardano ADA (+7.09%)

Algorand ALGO (+6.57%)

Losers:

Conflux CFX (-9.10%)

XDC Network XDC (-7.60%)

Immutable X IMX (-7.25%)

NFT Market Map

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Bamboo Color (+1,900.71%), a new NFT collection with an empty Twitter feed and not much additional information, suddenly joined other blue-chip projects on the trading volume leaderboard.

Coin360 spotted a 1,900.71% spike in the collection’s trading volume over the past 24 hours. Data from NFTGo shows that it has seen a 5x increase in sales, with its average price soaring by 142% to 8.63 ETH.

Yuga family, together with MG Land (-14.31%), came back to the top while BLOCKLORDS BANNERS (+10.98%) and Gods Unchained (-16.10%) pulled back from yesterday’s hype.

Coin360 Daily Digest

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Here’s a rundown of the major crypto market news from today.

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Disclaimer: None of the information here constitutes financial advice and market participants are advised to conduct their own research since cryptocurrencies are speculative assets with considerable risks.

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