US Crackdown on Crypto: Stifling Innovation and Global Reserve Status

According to experts in the industry, the United States’ crackdown on crypto could impede innovation and diminish the country’s strength. Mati Greenspan, the chief of crypto research firm Quantum Economics, expressed that US regulators have been hostile to crypto right from the start. The recent legal warnings issued to crypto companies like Coinbase and Paxos suggest that further crackdowns may be imminent. Greenspan cautioned that such efforts could reduce the global reserve status of the US dollar.

Antagonistic Regulatory Environment: Driving Crypto Investment Abroad

Adrian Przelozny, CEO of Australian crypto exchange Independent Reserve, stated that the action against Coinbase reflects an antagonistic environment for the crypto industry in the US. This situation may drive investment, jobs, and future innovation to other regions such as Singapore, Hong Kong, and Australia.

The Silver Lining: Clearer Regulations for the Crypto Industry

Przelozny’s concern about the potential departure of crypto companies from the US is shared by Brett Quick, head of government affairs at Crypto Council for Innovation. Quick, however, believes that these actions may lead to clearer regulations for the crypto industry. In fact, a bipartisan bill has been introduced by Congressman Tom Emmer and Darren Soto to provide greater clarity for the industry.

Coinbase CEO vs SEC: A Clash of Perspectives

On the other hand, Brian Armstrong, the CEO of Coinbase, has expressed his dissatisfaction with the SEC’s handling of the matter. While other regulators have been cooperative, the SEC has been an “outlier,” according to Armstrong.

The agency’s recent investor alert on crypto risks appears to support his point, as it states that “investments in crypto asset securities can be exceptionally volatile and speculative.” The CEO of the Crypto Council for Innovation, Sheila Warren, said that allowing such one agency to shape the trajectory of an entire innovation for the country is not acceptable, especially when that agency is unwilling to engage with the industry it is attempting to regulate.

Amidst the increased scrutiny from authorities, a recent investigation by CNBC has further exacerbated the situation for the crypto community, in which it alleges that Binance staff have been aiding Chinese users to bypass the country’s strict crypto regulations. Duke University professor and former FDIC chief innovation officer, Sultan Meghji, has raised concerns about the exchange’s KYC and AML efforts, stressing the potential national security risks.

Crypto Market Resilience Amidst Regulatory Pressure

Surprisingly, despite the negative regulatory news, the cryptocurrency market has remained pretty resilient. The recent SEC warnings failed to deter Bitcoin’s price from staying above $28,000 as the currency managed to prevent a further downward slide after the Fed’s interest rate hike announcement.

Binance’s Spot Trading Suspension: A Brief Impact on Bitcoin

Later on, investors experienced a brief period of anxiety when Binance abruptly halted spot trading due to a “bug on a trailing stop order,” as explained by CEO Changpeng Zhao. Within the first ten minutes of the announcement, Bitcoin briefly dropped below the \(28,000 mark, losing \)150 of its value. The market leader then returned to \(28,100 before slightly losing \)28,000 again, posting a -1.72% drop throughout the day.

Bitcoin’s Liquidity Crisis: Impact of Crypto-friendly Bank Shutdowns

So far, Bitcoin’s value has surged by 15% in one month and approximately 65% since the start of 2023. However, the shutdown of crypto-friendly banks such as Silvergate and Signature this month, which has reduced access to US dollar payment services for market makers, is leading to a deterioration in the liquidity of the US dollar to Bitcoin. According to Conor Ryder, a research analyst at the crypto data platform Kaiko, Bitcoin liquidity hit a 10-month low in March. This suggests that the market may become increasingly volatile in times of low liquidity.

Bitcoin’s Liquidity Crisis: Impact of Crypto-friendly Bank Shutdowns

According to analysts at JPMorgan, fintech payment companies and offshore banks are attempting to fill the void left by the collapse of three crypto-friendly banks in the US, and stablecoin trading volumes have spiked since the Silvergate fallout. This banking crisis could be an opportunity for some exchanges that offer banking services to crypto-native firms and investors, they wrote, while insisting on replacing the banking networks to allow fiat to be poured into the ecosystem easily.

Bitcoin Bull Market: Increasing Short Positions Signal a Potential Correction

Bitcoin can now be in a bull market, according to CryptoQuant’s cycle indicator, with an increasing number of short-term holders in profit. However, as the price rises, whales and miners are depositing their coins to exchanges as well, leading to the highest levels of inflow seen in 2023. The percentage of short positions taken against BTC on Binance increased from 30% to 53.7% over the last few weeks, suggesting that traders are betting on a correction.

Ethereum and Monero: Market Movements Amidst Crypto Incidents

As a result of the market situation, Ethereum (ETH) dipped below the $1,800 mark along with Bitcoin’s drop. Interestingly, today’s biggest winner in the top 25 cryptocurrencies has been Monero (XMR) due to the emerging story of “privacy” during recent crypto incidents.

Arbitrum Airdrop: Stable Prices Despite High Token Circulation

A lot of discussions have sparked around Arbitrum (ARB) since its airdrop yesterday. Some investors, who were waiting for a crash below \(1 to start accumulating, may be disappointed today because the price has remained stable around \)1.4, despite a large sell-off. This came as 78.13% of eligible addresses have already claimed their ARB, meaning 79.04% of the airdropped tokens have been in circulation.

Top altcoin gainers and losers

Gainers:

Arbitrum ARB (+17.20%)

Mask Network MASK (+15.00%)

Mina MINA (+7.46%)

Losers:

Optimism OP (-7.41%)

Conflux CFX (-6.85%)

Render Token RNDR (-5.93%)

NFT Market Map

 

The NFT market is active today, with a majority of collections seeing an uptick in volume. Bored Ape Yacht Club (+49.27%), Otherdeed (+68.58%), and MutantApeYachtClub (+125.68%) climbed to the top in terms of volume traded.

Nakamigos (+178.02%), a brand-new collection, saw its minters spend over 14 ETH on gas fees, surpassing Uniswap V3 at one point today.

Coin360 Daily Digest

 

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

For more daily updates and news, follow us on Twitter.

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.