A Summary of Crypto Events for Today

The crypto market continues to be volatile following the June 14 Federal Open Market Committee (FOMC) announcement and press conference with Federal Reserve Chairman Jerome Powell, which revealed that the central bank would not raise rates in June.

Although this action conformed to what investors had predicted, the cryptocurrency market has yet to demonstrate any bullish vigor. Powell furthermore declared that two more rate increases would be required in the future.

The Bitcoin (BTC) price opened the day higher, trading at over $26,000, however it has since decreased to a 24-hour low of $25,791 following the FOMC announcement. Analysts are predicting that a decline to $25,000 is likely in view of the current state of BTC derivatives data.

The lack of a positive reaction to the pause in rate hikes today, as well as the subdued crypto market performance, could be attributed to the recent SEC charges levied against Binance and Coinbase.

“Wow, I’ve seen that!” — Coldie’s Snoop Dogg, Vitalik, and McAfee NFTs

FOMC tanks crypto and some equities

The stock market experienced a sharp decline on June 14 following the FOMC decision, with the Dow Jones plummeting 200 points within minutes of the announcement. In contrast, the S&P 500 Index achieved a 13-month peak.

Whilst Powell chose to suspend increases in interest rates, the Federal Reserve reiterated its commitment to reducing high inflation.

In the policy document, the Federal Reserve declared:

The wording suggests that interest rate increases may be in the offing in the future. Despite this, cryptocurrency prices continue to be highly correlated with the Dow and S&P 500, and most major banks still anticipate a sharp economic downturn in the United States in 2023. Nevertheless, primary stock indexes have still been able to reach yearly highs following the U.S. debt ceiling agreement.

U.S. Bank analysis, utilizing more than 1,000 data points, indicates that investor sentiment is still weak regarding the current economic situation.

Robert Haworth, senior investment strategy director at U.S. Bank, states.

The halting of rate increases is creating instability in stocks and digital currencies.

Crypto sector regulation is still the main threat

Regulation has been a frequent topic in the recent cryptocurrency news. The European Union has launched the Markets in Crypto-Assets law as a digital asset framework, while the United States appears to be aiming for regulation through SEC enforcement.

On the 5th and 6th of June, the SEC brought civil lawsuits that increased the amount of cryptocurrencies the agency believes are securities to sixty-one, equating to a total worth of one hundred billion dollars.

SEC Chair Gary Gensler’s 2019 praise of Algorand (ALGO) as a “great technology” appears to be in contrast to the current enforcement action, which is one of the 61 crypto tokens.

Other crypto tokens that have been specifically identified as securities include Binance USD (BUSD), BNB (BNB), Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS), and COTI.

The latest SEC move contributes to an extensive record of disagreements, misunderstandings and lack of faith concerning the genuine purpose of digital assets. Following the FTX disaster, some believe U.S. legislators are furious with the crypto sector. The most recent conflict focuses on how centralized exchanges (CEXs) can use clients’ funds.

Not all legislators are content with Gensler’s decisions. On June 12th, Ohio Representative Warren Davidson presented the “SEC Stabilization Act” to the House of Representatives. The proposed legislation would remove Gensler from the chairmanship and disperse authority among a committee.

TVL and volume remain low

The assault on CEXs has also caused Bitcoin exchange inflows and outflows to increase. Inflows suggest greater sell-side pressure, while outflows usually involve transferring assets to self-custody.

In spite of the transition to on-chain self-custody, decentralized finance (DeFi) has not seen an increase. Total value locked (TVL) is a standard gauge used to analyze the condition and sentiment of the crypto market. According to DefiLlama, TVL across all protocols decreased 0.5% in the past 24 hours and has decreased by $120 billion since April 5, 2022.

The crypto industry is “destined” to be centered around Bitcoin due to regulators, according to Michael Saylor.

Given the macroeconomic headwinds, the expected rate hikes, and the low trading volume, it is likely that the volatility in cryptocurrency will persist for the foreseeable future.