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On Friday, Bitcoin’s price (COIN:BTCUSD) experienced a strong recovery, surpassing US$ 67,000 after a brief drop below US$ 65,000 the previous day. Bitcoin’s price was currently around US$ 67,160, with a 3% increase over 24 hours. The recovery was fueled by several positive entries in Bitcoin ETFs, which recorded additions for four consecutive days. Significant institutional contributions were also observed; notably, Morgan Stanley revealed a significant investment of US$ 269.9 million in the Grayscale Bitcoin Trust (AMEX:GBTC). Additionally, the expectation of crucial regulatory developments in the US next week and the optimistic prospects for the approval of an Ethereum ETF by Coinbase also contributed to the momentum.
The US House of Representatives is preparing to vote on the FIT21 bill, a significant step towards official cryptocurrency regulation. This bill will designate the Commodity Futures Trading Commission (CFTC) as the primary regulator of digital assets, establishing clear guidelines in collaboration with the Securities and Exchange Commission (SEC). In addition to consumer protections, the law proposes barriers against risky practices, aiming to accelerate blockchain technology advancement, promote financial inclusion, and reinforce national security. The vote is scheduled for next week.
The cryptocurrency market is on the brink of a significant liquidation, with US$ 2.1 billion in Bitcoin and Ethereum options set to expire. About 18,183 Bitcoin option contracts with a nominal value of US$ 1,184 million will expire this Friday, similar to last week’s volume. Additionally, 321,925 Ethereum contracts are also scheduled to expire today, with a nominal value exceeding US$ 940 million.
David Han, an analyst at Coinbase Global (NASDAQ:COIN), suggests that the market might be underestimating the probability of approving spot Ethereum ETFs, despite the generally pessimistic view. Han highlights that there are no significant oversupplies on the supply side that could pressure Ether’s price. With crucial SEC decisions expected on May 23 and 24 regarding the applications from VanEck and ArkInvest/21 Shares, the scenario is uncertain. Although approval seems distant, Coinbase maintains a “when, not if” outlook based on previous Bitcoin ETF approvals. Han also points out crucial differences between Ethereum and Bitcoin, especially the proof of stake mechanism, as factors that might influence the decision.
On May 16, US Bitcoin ETFs received a notable entry of US$ 257.3 million. The three biggest highlights were BlackRock’s ETFs (NASDAQ:IBIT), with a daily entry of US$ 93.7 million, Fidelity’s ETF (AMEX:FBTC) which added US$ 67.1 million, and ARK 21Shares (AMEX:ARKB), with entries of US$ 62.0 million. Conversely, in Hong Kong, the three listed BTC ETFs experienced outflows of US$ 13.2 million on May 16, marking one of the largest withdrawal days for digital asset ETFs in the region.
The Depository Trust & Clearing Corporation (DTCC) revealed positive results from its Smart NAV pilot, which utilized distributed ledger technology to improve data dissemination in mutual fund services. Chainlink’s technology was crucial for enabling interoperability and data transmission between blockchains, highlighting the potential for its expansion in broader financial processes. This advance boosted the price of Chainlink (COIN:LINKUSD), which reached a high of US$ 16.77, quoted at US$ 16.06 at the time of writing. The token has risen by 13.22% over the past 7 days.
Solana established a new standard for speed in significant blockchains, achieving a record of 1,504 transactions per second (TPS) on April 6, driven by the popularity of memecoins. This puts Solana 46 times ahead of Ethereum and more than 5 times above Polygon, Ethereum’s leading scaling solution. Despite this leadership, Solana operated at only 1.6% of its theoretical maximum capacity of 65,000 TPS. With increasing transaction volumes, the network faced congestion, raising questions about how future updates might improve its actual processing capacity.
As of May 14, LocalMonero, a peer-to-peer exchange platform for the privacy-focused cryptocurrency Monero, ceased all trading and plans to fully shut down in six months, announced AgoraDesk, the parent company. The decision to close after nearly seven years was attributed to a combination of internal and external factors. LocalMonero faced increasing challenges, particularly due to regulatory pressure on privacy coins.
The Bank of America (NYSE:BAC) upgraded its rating on Coinbase Global from “Underperform” to “Neutral” and raised the target price from $110 to $217. The move boosted Coinbase shares by 4.7% during Friday’s trading. The improved rating reflected a favorable macroeconomic environment benefiting the cryptocurrency market and trading volumes, according to analysts led by Mark McLaughlin. They also cited strict expense management and greater diversification at Coinbase as factors that could boost the company’s profits, despite regulatory risks and reliance on transaction revenues.
In Abuja, Justice Emeka Nwite of the Supreme Court refused to grant bail to Tigran Gambaryan, a Binance executive, citing flight risk. Gambaryan, who is facing charges of money laundering and tax evasion, has been detained since his arrival in the country in February for discussions about the company’s operations.
Binance, in collaboration with the Investigation Bureau of Taiwan’s Ministry of Justice and the Taipei District Prosecutors Office, tackled a money laundering scheme involving 200 million New Taiwan dollars, equivalent to $6.2 million. The operation dismantled a digital asset fraud, where criminals used false documents and IDs to illegally move large sums through cryptocurrencies. The initiative helped prevent evasion of authorities and highlighted transnational cooperation in financial investigations.
The Autorité des Marchés Financiers (AMF) of France issued a warning on May 16, advising cryptocurrency investors that Bybit does not have the necessary registration to operate in the country. The regulator highlighted that Bybit, the third-largest exchange by trading volume, has not met local requirements to register as a digital asset service provider. The AMF had already blacklisted Bybit since May 2022 and now considers taking legal actions that may include blocking access to the platform in France. The AMF advises investors to protect their assets in light of the potential service disruption.
The decentralized stablecoin sUSD, from Synthetix, deviated from its $1 reference value on Friday due to a spike in sales on decentralized exchanges. The sUSD, which aims to maintain parity with the dollar through an over-collateralized system of crypto assets, dropped to $0.92, later recovering to $0.96. The instability followed the withdrawal of a major liquidity provider on the Curve exchange, who sold significant amounts of sUSD, directly impacting its market value.
The People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) launched a pilot test that enables the use of the Digital Yuan (e-CNY) for cross-border payments. Announced on May 17, the program aims to facilitate safer and more innovative transactions between Hong Kong and mainland China. Users in Hong Kong can top up their digital wallets in yuan through 17 local banks, connecting to the Fast Payment System (FPS) without needing a mainland bank account.
Dolce & Gabbana USA is being sued for failures in the delivery of its non-fungible tokens (NFTs). According to Bloomberg, Luke Brown, who spent $6,000 on NFTs and lost $5,800, initiated the lawsuit in the Southern District of New York. He claims that the promised NFTs, including digital clothes for use in the metaverse, were delivered with significant delays and with usage restrictions on a less popular platform.
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