Analytical material on cryptocurrencies 19.05.2023
News block
1. CFTC Chairman: BTC and ETH are commodities
The chairman of the US Commodity Futures Trading Commission (CFTC), Rostin Behnam, once again stated that, in the opinion of his department, BTC and ETH are commodities, not securities.
In addition, Behnam criticized the SEC's approach led by Gary Gensler to cryptocurrency regulation and compared crypto innovations with other "landmark moments in the market structure", such as "the transition from trading on the stock exchange to electronic trading 20 years ago."
The CFTC's position significantly reduces the risk that ETH may be recognized as a security in the future.
2. A number of US states oppose CBDC
Recently, Florida Governor Ron DeSantis signed a law banning central bank digital currencies (CBDC) in his state. Now other states are following in his footsteps.
Currently, Louisiana, Alabama, Texas and North Dakota are working on bills against the digital dollar.
The Federal Reserve has been talking about CBDC for some time, but has not given any details about when the digital dollar will be launched.
Currently, dozens of countries are working on launching pilot projects on CBDC.
3. Ripple Launches CBDC Issuance Platform for Central Banks
Ripple has developed a CBDC launch platform that allows Central banks, governments and financial institutions to issue their own digital currency.
Using the Ripple platform, government agencies can manage and configure the entire CBDC lifecycle, including the issuance, distribution, redemption and burning of tokens. Financial institutions will also be able to manage and participate in interdepartmental settlement and distribution functions using CBDC.
It provides for the release of both wholesale and retail CBDCs, which can also make offline transactions.
A number of positive news on Ripple has led to XRP becoming the best-selling cryptocurrency on several South Korean exchanges, surpassing BTC. Thus, the XRP/KRW trading pair on the Bithumb exchange accounted for 26% ($37.6 million) of the total trading volume over the past day.
Overview of the crypto market
Bitcoin and ether are in the red for the last day. Macroeconomic uncertainty continues to worry traders.
Futures show a 40 percent probability of the Fed raising the rate by 25 basis points in June 2023. While last week such a probability was estimated at only 5%. The reason for this change is as many as 14 speeches by speakers from the Fed in 7 days, who again changed their rhetoric to hawkish. Also, futures give only a 4% probability of a rate cut starting in July, and a 26% probability of a decline in September.
Trading volumes on DEXs this month have already reached $700 million. Considering that only the first 2 weeks of May are behind, the market has a chance to surpass the April figures:
🔸 The current capitalization of the crypto market is 1.17 trillion (-0.84%)
🔸 Trading volume for the last day is $36.7 billion (-4.9%)
🔸 BTC dominance 44.5% (-0.36%)
🔸 Fear and Greed Index:
- today 48, yesterday 51, a week ago 48
where, 0 is extreme fear (may be a sign that investors are too scared - it's often a good time to buy), and 100 is extreme greed (the market needs correction).
🔸 Leaders of growth and decline. In the TOP 100 cryptocurrencies for the last day:
- the largest growth is shown by: HEX (+19.3%), BGB (+4.4%), INJ (+3.6%), RNDR (+3.5%), XRP (+3.0%)
- the strongest drop is: LDO (-6.1%), OP (-4.8%), IMX (-4.7%), SUI (-4.3%), AXS (-3.9%).
Bitcoin
The volatility of the first cryptocurrency reaches historically significant lows. So the 60-day annual volatility has fallen below 40% for the eighth time in the last 5 years:
As a rule, a period of low volatility is followed by a strong movement of the BTC price (there may be both an increase and a fall).
At the same time, the analytical agency Santiment notes that with the return of the BTC price to the $26k area, traders are showing increased concern about the fall in prices back to the $20k - $25k range. BTC's social dominance has jumped high again, which is usually a sign of fear. And fear signals increase the likelihood of a rebound:
Optimism for the BTC price in the medium/long term is added by the fact that the hashrate of the first cryptocurrency network continues to grow actively. Even the bearish year of 2022 did not prevent this:
Hashrate is an indicator that measures the total amount of computing power that miners have connected to the bitcoin blockchain. And such growth is observed taking into account the fact that in less than a year (in April 2024) halving will occur, which will reduce the reward of miners for a block by 2 times (from 6.25 BTC to 3.125 BTC).
It seems that industrial miners who invest hundreds of millions of dollars in equipment believe in a significant increase in the price of the first cryptocurrency in the future.
