A challenging week for the industry, with several SEC enforcements coinciding with negative market impulses, leading BTC to fall 5%. Apart from concentrated headline-driven price reactions, BTC traded flat throughout most of the week.
Kraken’s $30m settlement with the SEC and ceased offering of staking as a service for U.S customers caused a broad negative market reaction. The SEC’s Wells Notice to Paxos related to BUSD, on the other hand, saw a more muted reaction in BTC compared to altcoins, with BNB taking the hardest blow leading to a weekly return of -10%.
Bitcoin is showing signs of reentering a slumber. BTC’s volumes apart from Binance remain shallow, and we note reduced institutional participation in the market, as CME’s OI has fallen a further 11% this week. Through longer lenses, BTC is trading in the center of the trading range established after 3AC’s collapse, before FTX’s collapse.
As usual, BTC experienced spiking volatility amidst today’s CPI release. The MoM growth in inflation came in as forecasted at 0.5%. BTC immediately plunged by 1.5% on the release and quickly recovered before tumbling lower. The macro calendar is relatively quiet onwards, which could further nourish BTC’s predominantly flat trading environment, with a slight downward drift of late.
We explore the implications of SEC's staking and stablecoin enforcements this week's edition of "Ahead of the Curve".