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Hi everyone! Here’s what moved in crypto markets today:
White House calls on Congress to “step up its efforts” on crypto regulation.
Bitcoin gained 0.4% to trade at $23,100. Ether was trading up 0.2% to $1,600.
Equities closed up after Friday’s PCE report.
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Equities closed up as traders processed the latest Personal Consumption Expenditures (PCE) report, which showed a slowdown in inflation at the end of last year. The tech-heavy Nasdaq Composite rose 0.95%, while the S&P 500 and the Dow Jones Industrial Average (DJIA) were up 0.25% and 0.08%, respectively.
The officials – Brian Deese, director of the National Economic Council; Arati Prabhakar, director of the White House Office of Science and Technology Policy; Cecilia Rouse, chair of the Council of Economic Advisors; and National Security Advisor Jake Sullivan – wrote that Congress “should expand regulators’ powers to prevent misuses of customers’ assets … and to mitigate conflicts of interest.”
Other suggestions for Congress in the statement included strengthening transparency and disclosure requirements for crypto companies, strengthening penalties for violations of illicit-finance rules and working more closely with international law enforcement partners.
The officials also made suggestions about what Congress should not do in terms of crafting new crypto regulation, including “greenlight[ing] mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets.”
To do so, the officials warned, “would be a grave mistake” that “deepens ties between cryptocurrencies and the broader financial system.”
Token Roundup
Ether (ETH): ETH was up 0.2% to recently trade at $1,600.
Polygon (MATIC): The MATIC token recently rose 8% to $1.1 Friday. Its price has been up 55% since Dec. 31 amid a spike in daily transactions.
Vela Exchange (DXP): The utility token of the Arbitrum-based decentralized trading platform recently gained some 50% Friday as the project prepares to release its much-anticipated beta version next week. DXP had settled back to a 26% advance, trading around $2.20 as of publication time, according to data from CoinGecko.
Market Analysis: FOMC’s Next Rate Hike
Markets next week will be eyeing the Federal Open Market Committee (FOMC) interest rate decision, largely expected to be a 25 basis point (bps) increase
BTC’s correlation with the S&P 500 has waned slightly over the last week, declining to 0.69 from 0.89 on Jan 11. Its correlation with the tech-heavy Nasdaq Composite remains elevated at 0.89, underscoring the “bitcoin trades like a high-beta tech stock” narrative.
Meanwhile, bullish investors should be wary about the stablecoin supply ratio (SSR).
The SSR measures the ratio between the supplies of bitcoin and stablecoins. As stablecoins represent buying power, a reduction in the SSR implies that investors are sending stablecoins to exchanges, likely for the purpose of buying bitcoin.
Since Jan. 11, the SSR has increased 32%. So while BTC’s price has risen, investors do not appear to be sending stablecoins to exchanges en masse to add to long positions.
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
