After briefly breaking above the US$28,000 level on Tuesday night, Bitcoin traded flat on Wednesday morning in Asia. Ether fell below the US$1,900 mark, while other top 10 non-stablecoin cryptocurrencies traded mixed. XRP led the winners following crypto-related legal developments involving the US Securities and Exchange Commission (SEC). Stock futures in the US traded mixed as investors waited to see whether the US debt ceiling agreement passes through Congress. The deal faces opposition from some House Republicans. Meanwhile, concerns about further increases in interest rates and debt issuance in the US are limiting investors’ appetite for risk assets.
Bitcoin fell 0.35% over the past 24 hours to US$27,666 at 10:00 am in Hong Kong, but was trading 1.92% higher on the week, according to CoinMarketCap data. The world’s most prominent cryptocurrency reached an all-time high of US$28,044 in Asia on Tuesday evening. However, it soon dropped back below the USD 28,000 resistance.
Digital asset investment products saw outflows totaling US$39m in the week ending May 26, European cryptocurrency investment firm CoinShares reported on Tuesday. Bitcoin-related products accounted for about a third of those outflows. Six weeks of outflows total US$272 million – a sign that bearish sentiment is weighing heavily on the crypto market.
Ether fell 0.13% to US$1,895, but gained 2.66% over the past seven days. The token has been trading around the US$1,900 resistance level since the beginning of the week.
With the exception of XRP, Solana, and Litecoin, most of the other top 10 non-stable coin cryptocurrencies traded flat to lower in the last 24 hours.
XRP led the winners, jumping 6.15% to US$0.5209 in the last 24 hours. That rise pushed its weekly gain to 12.75%.
Marcus Thielen, head of crypto research at digital asset services platform Matrixport, suggested in a note that the token’s surge could be linked to the settlement announced Monday between the SEC and the former manager of cryptocurrency exchange Coinbase. The former Coinbase employee agreed to SEC allegations that he engaged in insider trading.
Thielen suggests that this solution could benefit Ripple – the issuer of XRP – in its legal dispute with the SEC, which could benefit XRP.
Elsewhere, Dogecoin led the losers. Memecoin fell 1.03% to US$0.07242, down 0.06% for the week.
The total market cap of cryptocurrencies increased by 0.32% to US$1.16 trillion over the last 24 hours, while the 24-hour market volume increased by 2.02% to US$30.06 billion.
Indices are proxy measures of global NFT market performance. These are managed by CryptoSlam, a subsidiary of Forkast.News under Forkast.Labs.
In the non-fungible token (NFT) market, the Forkcast 500 NFT Index in Hong Kong fell 0.22% to 3,403.49 in the 24 hours to 10:50am, but was up 0.32% for the week.
NFT sales on Ethereum increased by 22.00% in the last 24 hours to US$18.23 million. According to CryptoSlam data, this increase was caused by Bored Ape Yacht Club (BAYC) transactions. Meanwhile, NFT sales on Bitcoin fell by 18.77% to US$3.52 million.
BAYC sales totaled US$2.86 million on Tuesday, almost three times more than the entire Monday.
“The increase in BYC volume is interesting because the price of some of the larger transactions is not matching the characteristics/rarity,” said Eric Dettman, NFT advisor at CryptoSlam. “They are not washed up on paper but there may be some transactions going on behind the scenes.”
The BRC-721E token standard was launched on Monday. The initiative allows traders to transfer their Ethereum-based NFTs to the Bitcoin network. This process is irreversible as it permanently burns the NFT on the Ethereum network before transfer.
“We will now be able to see in real-time the conviction traders have on the Bitcoin ecosystem,” said Yehuda Petscher, NFT strategist at Forecast Labs. “At this point, no one can deny that Bitcoin NFTs are here to stay, but the question is, ‘Will Bitcoin NFTs overturn Ethereum NFTs?’ That’s another story. I think they will.”
NFT trader sentiment is also being boosted by Web3 growth in China and Russia.
On May 23, China’s national broadcaster CCTV reported on Hong Kong’s recent crypto regulation campaign. This unexpected move was taken before the release of the Web 3.0 white paper by Beijing’s municipal government. The wide-reaching paper covers areas including NFTs and the metaverse.
“China is getting into NFTs and crypto, and Russia will use crypto to settle payments across borders,” Petscher said. “These two major announcements are bringing excitement back into the NFT and crypto markets and leading many to believe that they single-handedly can change the market.”
As of 12:00 noon in Hong Kong, US stock futures fell, Dow Jones Industrial Average futures fell 0.34%, S&P 500 futures fell 0.25%, and Nasdaq futures fell 0.15%.
Investors are worried ahead of the US Congress’ vote on a debt ceiling agreement to avoid default in the world’s largest economy. The House vote is scheduled for Wednesday and could face objections, according to the Associated Press.
An additional concern for investors is the Federal Reserve’s interest rate policy. Federal Reserve Bank of Cleveland President Loretta Mester told the Financial Times there was no “compelling reason” to pause a rate hike in June, citing “underlying, stubborn inflation pressures,” according to a report on Wednesday.
The Federal Reserve meets on June 14 to decide on rates, which are now between 5 and 5.25%, the highest since 2006. The CME FedWatch tool predicts a 37.0% chance the Fed will keep rates unchanged in June, and a 63.0% chance of another 25 basis-point rate hike, up from 59.6% on Tuesday.
The US employment report will be released on Friday, which will provide another insight into the state of the economy and inflation pressures.
Tom Zuo is part of the Forkast.News editorial team.
Will Fee is an editor and Asia correspondent based in central Tokyo. He holds a Master of Philosophy in Japanese Studies from the University of Oxford, where he specialized in post-war politics, culture and society. He previously covered domestic politics for The Japan Times and is interested in exploring the political implications of the regulatory pivot towards crypto and Web3 in East Asia.
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