Crypto Morning: Bitcoin (BTC) and Ethereum (ETH) Gain Strength After U.S. Rate Rises

Charlie Taylor


Risk appetite appears to be back and boosts the cryptocurrency market this Thursday (5). Bitcoin (BTC) is up 1.6% in the last 24 hours to $39,548.81, data from CoinGecko shows. Ethereum (ETH) is up 3.3% at $2,930.37. In Brazil, Bitcoin has a slight increase of 0.6%, trading at R$ 195,015.99, according to the Bitcoin Portal Index (IPB). Investors were relieved after the monetary policy decision of the Federal Reserve (Fed), the US Central Bank, which raised interest rates by 0.5 percentage point. The point that most caught the attention of investors is that the Fed ruled out increases above that level. Fed Chair Jerome Powell said a 0.75 percentage point hike “is not something the committee is actively considering,” which encouraged the market. The S&P 500 ended Wednesday with a 3% gain, the biggest advance since 2020, according to Bloomberg data.

Relief

“The Fed’s statement and the interview with the institution’s president brought relief to the market,” said Bruno Milanello, Bitcoin Market New Business executive, in an analysis by Valor Investe. “There is a tendency for riskier assets like tech stocks and cryptocurrencies to rally in the short term, but data like inflation or the Russia/Ukraine war or the pandemic could disrupt what has been charted.” Nancy Davis, chief investment officer at Quadratic Capital Management, warns of the risk of stagflation in the United States. “The market is overly optimistic about the Fed’s ability to control inflation,” she said in a report cited by Bloomberg. Major altcoins also trade gains on Thursday, but they slow down as Binance Coin (2.5%), XRP (+3.1%), Solana (+5.6%), Cardano (+8.5%) %), Avalanche (+8.9%), Dogecoin (+2.1%), Polkadot (+5%), and Shiba Inu (+2.6%), according to data from CoinGecko. Earth goes against the grain, down 1.4%. ‘Looks fungible’ ApeCoin is up 9.4% in the last 14 hours. The token even climbed 20% on Wednesday after Elon Musk posted a screenshot of the Bored Apes on his Twitter profile with the tease: “Looks fungible.” Something fungible is an item that can be directly exchanged for another. A work of art, on the other hand, is “non-fungible”, with a subjective value and, from the point of view of the market, cannot be exchanged at random. This is the case for non-fungible tokens (NFTs) from the BAYC collection. Hours after shaking up the NFT market, the future owner of Twitter was invited by the UK Parliament to speak about disinformation, user protection and freedom of expression on social media. Bitcoin loses investors Liquidations on Bitcoin investment products totaled $133 million in the week ending April 29, the highest volume of outflows since June 2021, according to a report by CoinShares. The analysis does not point to a specific reason, but indicates that the Federal Reserve’s monetary tightening rhetoric and the recent devaluation of BTC would be the causes for the stampede. In total, digital asset investment products recorded outflows of $120 million in the period. The positive highlight was the FTX token, which received entries of US$ 38 million, the highest value among all the cryptoassets tracked. Other highlights Two young people from the crypto world launched a hedge fund in the US with a focus on the “long only” strategy (only in long positions, or betting on the rise) after raising US$ 85 million in a round that featured heavyweights such as Bain Capital and ParaFi, according to Bloomberg. Ryan Watkins, 25, a former analyst at Messari, and Daniel Cheung, 26, who worked at Jennison Associates, founded Pangea Fund Management to bet on three to seven established tokens. The Digital Marathon posted a loss of $13 million in the first quarter due to losses related to the devaluation of its mined Bitcoins, even as quarterly sales jumped from $9.2 million to $51.7 million. The miner announced on a conference call that it may start selling Bitcoins from its balance sheet, albeit not in the short term, CoinDesk reported. THE 99 Pay made available to users the possibility of transacting Bitcoins through the digital wallet integrated with the conventional racing software of 99. The 99Pay application, launched in October 2021, recorded more than 268 thousand transactions in Bitcoins in the first four months, moving almost R$ 50 million. in the luxury marketGucci is preparing to accept cryptocurrency payments at select U.S. stores from the end of the month, with plans to extend the pilot to all directly operated units in North America by mid-year, according to Vogue Business. Regulation, Cybersecurity and CBDCs Binance announced on Wednesday (4) that it had received approval from the French government to operate in the country. According to a statement from the broker, the Autoridade dos Mercados Financeiros (AMF – Autorité des marchés financiers) granted a digital asset service provider license to the cryptocurrency exchange, which also received the green light from the Autoridade de Controle e Referência Prudential, an independent agency that monitors Financial Institution. The co-founder and former CEO of BitMEX, Arthur Hayes, who pleaded guilty to a lawsuit for failing to monitor criminal activity on the cryptocurrency exchange, asked authorities to serve the sentence out of jail and allowed to travel freely. Hayes’ mother reinforced the appeal in a letter sent to the judge, according to Bloomberg. In CaliforniaGovernor Gavin Newsom signed an executive order to direct several state agencies to examine cryptocurrencies and blockchain technologies and recommend ways to incorporate them into the administration of the most populous US state. in Uzbekistan, the government will allow companies to mine cryptocurrencies using solar energy, as per Reuters. Decree published this week exempts all crypto operations of domestic and foreign companies from income tax, as well as creating a regulatory agency and banning the issuance and trading of anonymous assets through mining. The International Monetary Fund said that the Central African Republic’s adoption of Bitcoin brings major legal, transparency and economic policy challenges. “The IMF team is assisting Central African Republic and regional authorities to address the issues posed by the new law,” the Fund said in an email to Bloomberg. Metaverse, Games and NFTs Yuga Labscreator of Bored Apes, refunded transaction fees to investors who were unable to mint Otherdeed NFTs on Saturday, according to an announcement in twitter. The Otherdeeds function as scriptures for the virtual terrains of the Otherside metaverse. The rise in so-called gas fees is a matter of debate in the crypto market, with Solana and Ethereum signaling changes to avoid crashes and facilitate transactions. Starbucks plans to launch a series of collections of non-fungible tokens, according to the company’s blog post. The coffee shop chain also mentions the “Starbucks Digital Community Web3” platform, possibly linked to in-store mobile payments, CoinDesk points out. Two weeks after launching to a select group of waitlists, Coinbase has opened the beta version of its NFTs marketplace to all users, according to tweet of the cryptocurrency exchange. In its debut week, only 900 transactions were recorded with an approximate volume of 73 ETH ($210,000), data from CoinDesk shows. The goal, owner of Facebook, Instagram and WhatsApp, is expected to slow down hiring in 2022 due to the inflationary scenario and low growth, according to documents seen by the Business Insider website. The information was confirmed to CNBC.

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