Five Things to Know in Crypto This Week: BTC Down, SEC Sues, and Powell Donates

Fed Rate Path Uncertainty Hits Bitcoin and Broader Crypto Market

Bitcoin (BTC) was down 4.52% to $60,307 from Monday, June 24, to Friday, June 28.

Moreover, BTC dropped to a Monday, June 24, low of $58,475 before retaking the $60,000 handle.

Investor uncertainty about the Fed rate path impacted buyer demand for BTC and the broader crypto market.

The US CB Consumer Confidence Index fell from 101.3 to 100.4. Labor market conditions continued to drive consumer confidence. Significantly, the Index dropped below 100 in April 2024 and below 90 in January 2021, when the US unemployment rate was 6.3%.

Conference Board Chief Economist Dana Peterson attributed resilient consumer confidence to the tight labor market conditions.

On Friday, June 28, the heavily anticipated US Personal Income and Outlays Report failed to boost the chances of a September Fed rate cut.

The US Core PCE Price Index advanced 2.6% year-on-year in May after an increase of 2.8% in April. Month-on-month, the Index rose by 0.1%. While softer, personal income and spending trended higher, suggesting a sticky inflation road ahead.

FX Empire author and member of the senior editor team James Hyerczyk highlighted the ongoing uncertainty about a Fed rate cut, stating,

“These figures reflect an economy that is growing steadily while grappling with inflationary pressures, presenting ongoing challenges for policymakers and consumers alike.”

According to the CME FedWatch Tool, the probability of the Fed holding the Fed Funds Rate unchanged in September increased from 34.1% to 37.7% in the week ending June 28.

While BTC looks set for another weekly loss, the Nasdaq Composite Index ended the week up 0.24%.

US BTC-Spot ETFs See Three-Week Outflow Streak Amid Market Volatility

The US BTC-spot ETF market influenced BTC price trends throughout the week. Shifting investor expectations of a September Fed rate cut dented hopes of a surge in demand for BTC-spot ETFs.

Nevertheless, the BTC-spot ETF market ended a seven-day net outflow streak, though inflows were lackluster. Despite three successive days of net inflows, the US BTC-spot ETF market saw total net outflows of $37.3 million in the week ending June 28. The US BTC-spot ETF market extended its outflow streak to three weeks.

According to Farside Investors,

• Grayscale Bitcoin Trust (GBTC) had total net outflows of $155 million in the week ending June 28. (Previous week: $152.6 million).
• iShares Bitcoin Trust (IBIT) saw net inflows of $82.4 million after inflows of $1.5 million in the previous week.
• Fidelity Wise Origin Bitcoin Fund (FBTC) reported total net inflows of $13.9 million. FBTC saw total net outflows of $271.0 million in the previous week.
• ARK 21Shares Bitcoin ETF (ARKB) reported total net inflows of $26.3 million.

The third week of outflows left the BTC-spot ETF market with total net inflows of $666.5 million in June, down from $2,095.5 million of inflows in May.

US BTC-spot ETF market flow trends influenced BTC price trends. BTC was down 10.63% in June after gaining 11.28% in May.

MicroStrategy Chairman Michael Saylor Remains Bullish

MicroStrategy (MSTR) founder and Chairman Michael Saylor remained bullish about BTC despite the current reversal, saying,

“AI is going to create enormous amounts of wealth and bitcoin is going to protect that wealth.”

The crypto community had a similar view. On Monday, Saylor held a poll asking,

How fast do you expect BTC to appreciate annually in USD over the next ten years?

48.9% of 35,933 voters expected BTC to have 40%+ annual returns over the next ten years.

While BTC faced a third weekly loss, ethereum (ETH) was heading for a five-week losing streak.

ETH-Spot ETF Issuers Await Final Approval

Uncertainty about the launch date of the US ETH-spot ETF market affected buyer demand for ETH.

On Tuesday, June 25, SEC Chair Gary Gensler said the approval process for the ETH-spot ETFs was going smoothly. However, the SEC Chair did not provide an approval date, leaving the crypto community to speculate about a likely launch date.

Bloomberg Intelligence Senior ETF Analyst Eric Balchunas responded to a question about the likely launch date on X (formerly Twitter), posting,

“Unfort think we gonna have to push back our over/under till after holiday. Sounds like SEC took extra time to get back to ppl this wk (altho again very light tweaks) and from what I hear next wk is dead bc holiday = July 8th the process resumes and soon after that they’ll launch.”

The Bloomberg Intelligence ETF team previously estimated a July 2 approval data.

One crypto community member summed up the likely flow trends in the event of a pre-July 4-holiday approval, posting,

“A July 2nd approval would almost feel like an intentional kick in the shins to the ETH ETF category. The second lowest market volume week of the year, coupled with expected Grayscale ETHE outflows; would make for some potential net outflows headlines in week 1.”

ETH was down 1.23% to $3,379 from Monday to Friday and 10.14% in June. In November 2023, ETH struck an ETH-spot ETF market-hyped high of $4,870.

Can the crypto community drive change on Capitol Hill?

Crypto Politics: Donald Trump Gains Support Amid Regulatory Battles

On Friday, June 28, Kraken co-founder and chairman Jesse Powell announced a personal donation to the Donald Trump campaign fund. Powell donated $1 million, mostly in ETH, saying,

“For too long, the crypto industry has been under attack by Elizabeth Warren, Gary Gensler and others. Despite overwhelming bipartisan Congressional efforts to put clear rules in place, the Biden White House has stood by and allowed a campaign of unchecked regulation by enforcement. This approach is diminishing US competitiveness as other major economies around the world advance clear rules to regulate digital assets.”

Powell added,

“I am excited to join other leaders from our community to unite behind the only pro-crypto major party candidate in the 2024 Presidential election so the United States can continue to remain a leader in blockchain technology.”

Earlier in the week, super PAC Fairshake made the crypto news headlines for targeting crypto candidates in the Democratic primaries. Fairshake was behind a $2 million ad campaign opposing crypto critic Jamaal Bowman, who lost his seat to Westchester County Executive George Latimer.

In other news, the SEC targeted another crypto player as investors awaited pivotal court rulings in the SEC vs. Coinbase (COIN) and Ripple cases.

SEC Targets Consensys, Adding to Crypto Market Regulatory Challenges

On Friday, the SEC announced charges against Consensys for unregistered offers and sales of securities through its MetaMask Staking Service.

Consensys shared the news on X, posting,

“Consensys fully expected the SEC to follow through on its threat to claim our MetaMask software interface must register as a securities broker. The SEC has been pursuing an anti-crypto agenda led by ad hoc enforcement action.”

Consensys added,

“This is just the latest example of its regulatory overreach – a transparent attempt to redefine well-established legal standards and expand the SEC’s jurisdiction via lawsuit. We are confident in our position that the SEC has not been granted authority to regulate software interfaces like MetaMask.”