Ripple Cross Appeals and BTC-Spot ETF Market Registers Inflows – This Week in Crypto

US Economic Indicators Bolster Fed Rate Cut Expectations

Crucial US economic indicators supported expectations for a 25-basis point November Fed rate cut. Additionally, the data continued signaling a soft landing, leaving a 50-basis point Fed rate cut off the table. Key stats included:

• Annual inflation rate fell from 2.5% in August to 2.4% in September, while core inflation rose from 3.2% to 3.3%.
• Initial jobless claims jumped from 225k (week ending September 28) to 258k (week ending October 5). Economists attributed the spike to the hurricane season.
• Producer prices increased by 1.8% year-on-year in September, softer than a 1.9% rise in August.
• The Michigan Consumer Sentiment Index slipped from 70.1 in September to 68.9 in October.

According to the CME FedWatch Tool, the chances of a 25-basis point November Fed rate cut declined slightly from 97.4% to 89.5% in the week ending October 11. The probability of a 50-basis point Fed rate cut remained at zero.

Notably, the Nasdaq Composite Index ended the week up 1.13%, while the total crypto market cap was down 0.40%. The SEC’s continued targeting of the US digital asset space contributed to the weekly decline.

XRP Cross-Appeals the Final Judgment in Response to SEC Appeal Notice

On October 10, Ripple filed a cross-appeal, challenging Judge Analisa Torres’s final judgment in the SEC vs. Ripple case.

In the final court ruling, Judge Torres ordered Ripple to pay a $125 million civil penalty for breaching section 5 of the US Securities Act. However, Judge Torres denied the SEC’s requests for a punitive disgorgement and prohibiting XRP sales to institutional investors.

Ripple’s cross-appeal came after the SEC filed its Notice of Appeal on October 2. The court docket revealed the SEC is targeting the Summary Judgment (July 2023) and the final Judgment (August 2024). The listing of the Summary Judgment was significant, with the agency challenging the Programmatic Sales of XRP ruling.

Investors reacted positively to Ripple’s cross-appeal, with XRP advancing by 1.24% on Thursday and extending its gains on Friday.

From Monday, October 7, to Saturday, October 12, XRP was up 0.41% to $0.5357.

US BTC-Spot ETF Market Boosts BTC Demand

The US BTC-spot ETF market reported net inflows for the week ending October 11. Inflows from Friday ended a three-day outflow streak. The inflows contributed to a Friday BTC breakout, driving BTC up 3.54% to close the session at $62,447.

According to Farside Investors, the US BTC-spot ETF market saw net inflows of $348.5 million, recovering from $274.3 million in outflows the previous week. Among key issuers:

• iShares Bitcoin Trust (IBIT) had net inflows of $140.6 million. (Previous week: +$135.3 million).
• Fidelity Wise Origin Bitcoin Fund (FBTC) saw net inflows of $138.2 million. (PW: -$138.9 million).
• Bitwise Bitcoin ETF (BITB) reported inflows of $35.7 million. (PW: -$36.0 million).
• ARK 21Shares Bitcoin ETF (ARKB) had net inflows of $35.4 million (PW: -206.8 million).

Six of the eleven issuers registered net inflows, supporting a BTC recovery from sub-$60,000 levels.

Monday, October 7, through Saturday, October 12, BTC was down by 0.60% to $62,437. BTC, after recovering from a Thursday low of $58,926.

SEC Sues Cumberland DRW for Breaching US Securities Laws

On October 10, the SEC charged Cumberland DRW with operating as an unregistered crypto exchange. According to the SEC’s press release,

“According to the SEC’s complaint, since at least March 2018 through the present, Cumberland has acted as an unregistered dealer by buying and selling crypto assets offered and sold as securities for its own accounts as part of its regular business.”

Acting Chief of the SEC’s Crypto Assets and Cyber Unit (CACU) stated,

“The federal securities laws require all dealers in all securities to register with the Commission, and those who operate in the crypto asset markets are no exception.”

The SEC is seeking civil penalties, disgorgement, prejudgment interest, and permanent injunction relief.

US Government Receives Green Light to Sell 69k BTC

On October 8, news surfaced that the US government received approval to sell 69k BTC. In 2022, the courts ordered Battleborn Investments to forfeit crypto holdings. The case related to the Silk Road seizure. However, this week, the US Court of Appeals ruled it will not hear an appeal against the forfeiture.

The prospect of a sizeable BTC sale impacted sentiment, driving BTC to a weekly low of $58,927. According to Arkham Intelligence, the US government has a 203,239k BTC stockpile, equivalent to $12.73 billion.