Last week, in a period dominated by news on the macro front, the Nasdaq Crypto IndexTM (NCITM) fell 1.9%, with bitcoin (BTC) experiencing a 2.4% correction and ether (ETH) falling a modest 0.3%. In line with market predictions, Wednesday’s FOMC meeting brought another 25 bps rate hike, with Chair Powell showing a cautious optimism that could indicate the Fed will pause its rate hikes. The US job market showed growth in April, pointing to a still strong labor market, which could lead to interest rates staying higher for longer.

 

 

US regional banks continue to struggle

 

The Fed’s latest hike came as stress in the US banking system remained, with PacWest shares falling over 50% on Thursday after the bank declared it was exploring a potential sale, increasing fears that the 2023 US banking crisis could still make more victims in the weeks and months ahead. 

 

Bitcoin fees soar amidst BRC-20 frenzy

 

The issuance of BRC-20 tokens (resembling Ethereum’s ERC-20 standard for fungible tokens), made possible by Ordinals and Inscriptions on Bitcoin, has brought huge demand for blockspace on crypto’s most valuable blockchain, pushing its fees to bull market levels. Average on-chain fees soared to $20 over the weekend, from last week’s average of a little over a dollar. This scenario may be a glimpse of the future: high demand for secure settlement with miner revenues no longer relying on subsidies (which halve every four years until the 21 million cap is reached). Late Sunday, fees included into block 788,762 surpassed the current mining subsidy of 6.25 BTC, paying the successful miner close to $360,000 at current prices.

 

Mastercard teaming with Polygon, Solana, and Avalanche on new Crypto Credential standards

 

Mastercard says it is working with blockchain developers Aptos Labs, Ava Labs, Polygon, and The Solana Foundation on a new set of standards dubbed Mastercard Crypto Credential. Raj Dhamodharan, Mastercard head of crypto, stated that "instilling trust in the blockchain ecosystem is a critical step towards realizing its full potential," providing  "a way for trusted, compliant, and verifiable interactions to take place on public blockchain networks." This move reassures the continued interest of traditional companies and institutions in integrating crypto into their services.

 

Coinbase opens offshore crypto derivatives exchange

Coinbase has launched an International Exchange, offering perpetual futures trading for BTC and ETH to institutional users in eligible non-US jurisdictions. The exchange aims to expand Coinbase's global reach and provide an alternative for users outside the US. The move comes amid Coinbase's criticism of the SEC's regulatory enforcement.

 

Biden proposes 30% climate change tax on cryptocurrency mining

 

The White House is advocating for the implementation of a Digital Asset Mining Energy (DAME) tax, which would target the electricity consumption of cryptocurrency mining. The goal of the tax is to address the impact of mining on climate change. However, some critics argue that the industry is being unfairly singled out and that there may be hidden agendas behind this proposal.

 

What to watch this week:

 

All eyes will be on the release of April CPI figures on Wednesday, potentially reassuring the Fed’s cautious optimism in its year-long effort to contain inflation in the US.

 

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