Crypto markets sustained most of their March gains, with Bitcoin (BTC) ending the week close to US$28,000 and Ether (ETH) nearing US$1,800. The biggest event of the week was Wednesday’s much-anticipated FOMC meeting and the announcement of a 25 bps hike, the ninth upward move since the current tightening cycle began. Chair Powell followed the announcement with a hawkish speech, highlighting that further hikes could be expected to contain inflation, which is still well above target.
Deutsche Bank shares plunge, default insurance at highest since 2018
Comment: On Thursday, Deutsche Bank raised concerns after its stock fell by over 10% and its CDS, a form of insurance for bondholders, had its largest one-day gain on record. The banking crisis we had extensively commented on last week could be far from over as new banks take over the headlines and worry investors. Although central banks have already announced tools to contain a potential spread of the banking crisis, investors will keep an eye out for possible new casualties.
White House report blasts digital assets, SEC sends Wells notice to Coinbase
Comments: The White House’s annual Economic Report of the President included a grim view on crypto, including a statement that many crypto assets “have no fundamental value.” This came as Coinbase received a Wells Notice from the SEC (which serves as a possible forewarning of future enforcement actions), stating that some of its services are under investigation for violations of securities laws. These actions are a further sign of a coordinated effort against crypto in the US.
Do Kwon arrested, Montenegrin officials say
Comments: The former founder and CEO of Terra blockchain and its native token LUNA, was arrested this week. Last year, Terra suffered a significant setback when its algorithmic stablecoin, UST, suffered a depegging event. This led to the downfall of the Terra Protocol and kickstarted a series of failures among centralized crypto companies.
Tether (USDT) payments launch on Telegram
Comments: USDT is a stablecoin that holds reserves aimed at allowing it to keep a 1:1 peg to the USD. Telegram users can now send each other USDT, which can easily convert any cryptocurrency into dollars, euros, or yen on an exchange in a quick manner. Any crypto moves coming from relevant social media players like Telegram are important for wider adoption.
Nasdaq to launch custody services for crypto
Comments: Nasdaq said it will offer crypto custody services for Bitcoin and Ethereum by the end of the second quarter of this year. Given its size and reputation, this new service is an important one for the crypto industry’s development and adoption.
What to Watch: Crypto investors will be closely monitoring any new regulatory developments from the Federal Reserve, as well as potential new victims of the ongoing banking crisis. Macro indicators, such as consumer confidence on Tuesday, GDP and jobless claims on Thursday, and PCE on Friday, are also likely to have an impact on the broader market. On Wednesday, Federal Reserve Vice-Chair Michael Barr is set to testify before the US House of Representatives regarding the ongoing banking crisis. This testimony could provide valuable insights into the Fed's current stance on financial regulation and may have implications for the crypto industry.
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