Hero's Image

SEC Chair faces Congressional grilling, crypto prices pullback, and US companies look offshore as EU approves MiCA

The Hash Insider



After underwhelming earnings reports and an absence of good macro news, risk assets underperformed for the week. Crypto assets experienced a “logical and healthy” pullback, giving up most of April’s gains. The Nasdaq Crypto IndexTM  (NCITM) fell 10.7%, driven by declines in bitcoin (BTC), down 9.7%, and ether (ETH), down 12.7%. 


MiCA, the first EU-wide crypto regulations, is finalized 

The lack of regulatory clarity in the US contrasts with other parts of the world, including Europe, which approved the Markets in Crypto Assets (MiCA) regulation on Thursday. The regulation provides a clear regulatory environment for the crypto industry and will  come into effect within 18 months across all EU member states. More of our perspective on MiCA and the global regulatory landscape can be found here.  




A new SEC definition for ‘Exchanges’ has big implications for crypto and DeFi

This week, there have been important developments regarding crypto regulation. The SEC is considering amending a proposed rule that may require digital asset exchanges and decentralized finance platforms to register with the regulator. This raises the question of how decentralized platforms, which are often maintained by global online communities of coders, can comply with SEC regulations. The crypto market is grappling with increased pressure by US regulators, which, along with a lack of regulatory clarity, may drive innovation and companies out of the country. 



US House committee publishes draft stablecoin bill

Another important regulatory event this week was the release of a draft version of a stablecoin bill by the US House Financial Services Committee. Stablecoins currently account for over 10% of crypto markets and serve as a safe haven for crypto funds. They also facilitate fast peer-to-peer and cross-border payments, making them an essential use case in the crypto ecosystem, which takes away the usual price volatility of flagship crypto assets such as BTC and ETH. Furthermore, citizens of countries with inflationary currencies and strong capital controls can use stablecoins as a way to dollarize their savings easily.



SEC targets fallen exchange Bittrex

Bittrex, which was once the largest US cryptocurrency exchange, is facing a lawsuit from the SEC for allegedly violating investor protection laws. The exchange was based in Seattle, but it has already announced that it is leaving the US for good. Last year, the exchange agreed to pay $29 million in fines to the SEC. Bittrex claims that regulators failed to provide sensible policies that would foster innovation and enhance the American economy.



Coinbase CEO won’t rule out relocating company away from US

The world’s second-largest centralized crypto exchange, Coinbase, has announced that it may leave the US due to the lack of regulatory clarity. Coinbase has exchanged letters with the SEC after receiving a Wells notice regarding some of its services. CEO Brian Armstrong has stated that the company is ready to go to court against the SEC. 



House Financial Services Committee members grill SEC Chair Gensler 

SEC Chair Gary Gensler testified before the US House Financial Services Committee to discuss SEC oversight. The committee had previously issued a letter to Gensler, urging him to work with Congress to provide regulatory clarity and protections for innovators and investors. During the hearing, Chair Gensler was unable to give a specific answer when questioned about whether ETH is a commodity.




From Hashdex:

Events from Q1’23 reminded many investors of the benefits of a truly global and decentralized digital currency immune to monetary mismanagement. Beyond Bitcoins’s strengthening investment case, our research team shares the most important crypto ecosystem developments in our Q1’23 Crypto Market Pulse report.




What to watch this week:

Amazon, Microsoft, Alphabet, and Meta Platforms, will release their earnings this week, which will provide crucial insights into economic activity. The first-quarter 2023 GDP estimate will be released Thursday and PCE on Friday, both of which will inform the May 3 FOMC meeting.




This material expresses Hashdex Asset Management Ltd. and its subsidiaries and affiliates (“Hashdex”)'s opinion for informational purposes only and does not consider the investment objectives, financial situation or individual needs of one or a particular group of investors. We recommend consulting specialized professionals for investment decisions. Investors are advised to carefully read the prospectus or regulations before investing their funds. The information and conclusions contained in this material may be changed at any time, without prior notice. Nothing contained herein constitutes an offer, solicitation or recommendation regarding any investment management product or service. This information is not directed at or intended for distribution to or use by any person or entity located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Hashdex to any registration or licensing requirements within such jurisdiction. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Hashdex. By receiving or reviewing this material, you agree that this material is confidential intellectual property of Hashdex and that you will not directly or indirectly copy, modify, recast, publish or redistribute this material and the information therein, in whole or in part, or otherwise make any commercial use of this material without Hashdex’s prior written consent. 

Investment in any investment vehicle and cryptoassets is highly speculative and is not intended as a complete investment program. It is designed only for sophisticated persons who can bear the economic risk of the loss of their entire investment and who have limited need for liquidity in their investment. There can be no assurance that the investment vehicles will achieve its investment objective or return any capital. No guarantee or representation is made that Hashdex’s investment strategy, including, without limitation, its business and investment objectives, diversification strategies or risk monitoring goals, will be successful, and investment results may vary substantially over time. Nothing herein is intended to imply that the Hashdex s investment methodology or that investing any of the protocols or tokens listed in the Information may be considered “conservative,” “safe,” “risk free,” or “risk averse.”

Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Hashdex, and Hashdex does not assume responsibility for the accuracy of such information. Hashdex does not provide tax, accounting or legal advice. Certain information contained herein constitutes forward-looking statements, which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue”  “believe” (or the negatives thereof) or other variations thereof. Due to various risks and uncertainties, including those discussed above, actual events or results, the ultimate business or activities of Hashdex and its investment vehicles or the actual performance of Hashdex, its investment vehicles, or digital tokens may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should not rely on such forward- looking statements in making their investment decisions. None of the information contained herein has been filed with the U.S. Securities and Exchange Commission or any other governmental or self-regulatory authority. No governmental authority has opined on the merits of Hashdex’s investment vehicles or the adequacy of the information contained herein

Logo Hashdex
The material contained on this website is for informational purposes only and Hashdex, and its affiliates, is not soliciting any action based upon such material. The material is not to be construed as investment advice nor is it to be construed as recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Further, the material contained on this website does not constitute a representation that the financial instruments described therein are suitable or appropriate for any person. Past performance is not an indication of any future performance. This website may contain advertising of financial products.