Bitcoin (BTC) surged back above $30,000 after 10 months, and ether (ETH) has rallied above $2,000 following Ethereum’s successful Shapella upgrade and US inflation figures were better than market expectations. The Nasdaq Crypto IndexTM  (NCITM) rose 10.0%. ETH stole the spotlight this week, rising 13.9%, while BTC increased 8.4%. BTC and ETH reached important price levels not seen since mid-2022, providing a psychological boost to investors that supports our perspective that crypto is currently in a recovery phase. 

 

 

Shanghai is live: The completion of Ethereum’s transition to Proof-of-Stake

 

Our research team wrote a short piece on the activation of the Shanghai+Capella (Shapella) hard fork last Wednesday. This upgrade has enabled ETH withdrawals, which may attract more attention from institutional investors seeking ETH's "risk-free rate" and could result in more ETH being locked up, thereby reducing its circulating supply and potentially driving up its price in the long run. 

 

March inflation reading was lower than expected as Fed rate hikes take hold

Inflation rose just 0.1% and headline CPI grew by 5.0% year-on-year, the lowest increase since May 2021, less than the expected (5.2%), and much less than February’s 6.0%. CME futures are now pointing to one last rate hike at the next FOMC meeting.

 

New crypto regulation events: G7 discussions and MiCA in Europe

The FTX incident triggered a wake-up call for most governments regarding crypto regulation. Despite some differences in crypto regulation policies and priorities, most countries agree that more regulation is necessary. In Europe, MiCA, a broader package of crypto regulation with an emphasis on crypto service providers, will affect 27 countries and will be voted on this week.

 

FTX is considering using creditor money to restart crypto exchange

Although still in the early stages, FTX may use remaining customers' funds (as well as raising more money) to restart its failed business in a more sustainable and compliant manner. Customers would be given an interest in the new exchange.

 

Mastercard drops free NFTs, launches Web3 music accelerator

Payment giant Mastercard's new initiative seeks to help musicians power a transition to Web3. One of the strongest use cases for NFTs and blockchain technology is to improve outcomes for artists in music and entertainment.

 

eToro to offer crypto trading directly to Twitter users

Twitter will offer real-time crypto price feeds and information while directing customers to trade on the eToro exchange. This plan aligns with owner Elon Musk's plans to integrate financial services into the platform to create a "super app."

 

What to watch this week:

 

On the macro front, initial jobless claims will be released on Tuesday and services and manufacturing PMI on Friday. Both readings could provide more insight into the Fed’s next move.

 

From Hashdex:

 

Our Research Team will host a webinar launching Hashdex’s Market Pulse for Q1’2023, a comprehensive research report recapping the most important events of the first quarter, discussing the key ecosystem developments that are impacting crypto’s investment case. You can register for the webinar here. 

 

 

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