Key takeaways
- The price of bitcoin fell last week ahead of inflation and the Federal Reserve news, but it did not recover as much as other risk assets.
- US presidential candidates Donald Trump and Joe Biden continue to prove that cryptocurrencies are a notable election issue.
- Terraform Labs agreed to a $4.5 billion settlement with the SEC.
- Binance founder Changepeng Zhao was found to be one of the 25 richest people in the world.
- This week, crypto analysts are watching the price of bitcoin closely to see if the recent volatility is over.
The past week has been a wild ride for the bitcoin price (btc).
The price of bitcoin fell below $67,000 on Tuesday ahead of May inflation data and the Federal Reserve meeting. bitcoin made up some ground on Wednesday before falling again on Friday. While other risk assets, such as stocks, recovered thanks to colder-than-expected inflation data, bitcoin failed to recoup losses.
Despite bitcoin's performance last week, cryptocurrencies are having a moment in the US presidential election campaign. Presumptive Republican nominee Donald Trump met with bitcoin miners last week and a leaked email showed that members of President Joe Biden's administration will meet with members of the crypto community.
Furthermore, Terraform Labs has reached a massive $4.5 billion deal with the US Securities and Exchange Commission (SEC) with respect to TerraUSD stablecoin disaster coming in 2022and a research report concluded that binance Founder and former CEO Changpeng "CZ" Zhao is one of the 25 richest people in the world.
Cryptocurrencies Grow as US Presidential Election Issue
Former President Donald Trump has changed his stance on cryptocurrencies during the current election cycle, and is now actively courting the crypto community to gain an advantage over his rivals Joe Biden and Robert F. Kennedy Jr.
After meeting with bitcoin miners at his Mar-a-Lago property, Trump urged cryptocurrency enthusiasts on his Truth Social platform to "vote for Trump," positioning himself as an advocate against what he calls "the hate of "Biden towards Bitcoin."
This new approach follows Trump's previous strong criticism of cryptocurrencies during his presidency, where he labeled them as highly volatile and unregulated assets that facilitate illegal activities. Now, however, the Trump campaign has announced plans to accept donations in cryptocurrency, with the goal of mobilizing a "crypto army" to ensure his election victory.
On the other side of the aisle, the Biden Administration's approach to Bitcoin and cryptocurrencies has been criticized, especially with a recent veto on legislation supporting the custody of cryptocurrencies by financial institutions and proposed taxes about Bitcoin mining. According to a report in The blockBiden is also expected to begin accepting campaign contributions through cryptocurrencies.
People from Biden's camp will reportedly attend a roundtable on Bitcoin and blockchain next month, according to Bitcoin Magazine.
Terraform Labs Agrees to $4.5 Billion SEC Settlement
Last Wednesday, a court filing revealed that Terraform Labs accepted a settlement of almost $4.5 billion to resolve an SEC lawsuit. The filing sought court approval for the deal, which would end a legal battle over the company's role in the dramatic failure of TerraUSD in May 2022, which led to an estimated $40 billion loss for investors.
The settlement includes approximately $3.5 billion in disgorgement, more than $460 million in prejudgment interest and $420 million in civil penalties. Former CEO Do Kwon will also personally contribute more than $200 million to Terraform's bankruptcy estate and is prohibited from serving as an officer or director of a public company.
This settlement, originally reached ahead of a hearing on May 29, is intended to impose substantial financial remedies and facilitate a quick recovery for investors. The SEC highlighted that these sanctions are intended to deter future fraudulent activities in the cryptocurrency market. Terraform Labs declared bankruptcy earlier this year, just before his SEC trial, where he was found guilty of defrauding investors.
Binance Founder Changpeng Zhao Is Estimated to Be the 24th Richest Person in the World
Since his imprisonment, Binance founder Changpeng "CZ" Zhao has seen a significant increase in his net worth.
Forbes Zhao's fortune is now estimated to be $61 billion, making him the 24th richest person in the world.
This increase comes from its 90% stake in Binance, valued at $33 billion. Zhao resigned as CEO of the company in November 2023 as a result of a agreement with the Prosecutor's Office with the United States Department of Justice. Despite the company's legal challenges and a $4.3 billion fine, Zhao's personal financial hit was limited to a $50 million fine. Since then, Binance has continued to grow, with its market share increasing to 42% from 38% before Zhao's departure.
A major boost to Zhao's wealth comes from his holdings in Binance Coin (BNB). Forbes He estimates that he owns around 94 million tokens, which is 64% of all BNB tokens. Despite Binance's legal issues, BNB is up 100% in 2024, reaching a market capitalization of $110 billion.
Binance's initial coin offering in 2017 was undersubscribed and forensic analysis indicates that Zhao and Binance retained a significant portion of the unsold tokens. BNB is currently heavily traded on the Binance platform, and the token's performance has continued to add billions to Zhao's net worth even as he serves his sentence.
What to expect in the markets this week
All eyes are on the price of bitcoin this week as digital asset investment products, including US-based bitcoin ETFs, saw more than $600 million in outflows amid the price decline of bitcoin last week, according to CoinShares.
Despite the price drop, the notorious bitcoin bulls at MicroStrategy (MSTR) Announced another $500 million convertible note offering in order to buy more bitcoin before upgrading the offer to $700 million later in the week.
While bitcoin has traded in a relatively tight range this month, the crypto asset has been outperformed by several bitcoin mining stocks, as noted in a JPMorgan report. This is believed to be an answer to Core Scientific's question (CORZ) deal with CoreWeave related to artificial intelligence.
The SEC's approval of spot ether ETFs now also appears to be a question of "when" rather than "if." SEC Chairman Gary Gensler indicated at a Senate hearing last week that the matter will be resolved over the summer. Additionally, Bloomberg analyst Eric Balchunas gives a 50-50 chance that approval will occur before July 2. Prediction Market Polymarket puts the chances of a spot ether ETF trading before July 4 at 75%.
