Key takeaways
- Bitcoin and ether fell on Tuesday after sharp increases last week.
- Ether rose last week amid optimism over the SEC's approval of a spot ether ETF.
- The regulator set the stage for spot ether ETFs with a rule change that allows such products to be listed, but it may be months before a spot ether ETF is available for trading.
- The US House of Representatives has passed a bill that will provide more clarity and divide regulatory jurisdiction for cryptocurrencies. The bill faces the Senate and does not have the support of President Joe Biden.
- Former US President Donald Trump has doubled down on his support for cryptocurrencies, saying he will pardon the convicted founder of darknet market Silk Road.
After brief but sharp price increases last week, bitcoin (btc) and ether (ETH) fell on Tuesday.
Bitcoin briefly fell below $68,000 after trading above $70,000 early last week. Meanwhile, ether rose about 25% in 24 hours amid optimism surrounding the approval of spot ether exchange-traded funds (ETFs). However, the increase was ephemeral despite the regulatory green light for the product.
Other big news included increasing mentions of cryptocurrencies by US presidential candidates as they try to woo voters, a UK judge's scathing opinion on why Craig Wright's claim to be the Bitcoin creator Satoshi Nakamoto fails to hold up and a prison sentence for a former FTX executive.
Regulators Set the Stage for Ether Spot ETFs
On Thursday, the US Securities and Exchange Commission (SEC) unexpectedly paved the way for spot ether ETF listing on US exchanges. Ether, the cryptocurrency that powers the Ethereum network, is the second-largest cryptocurrency by market capitalization behind bitcoin.
Although the SEC's decision marked a significant regulatory changethe listing of these ETFs by companies such as BlackRock (BLACK), Grayscale and Fidelity could still take months to arrive. Products must first receive approval for S-1 Registration Filingswhich may take until July or August, according to Galaxy Digital.
If given the final go-ahead, a key question is whether ether ETFs will generate demand similar to the historic launch of spot bitcoin ETFs in the United States, which have racked up roughly $13.5 billion in inflows, according to Farside Investors. .
While some are optimistic about the new listings attracting retail and institutional investors, others remain cautious, noting that the ether market is smaller and less recognized than bitcoin's. Additionally, the lack of access to staking ether held by ETFs presents a notable limitation for investors.
House advances crypto regulation bill
The crypto industry achieved a significant victory in Washington last week when the House of Representatives voted overwhelmingly in favor of the Financial Innovation and Technology for the 21st Century (FIT21) Act.
The bill proposes elevating the Commodity Futures Trading Commission (CFTC) as the primary overseer of digital assets, giving it exclusive authority over cash or spot markets for digital products, while the SEC would regulate digital assets. with non-decentralized blockchains. This clear division of regulatory responsibilities is what the crypto industry has long sought.
Despite the House's strong 279-136 vote, the bill faces a challenging path in the Senate, where its passage is uncertain. President Joe Biden opposed FIT21, citing insufficient protections for consumers and investors.
Former President Trump doubles down on cryptocurrency support
In an attempt to appeal to libertarian voters and position himself as the pro-crypto candidate, Donald Trump called for the commutation of Ross UlbrichtThe phrase. Ulbricht, the convicted operator of the Silk Road online marketplace, is serving a life sentence for running a platform where illegal drugs and other illicit items were purchased using bitcoin.
During a speech at the Libertarian Party convention, Trump promised: "If you vote for me, on day one I will commute Ross Ulbricht's sentence. He's already served 11 years. We'll bring him home."
The move reflects Trump's strategy to broaden his base of support ahead of his rematch with President Joe Biden in November, seeking to neutralize the threat from third-party candidates such as Robert F. Kennedy Jr.
Trump's public embrace of cryptocurrencies is a major departure from his previous comments when he embraced his strong preference for the US dollar over bitcoin.
Judge rules Craig Wright is a fraud
According CABLINGA judge of the High Court of the United Kingdom has determined that the computer scientist Craig Wright lied extensively and committed large-scale forgeries in his attempt to prove that he is Satoshi Nakamoto.
In a detailed ruling released on May 20, Judge James Mellor found that Wright fabricated numerous documents to support his false claims and used the courts to perpetrate fraud.
"I am completely satisfied that Dr. Wright lied to the court extensively and repeatedly," Mellor wrote.
This ruling marks the end of a six-week trial brought by the Crypto Open Patent Alliance (COPA), which sought a declaration that Wright is not the creator of Bitcoin to prevent him from filing several lawsuits against Bitcoin developers and other parties.
Despite Wright's intention to appeal, his credibility has been significantly damaged.
What to expect in the markets this week
Regulators and cryptocurrency market observers will closely monitor the fate of the FIT21 bill as it heads to the Senate.
Additionally, another former executive of the defunct crypto exchange FTX has been sentenced. The former co-CEO of the Bahamian exchange entity, Ryan Salame, received 90 months in prison for violations of campaign finance laws and conspiracy to operate an unlicensed money transmitter.
There was also a big problem brewing on Tuesday. Bitcoin infrastructure company Riot Platforms (RIOT) said it wants to acquire bitcoin mining company Bitfarms in a part-cash, part-stock deal. Riot's takeover offer is $2.30 per Bitfarm share, a 24% premium to the stock's one-month volume-weighted average price through May 24 for a total equity value of $950 million. . Riot already owns a 9.25% stake in Bitfarms and claims the deal would result in the "world's largest publicly traded bitcoin miner."
