Last Updated : May 11, 2023 / 09:01 IST
Cryptocurrency roundup for May 11: Crypto whales scoop up Pepe Token amid 50% price drop, Grayscale worries over SEC crypto regulations: Coinbase custody in focus and more
A daily round-up of the most interesting articles on cryptocurrencies like Bitcoin, Ethereum and Tether to help jump-start the day.
Pepe Token
Pepe Token: Whales Make Big Moves in the Face of Market Decline
As the cryptocurrency market remains volatile, crypto whales have shown an increased interest in the Pepe token, accumulating large amounts of digital assets despite a recent 50% drop in its price.
> This trend indicates that these prominent players are optimistic about the token's future prospects and see potential in its growing popularity and use cases.
> Among the notable transactions, one whale withdrew a staggering 1.4 trillion Pepe tokens, valued at $2.76 million, from the Binance exchange.
> Another investor purchased 212 billion tokens, worth $429,000, using Ethereum at a price significantly lower than the token's recent peak.
> A third whale acquired 424 billion Pepe tokens, with a total value of $864,000, also using Ethereum as the mode of transaction. Full report here.
EU Regulations
Embracing MiCA: How the EU's Crypto Regulations Could Guide US Policy
SEC Commissioner Hester Peirce has cited the European Union's recently implemented Markets in Crypto Assets (MiCA) regulation as a potential blueprint for US cryptocurrency rules.
> During a panel discussion at the Financial Times Crypto and Digital Assets Summit in London, Peirce acknowledged that both the EU's MiCA and UK's regulatory approach could provide valuable insights for US regulators.
> Peirce, who is known for her differing opinions from SEC Chair Gary Gensler, expressed her support for an approach that informs people of the associated risks and allows them to opt-in or out, while also fostering innovation.
> The MiCA regulation, which was officially adopted by the EU last month, aims to establish a "global standard-setter" for digital assets and attract digital asset businesses. Continue here.
Banking
Crypto vs Gold: S&P Global Examines Inflation Protection Claims
On Tuesday, S&P Global acknowledged the potential of cryptocurrencies as assets that can protect investors from inflation.
> However, the rating agency emphasized insufficient data to back up this popular claim. "Crypto assets could theoretically be a hedge against inflation," the New York-based agency stated in a press release, pointing to adoption in some emerging markets with high inflation.
> Despite this, S&P Global remarked, "We think the track record for crypto is too short to prove this," referring to Bitcoin's weak correlation with US inflation expectations.
> Crypto proponents often view Bitcoin as a store of value assets, similar to gold, due to its programmed supply reduction every four years. More here.
Crypto Crackdown
HMRC's Cryptocurrency Crackdown: Navigating the New Era of Digital Tax Collection
Q1 Decline
Robinhood's Crypto Revenue Dips: Analyzing the Q1 Trading Decline
Robinhood experienced a 30% decrease in cryptocurrency trading revenue during the first quarter of the year, amounting to $38 million. In comparison, the firm generated $54 million in trading revenue during the same period in 2022.
> This decline occurred despite the recent price recovery of Bitcoin and ethereum.
> In the final quarter of the previous year, Robinhood saw a 24% drop in its cryptocurrency transaction revenue, falling to $39 million.
> This is a stark contrast to the company's impressive performance in the second quarter of 2021 when digital asset trading revenue reached $233 million.
> The company also reported a 42% year-on-year decrease in its crypto assets "under custody," settling at $12 billion. Full report here.
Markets
Crypto Derivatives Market Share Climbs to New Heights
The volume of cryptocurrency derivatives trading on centralized exchanges experienced a decline in April; however, a more significant drop in spot trading volume led to a new all-time high in the market share of derivatives.
> CCData reports that the crypto derivatives trading market share reached a record 77.6%, despite a 23.3% decrease in absolute derivatives trading volume to $2.15 trillion.
> This increase in market share was driven by a 40.2% drop in spot volume, which fell to $621 billion.
> The growing derivatives market share, which has now risen for three consecutive months, underscores the speculative nature of the crypto market amidst uncertainties surrounding potential pauses on rate hikes by the Federal Reserve, as indicated by CCData. Continue here.
New Regulations
U.S. House Joint Hearing Signals Urgency for Crypto Regulations: Uniting Visions
A unique joint committee hearing in the U.S. House of Representatives demonstrated a strong agreement on the necessity for new regulations concerning cryptocurrencies and other digital assets.
> The hearing also revealed the need for bridging gaps between varying visions of the proposed policies.
> Rep. Patrick McHenry, the Republican chair of the House Financial Services Committee, stated during the uncommon joint hearing with the House Agriculture Committee that the Securities and Exchange Commission (SEC) must revise its rules for broker-dealers and securities exchanges.
> McHenry also advocated for the Commodity Futures Trading Commission (CFTC) to gain more authority to regulate non-security digital assets, such as Bitcoin. Details here.
Inflation Impact
Inflation Data Impact: Bitcoin and Ether Experience Sudden Downturn
On Wednesday, Bitcoin (BTC) experienced a dip below $27,000 during midday trading, retracting from an earlier surge following the release of moderately positive U.S. inflation data.
> The BTC/USD pair on Coinbase reached a low of $26,800 before partially recovering, as shown by TradingView data.
> The leading cryptocurrency by market capitalization was trading near $27,400, having declined over 4% in the past hour and 1.8% in the past 24 hours.
> Similarly, Ether (ETH), the second-largest cryptocurrency by market capitalization, witnessed a 1% drop in the past 24 hours, trading at approximately $1,860.
> The CoinDesk Market Index (CMI), which evaluates the overall performance of the crypto market, also reported a 1% decrease over the past 24 hours.