The interplay between federal monetary policies and regulatory decisions by the US Securities and Exchange Commission (SEC) continues to shape the cryptocurrency industry. As experts delve into the nuances of these impacts, significant shifts are observed in both market dynamics and institutional strategies.
Michael Saylor of MicroStrategy and Arthur Hayes, co-founder of BitMEX, provide insights into the potential impact on major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).
Future Predictions for the Crypto Market From Industry Titans
Michael Saylor, executive chairman and co-founder of MicroStrategy, projects a pivotal summer for the cryptocurrency sector. According to Saylor, the SEC will likely classify Ethereum as security.
Consequently, the commission will potentially deny the spot Ethereum ETF applications from several asset managers, including BlackRock. These predictions were shared during his presentation at the MicroStrategy World 2024 conference.
Saylor extends his forecast to other prominent cryptocurrencies such as BNB, Solana (SOL), XRP, and Cardano (ADA). He suggests they, too, will receive similar designations as unregistered securities. Saylor asserts that only Bitcoin (BTC) enjoys full institutional acceptance, epitomized as the “one universal” institutional-grade asset.
“None of them will be wrapped by a spot ETF, none of them will ever be accepted by Wall Street,” Saylor stated,
Read more: Ethereum ETF Explained: What It Is and How It Works
Meanwhile, the market’s anticipation for the SEC’s decision on spot Ethereum ETFs has dramatically shifted. Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, said that the “odds of ETH ETF approval by May deadline are down to 35%.”
The pessimism also comes from the issuers themselves. Earlier in April, Jan van Eck, the founder and CEO of asset manager VanEck, shared skepticism regarding the SEC’s likelihood of approving spot Ethereum ETFs. His thoughts are noteworthy as his company and 21Shares are among the asset managers eagerly awaiting Ethereum ETF approval at the end of this month.
The situation is becoming more complex due to the ongoing legal battles between the SEC and Ethereum-based projects such as Uniswap and Consensys—MetaMask’s parent company. BeInCrypto reported that the SEC issued a Wells notice for those two companies.
Consensys filed a lawsuit against the SEC after receiving the notice. The lawsuit’s outcome will be crucial for companies dealing with ETH and related products.
How Federal Policies Influence Crypto Stability and Growth
As regulatory waters are navigated, the broader economic policies of the US Federal Reserve also play a crucial role in determining the liquidity and viability of cryptocurrencies. Arthur Hayes, co-founder of BitMEX, explores the effects of the Federal Reserve’s recent decision to slow its balance sheet reduction pace.
This action effectively introduces $35 billion monthly into the economy.
Concurrently, the Treasury’s issuance of additional short-term Treasury bills aims to bolster liquidity. This effort is further impacted by the Federal Deposit Insurance Corporation’s (FDIC) maneuvers to insure deposits after the collapse of Republic First Bank. These moves collectively seek to stabilize the financial environment by adding significant contingent liabilities to the system.
Hayes interprets these actions as likely to alleviate some financial pressures on cryptocurrencies, predicting a stabilization and gradual increase in Bitcoin prices. He foresees it to consolidate in the $60,000 to $70,000 range by August.
“While I don’t expect crypto to fully realize the recent US monetary announcements’ inflationary nature immediately, I expect prices to bottom, chop, and begin a slow grind higher,” Hayes wrote.
Read more: How to Protect Yourself From Inflation Using Cryptocurrency
Bitcoin’s price has plummeted for the past few days, reaching a low of $56,000. However, at the time of writing, Bitcoin has recovered. It is now trading at $59,345, representing an increase of 2.57% for the last 24 hours.
The crypto industry is currently at a crucial point with the ever-changing regulatory and monetary landscapes. The insights from Saylor and Hayes highlight the complex interdependencies and the potential for both challenges and opportunities ahead. Understanding these dynamics is essential for stakeholders aiming to navigate the uncertainties of this volatile market.
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