The SOMA.finance Weekly Wrap-up #113
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Market Overview
Bitcoin bulls attempted to stage a rally this week, but the latest economic data spoiled the party, resulting in a slight decline in prices as the past seven days amounted to one extended pump and dump amid concerns about the future of interest rate cuts.?
Nonfarm payrolls in the U.S. blew away expectations, while unemployment also ticked lower, all but extinguishing hopes that the Fed would announce another 50 basis point interest rate cut at their meeting in November. The CPI sealed the deal on Thursday after coming in hotter than expected.?
If that wasn’t bad enough (at least in the minds of risk traders), the strong economy and concerns about a potential rise in inflation have led to an increase in the odds that the Fed will hold rates steady at the next FOMC meeting, which would really put a damper on any bull market rallies.?
To top it all off, the minutes from the September meeting showed that not all Fed board members were in agreement with the 50 bps rate cut, which adds to the likelihood that the final two meetings of 2024 will see 25 bps cuts – that is if they do end up deciding to keep cutting rates.??
Bitcoin spiked to a high of $64,452 early on Monday, but that quickly turned into a long wick on the daily chart, signaling to technical traders that a further pullback was in store. Wednesday saw BTC drop to support at $60,500, and on Thursday, it wicked down to $59,000, and closed the daily candle at $60,240.?
At the time of writing, Bitcoin trades at $60,125, and the total cryptocurrency market cap stands at $2.11 trillion, a decrease of 0.5% over the past week. The DeFi market cap currently stands at $81.7 billion, with a 24-hour trading volume of $4.32 billion, which is 6.3% of the total crypto market volume.
Crypto News
Noise Complaint – Residents in the Texas town of Granbury filed a lawsuit against a crypto mining operation currently operated by Marathon Digital Holdings, saying the mine is causing “intolerably loud noise conditions.” Among other requests, the plaintiffs seek a permanent injunction barring Marathon from “creating, causing, or allowing any unreasonable noise from its operations” at its Bitcoin mining facility in Granbury.?
The Great Reveal – The HBO documentary Money Electric: The Bitcoin Mystery debuted on Tuesday night, claiming that Canadian Bitcoin developer Peter Todd is Satoshi Nakamoto, the pseudonymous creator of Bitcoin. The film provided several examples of why Todd could be Satoshi, but their reasoning was largely lambasted by the crypto community as being circumstantial or a stretch of the imagination. Todd, for his part, emphatically said “I am not Satoshi” in response to the film, and most in the ecosystem align with him.?
Decentralized Debit Card – Wirex announced the early access launch of Wirex Pay, a modular chain specifically designed for payments that allows users to spend funds held in a self-custodial wallet using a debit card. Wirex Pay supports Tether, USDC, and Dai for payments and also allows users to bridge holdings from the Ethereum blockchain in exchange for gas fees. Access is currently limited to users who participated in the project's recent node sale whitelist. The new service is available in 54 countries, excluding the United States.
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And in the World of Legal Developments…
Fighting Back – The SEC continues to target crypto firms that don’t abide by the established regulations as Crypto.com became the latest exchange to receive a Wells Notice from the regulator, suggesting an enforcement action will soon follow. In response, Crypto.com filed a lawsuit against the SEC. The lawsuit argues that the regulator has “unilaterally expanded its jurisdiction beyond statutory limits” and said the SEC has “established an unlawful rule that trades in nearly all crypto assets are securities transactions no matter how they are sold.”
Stablecoin Shift – Coinbase has announced its intention to delist non-compliant stablecoins in Europe ahead of the impending MiCA deadline, set to take full effect in January 2025, in order to remain in compliance with the EU’s newly established crypto regulations. The decision to remove certain stablecoins, which could affect USDT, aligns with the EU's effort to introduce tighter controls on crypto assets, requiring stablecoin issuers to obtain e-money authorization in at least one member state.?
Payouts Approved – FTX has received the green light for its bankruptcy plan to repay creditors to move forward, setting the stage for $16.5 billion worth of funds to be distributed to the exchange’s former users. The plan will allow the exchange’s debtors to repay 98% of users roughly 119% of their claimed account value – though they won’t receive the crypto they initially deposited, instead receiving back the cash equivalent, plus interest, of the value of their assets at the time of the bankruptcy.?