Crypto Update | The SEC’s Dwindling Influence on Crypto Markets Noelle Acheson, the mind behind the Crypto Is Macro Now newsletter, explores bitcoin above $38,000, rates expectations, U.S.SEC influence and more.Noelle Acheson, the mind behind the Crypto Is Macro Now newsletter, explores bitcoin above $38,000, rates expectations, U.S.SEC influence and more.To get the show every day, follow the podcast [here](https://link.chtbl.com/rnT0IiTu).Today’s Stories: From our sponsors: CME Group Cryptocurrency futures and options provide market-leading liquidity for bitcoin and ether trading.These cash-settled contracts give full exposure to crypto performance without the hassle of holding the physical position.No digital wallet? No problem.
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All original music by [ Doc Blust](https://soundcloud.com/therituallive) and Colin Mealey.Audio Transcript: This transcript has not been edited and may contain errors.It’s Wednesday, November 29th, 2023 and this is Markets Daily from CoinDesk.My name is Noelle Acheson, CoinDesk collaborator and author of the Crypto is Macro Now newsletter on Substack.
On today’s show we’re talking about bitcoin above $38,000, rates expectations, SEC influence and more.So you don’t miss an episode, be sure to follow the podcast on your platform of choice, and turn on notifications.And just a reminder, CoinDesk is a news source and does not provide investment advice.Now, a markets roundup.
Crypto markets are climbing.According to CoinDesk Indices, at 9 a.m.Eastern time this morning, bitcoin was up almost 2% over the past 24 hours, trading at 38,118 dollars.Ether was trading up 1%, at 2,054 dollars.Elsewhere, Solana was up almost 8%, Dogecoin up 5% and the RUNE token was up more than 11%.And moving outside of crypto markets, Coinbase’s share price was up 7% yesterday.One notable feature of yesterday’s moves was that bitcoin held above 38,000 dollars.The asset’s price has approached that threshold a few times in recent weeks, and on Friday actually broke above it, reaching its highest point since May of last year.
But this recent move is the first time since then that it has stayed above this level for more than a few hours.Of course, things can turn fast in crypto as you know, and it could dip back below.But this does feel different.There are many drivers of this change.One is the relief that the Binance suit has been easily digested by the market, and that uncertainty is now behind us.Another is the continued accumulation ahead of the expected spot ETF approval.But the main force yesterday probably had more to do with the macro economy.In macro matters today, I have to discuss the sharp shift in rates expectations.
Yesterday, several U.S.Federal Reserve officials gave public remarks that reinforced expectations that the rates peak is in.Even Governor Christopher Waller, typically one of the more hawkish members of the FOMC committee, said that he was confident that the central bank’s policy was currently well-positioned to get inflation back to 2%.In other words, he doesn’t see the need to hike further.And his colleague Governor Michelle Bowman, who has often suggested that more hikes are needed, gave a speech yesterday that signaled a softening of her position.She is still in favor of hiking rates again if inflation progress stalls.But she did say that now, it would depend on the data.Markets reacted.
The yield on the 10-year U.S.treasury dropped below 4.3% for the first time since September.The DXY dollar index continued its decline, bringing the drop over the past month to 3.5%.And the futures market is now signaling a 75% probability of the first rate cut in or before May, and a 99% probability of two rate cuts before the end of 2024.
All of this is good for most assets, but especially for those that don’t have lower earnings or cash flow problems to worry about.It’s also good for assets with no yield, as they become more attractive as yields elsewhere drop.In other words, it’s good for gold, which yesterday came within a hair’s breadth of its all-time high.And, it’s good for bitcoin and by extension the whole crypto market.In stocks, the U.S.
indices were surprisingly muted yesterday, given the strong downward moves in yields.
The S&P 500 was up only one tenth of a percent, Nasdaq was up three tenths, and the Dow Jones was up a quarter.Futures are pointing to modest gains today.In Europe, stocks were mixed yesterday, with the FTSE 100 flat, the German DAX up almost two tenths, and the Eurostoxx 600 down three tenths.This morning, things are looking more positive for the continental indices, with the DAX up just over 1%.
In Asia, sentiment was weak today, with Japan’s Nikkei dropping a quarter of a percent, the Shanghai Composite falling by just over a half, and Hong Kong’s index falling more than 2%.In commodities, oil prices jumped around 2% yesterday, the largest gain in a week, on the possibility that OPEC+ will extend or deepen production cuts at its meeting tomorrow.Earlier today, the Brent crude benchmark was up a further eight tenths of a percent, trading at 82 dollars and 42 cents per barrel.As I mentioned earlier, the gold price yesterday came close to its all-time high, and this morning is holding on to recent gains, trading at 2,039 dollars an ounce.Stay with us – after the break we’re going to look at the SEC’s dwindling influence on crypto markets.Welcome back! In this section, I’m going to draw on research by Kaiko Data that shows what has happened to the prices of crypto assets designated as securities by the U.S.Securities and Exchange Commission.
First, to set the stage, so far in 2023, the SEC has sued four crypto platforms for illegally operating as unregistered securities exchanges, among other things.Most suits included a list of tokens that the SEC considered examples of securities.Note that in no case were the token issuers given a chance to defend themselves, but that’s a different conversation.Kaiko compiled a list of the mentioned tokens, and counted how frequently they were cited.Five tokens were categorized as securities in three out of the four suits.These are: Solana, Cardano, Filecoin, Sandbox and Polygon’s MATIC token.Kaiko then compiled an equally-weighted portfolio of the five, and calculated its aggregate performance since the beginning of the year.
No surprise, the value of the hypothetical basket is now almost 30% higher than in early January.The announcement of the Coinbase suit in June triggered a sharp selloff in the tokens that the SEC singled out as securities – these included several others not in the basket of five.A large part of the selloff was due to the delisting of these tokens by Robinhood and other platforms, with some market makers selling their holdings.When the Kraken suit was announced just over a week ago, however, prices dropped slightly but have since largely recovered.
There were no high-profile delistings after the SEC action became public.And the market as a whole didn’t seem particularly bothered.My interpretation of this is that investors are placing a low probability on the SEC winning the ongoing suits, especially after the ruling in the Ripple case earlier this year.
You may remember that the judge in the case ruled that XRP was not a security, but that certain types of sales could be.The underlying message is that investors increasingly believe that the SEC can’t do that much damage to the crypto market as a whole, at least not anymore.Earlier this year, regulatory risk was cited as one of the biggest headwinds for token prices.The data compiled by Kaiko suggests that the regulatory risk headwind just might be lifting.Thanks for listening – that’s it for today’s show..
