After being as high as $98,000 earlier last week, bitcoin has slipped 6% as the approval of the US crypto market structure bill (CLARITY Act) stalls, and renewed tariff fears between the US and European Union rattle market sentiment, writes Simon Peters, cryptoasset market analyst at multi-asset investment platform eToro.
The CLARITY Act, which is intended to create a clear regulatory framework for digital assets in the US, has seen key players in the crypto industry withdraw their support, with the offering of yield on stablecoins being at the center of the disagreement.
Banks have argued that allowing yield on stablecoins could draw deposits away from traditional bank accounts creating financial stability concerns, whilst key crypto players have argued that traditional finance is aiming to kill competition by prohibiting this.
The bill’s future is now uncertain, with some analysts suggesting it could be pulled altogether if no agreement can be reached.
Looking ahead to this week we have PCE personal consumption expenditures data – the Fed’s preferred inflation measure – as well as US GDP data being released on Thursday. A soft print could boost investor hopes for sooner cuts to interest rates by the Fed and cause cryptoasset prices to rise.
BIGGEST MOVERS
$DASH is up over 116% in the last seven days and still riding the ‘interest in privacy coins’ wave.
$ICP is up 37% from last week following a proposal by DFINITY, a major contributor to the Internet Computer blockchain to slash the rate at which new ICP are minted as well as mechanisms to boost token demand and increasing burning – the process of permanently removing tokens from circulation, reducing the total supply.
Discover more here: https://www.etoro.com/discover/markets/cryptocurrencies/market-movers
EYE-CATCHING STORIES
US spot bitcoin ETFs see best week since October
The US spot bitcoin ETFs saw just over $1.4 billion in inflows last week, the highest weekly amount since early October.
Wednesday saw $840.6 million in inflows alone, with BlackRock’s IBIT pulling in $648.4 million – its nineteenth largest day.
In addition Tuesday and Wednesday also saw around $400 million of short positions liquidated – where traders betting against a bitcoin price rise were forced out of their positions, adding to the buying pressure and propelling bitcoin to the $98,000 price level.
