Bitcoin rose to trade above US$26,000, recovering some of the ground it lost in the week since the U.S. Securities and Exchange Commission (SEC) filed lawsuits against two of the world’s largest crypto exchanges. The U.S. regulator accuses Binance.US and Coinbase of breaking securities rules. All other top 10 non-stablecoin cryptocurrencies also gained, with Binance’s native token BNB leading the gains. 

See related article: Crypto industry reacts to SEC’s lawsuit against Binance

Cryptos rise

Bitcoin gained 1.00% to US$26,074 in the 24 hours to 4 p.m. in Hong Kong. The world’s largest cryptocurrency by market capitalization is up 1.32% on the week, according to CoinMarketCap data. 

Ether, the world’s second biggest cryptocurrency after Bitcoin, rose 0.64% to US$1,748 in the past 24 hours. However, it is down 3.60% over the last seven days.

BNB, the native token of the world’s biggest cryptocurrency exchange Binance, climbed 5.10% to US$235, although it posted 15.11% weekly losses. The gains come after U.S. Republican Congressman Warren Davidson tweeted on Monday that he had filed a bill to restructure the SEC and remove its current chairman Gary Gensler. 

“U.S. capital markets must be protected from a tyrannical Chairman, including the current one. That’s why I am introducing legislation to fix the ongoing abuse of power and ensure protection that is in the best interest of the market for years to come,” Davidson said. 

SEC chairman Gary Gensler reemphasized the agency’s determination to strictly regulate the crypto sector in a tweeted repost of his statement made last week.

Solana, Polygon and Cardano – three of the crypto tokens named by the SEC as securities – all gained on Tuesday afternoon. However, all three have recorded losses of over 20% in  the week since the SEC clampdown started. 

Solana gained 2.14% to US$15.42 in 24 hours, while Cardano rose 0.28% to US$0.2795. Polygon climbed 2.39% to US$0.6459. 

“The recent lawsuits filed by the SEC against Binance and Coinbase indicate a significant shift in regulatory approach towards the digital asset industry,” Mahin Gupta, founder of Liminal, a wallet infrastructure and custody solutions platform, said in an emailed statement. 

“While these measures may ultimately contribute to legitimizing the Web3 industry in the long run, it is important to acknowledge that such strong actions could potentially stifle innovation,” Gupta added.

The increasing regulatory clampdown on cryptocurrency exchanges in the U.S. is creating opportunities in the field of digital finance in Asia. 

In the same week that the U.S. SEC announced it would sue Coinbase and Binance.US,  stablecoin operator Circle announced that it had received a Major Payment Institution license from the Monetary Authority of Singapore (MAS), the city state’s central bank. 

Similarly, digital assets bank Sygnum said Tuesday that MAS had granted it an in-principle approval for its Major Payment Institution Licence. The bank now plans to expand its regulated operations in Singapore, including its crypto brokerage service. 

In the last 24 hours, the global crypto market capitalization rose 1.17% to US$1.06 trillion, and total market volume strengthened 5.57% to US$28.83 billion. 

Ethereum NFTs dip

The indexes are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.

In the non-fungible token (NFT) market, the Forkast 500 NFT index dropped 1.54% to 2,964.53 in the 24 hours to 5 p.m. in Hong Kong. The index  recorded losses of 9.78% over the past seven days.

The Forkast ETH NFT Composite dropped 0.99% to 1,049.57 in 24 hours, while dropping 5.42% for the week.

Total NFT sales volume on the Ethereum blockchain dropped 18.19% to US$11.86 million over the past 24 hours, according to CryptoSlam data. Bored Ape Yacht Club, the largest Ethereum-based NFT collection by sales volume, dropped 6.03% to US$1.38 million in 24 hours. 

“The market is struggling due to low ETH volume, lowering prices, etc. The SEC filings are really beginning to impact the market,” said Yehudah Petscher, NFT Strategist at Forkast Labs, the parent company of Forkast.News. 

Despite the negative outlook elsewhere, NFT sales volume on the Bitcoin network gained 82.66% to US$3.9 million. Sales of uncategorized Ordinals — Bitcoin NFTs that are not part of an established collection — climbed 1.15% to US$1.65 million. 

Asian, European equities rise; U.S. futures gain

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Stock market display board. Image: Envato Elements

Asian equity markets gained on Tuesday after China’s central bank cut its seven-day reverse repurchase rate by 10 basis points to 1.9% from 2%. The move comes as the world’s second biggest economy struggles to recover from three years of pandemic-induced disruptions. U.S. markets also showed gains amid hopes that the U.S. Federal Reserve will leave interest rates unchanged this week. 

The Shanghai Composite gained 0.15% and the Shenzhen Component Index rose 0.76%. Hong Kong’s Hang Seng Index climbed 0.60% and Japan’s Nikkei 225 strengthened 1.80%. 

“Global stock markets are likely to experience a wide boost this week – not just the mega cap tech stocks – as the U.S. Federal Reserve is expected to pause interest rate hikes,” said Nigel Green, founder and chief executive of financial management firm deVere, in an emailed statement.

The U.S. central bank is expected to keep interest rates unchanged at its meeting on June 13 and 14. Current interest rates in the U.S. are between 5% and 5.25%, the highest level since 2006, after 10 consecutive raises starting in March last year. 

The U.S. is also scheduled to release its latest consumer price index data later on Tuesday. Inflation in the world’s biggest economy likely slowed to 4.1% in May, from 4.9% in April and 5% in March, according to Trading Economics

U.S. stock futures mostly rose as of 7 p.m. in Hong Kong. The Dow Jones Industrial Average futures dropped 0.02% while S&P 500 futures rose 0.13%. Nasdaq 100 Futures also gained 0.30%. 

European bourses traded flat on Tuesday, as investors await policy decisions from both the European Central Bank (ECB) and the U.S. Fed. The ECB is scheduled to meet on Thursday and implement another 25 basis point interest rate hike to 3.5% in an attempt to curb inflationary pressures. 

The benchmark STOXX 600 rose 0.03% and Germany’s DAX 40 gained 0.09% during afternoon trading hours in Europe. 

The eurozone reportedly slipped into recession in the first three months of 2023.

“High inflation, rising interest rates and treacherous periods of volatility have defined much of the past 12 months – all of which have made for extremely difficult trading conditions,” Daniela Hathorn, Senior Market Analyst at trading platform, said in an emailed statement. 

“The challenging market is hitting everyone at present, but one way to try and slow the tide is by diversifying your investments. It’s better to spread the risk across different asset classes, companies and investments than to pursue profits from one single area that could quickly go south,” Hathorn added.