Heightened attention on the US digital asset industry by the SEC offset the favorable impacts of accommodative FOMC forecasts, resulting in cryptocurrencies experiencing losses.
The cryptocurrency market is set to conclude an eight-week period of gains, with the total market cap dropping 3.22% to $1,551 billion for the week ending December 17. Failure to recover from these losses by the weekend could result in the end of the winning streak.
A widespread sell-off in the cryptocurrency market on Monday led to a 5.12% decrease in the total market cap to $1,521 billion. Notably, bitcoin (BTC) dropped from its 2023 high of $44,747 to a weekly low of $40,211.
The decline is attributed to increased regulatory scrutiny by lawmakers, particularly from the SEC and the Federal Reserve, as well as the lack of progress in establishing a BTC-spot ETF market.
Midweek relief was provided by the US Federal Reserve, which kept interest rates unchanged at 5.50% in line with expectations. Additionally, the Fed's projections, indicating a softer landing and a more dovish Fed Funds Rate Trajectory, boosted demand for riskier assets.
Senator Elizabeth Warren and her stance against cryptocurrencies were a major focus during the week. She garnered support for the Digital Asset Anti-Money Laundering Act, which received backing from additional senators, including three Banking Committee members.
Progress toward a BTC-spot ETF market faced obstacles from the SEC regarding In-Kind Creates, pushing issuers to revise their applications to Cash Creates. Despite efforts by various issuers, including Blackrock and Fidelity, the SEC appears unwavering in its stance on this matter.
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