By Matteo Greco, research analyst at the publicly traded digital asset and fintech investment firm Fineqia International
BTC closed at around $27,000 last week, down 3.5% from its price of $28,000 late last week. It fell to around $25,500 on Monday and rose slightly to $26,394 late Tuesday after the SEC announced it is suing Binance and Coinbase, the world’s largest crypto exchanges by volume, for trading securities it believed were they were not licensed in the US. Trading volumes remain at a low level, with BTC on-chain volume down 13% in May. The data suggests a tough time for the digital asset market in attracting investors and maintaining high trading volumes.
This can be attributed to two main factors. First, difficult macroeconomic conditions are causing investors to adjust their positions ahead of announcements at the next FED meeting on June 14. While CME futures have an 80% probability of expecting another rate hike at the next meeting, investors are still cautious as monetary policy expectations have shifted rapidly overnight.
Second, the SEC is fighting hard against stock markets. The US regulator claims that most digital assets are classified as securities and that exchanges have been selling them to US investors without properly registering them in the US. The SEC’s recent action against Binance and Coinbase caused the market to fall, followed by a slight rebound during Tuesday.
The actions of the US regulator could push many exchanges out of the country, similar to what happened in Canada. It could benefit the Asian market, which is moving towards a friendlier environment for digital assets. As of June 1, the Japanese government lifted a ban on stablecoins and the Hong Kong government legalized the trading of cryptocurrencies by private investors. For example, asset manager First Digital from Hong Kong is introducing a new stablecoin that will be pegged to the US dollar.
These moves underlie attempts by Asian regulators to attract new investors to the digital asset market, a shift in attitudes from the recent past, especially in China, where cryptocurrency trading and bitcoin mining have been restricted. laid.