Welcome to the March 20, 2024 edition of the Genfinity News Recap! As you navigate through your busy workday, staying informed about the latest developments in the realms of Web3 and finance can be a challenge. However, we are here to provide you with an overview of the crypto news you might have overlooked today.
March 20, 2024 Genfinity News Recap
Ethereum
The Ethereum Foundation, a non-profit organization tied to Ethereum’s network, is under scrutiny by an undisclosed governmental authority, as indicated in its GitHub repository. Reported by CoinDesk today, this inquiry coincides with a pivotal moment for Ethereum’s technology — there is growing interest from American investment firms in offering an ETH exchange-traded fund (ETF). Despite recent approvals of Bitcoin ETFs, the SEC has been slow in greenlighting Ethereum ETFs.
Notably, Fortune has reported that the SEC is considering classifying ETH as a security, a move with significant implications not only for Ethereum but also for the prospects of an Ethereum ETF and the broader cryptocurrency market. The SEC has issued investigative subpoenas to U.S. companies in recent weeks, hinting at the scope and focus of the inquiry.
The Ethereum Foundation acknowledged the voluntary inquiry from the state authority, emphasizing the need for confidentiality. Notably, the Foundation had previously pledged to disclose any government inquiries outside of routine business operations but removed this assurance from its website along with its warrant canary, an indication some companies use to notify the public about government subpoenas or inquiries. It was speculated that the timing of the SEC’s actions may be linked to a May 23 deadline, prompting speculation about their true intentions. Following the news, Ethereum experienced a decline to $3,200, while Bitcoin fell to approximately $62,000, disappointing from its earlier recovery to $64,000.
Ethereum ETF delay
The SEC has extended the decision timeline for VanEck’s application for a spot Ether ETF listed on the Cboe BZX Exchange, with a final decision due by May 23. Cointelegraph reported that this move allows the SEC more time to deliberate on the proposed rule change. The decision follows similar delays for Ether ETF applications from Hashdex and ARK 21Shares, raising questions about the future of ETH ETF approvals amidst reported investigations into ties between firms and the Ethereum Foundation, potentially impacting the classification of Ethereum as a security.
The SEC’s decision to delay VanEck’s application comes after it began approving investment products linked to Ether futures in October 2023, suggesting a growing acceptance of Ether as a commodity.
Bitcoin
Bitcoin’s price took a sharp tumble, dropping over 8% to under $62,000, with CoinDesk noting that it was the largest single-day decline since November of 2022 when FTX faced bankruptcy. This recent pullback amounts to a 15% decline from last week’s record highs of over $73,500.
The news outlet speculated that there are multiple factors tied to Bitcoin’s recent slide, including significant outflows from spot ETFs, with a record net outflow of $326 million on Tuesday. Grayscale’s ETF also witnessed a record outflow of $643 million on Monday. Economist An analyst identified excessive leverage, Ethereum’s influence on market sentiment, negative BTC ETF inflows, and the overextension of Solana’s market as key factors behind the crash, emphasizing the importance of funding and market dynamics.
Will this surplus in Bitcoin supply back on the market allow institutions to refill their bags? You can read more about this via our article below.
Interest rates
Reuters covered Federal Reserve Chair Jerome Powell’s statements after his policy meeting today. Powell emphasized that despite recent high inflation readings, the core narrative of gradually easing price pressures in the U.S. remains unchanged. However, Powell admitted that these readings haven’t boosted the central bank’s confidence in winning the battle against inflation. The decision to reduce rates will hinge on the Fed gaining more certainty that inflation can continue its downward trajectory towards the 2% target amid a resilient economy.
While the Fed kept rates unchanged and maintained the outlook for three rate cuts this year, it upgraded its projections for economic growth and predicted a slightly slower pace of inflation. The decision reflects officials’ cautious approach to rate cuts amid ongoing economic strength and job market growth. Despite the median policymaker anticipating rate cuts in 2025 and 2026, the Fed remains vigilant for further signs of inflation moderation before initiating any rate adjustments.
Regulation
U.S. Representative Patrick McHenry and Senator Cynthia Lummis suggest a stablecoin bill could progress through Congress this year, although no specific timeline is set. Despite advancements in the House, the Senate has yet to initiate committee work on the issue.
Reported by CoinDesk, McHenry, chair of the House Financial Services Committee, highlights ongoing efforts to finalize a stablecoin bill, emphasizing the need to navigate current congressional challenges. Meanwhile, Lummis emphasizes ongoing collaboration between Senate and House counterparts and anticipates a potential compromise bill, with Senate Majority Leader Chuck Schumer expressing openness to such legislation.
We hope you enjoyed our March 20, 2024 Genfinity News Recap! Come back tomorrow evening for another news summary and please leave a comment below.
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