5 Things to Know in Crypto Today: US Regulatory Activity Peaks

by Arthur · September 17, 2022

Table of Contents

Key insights:

Ethereum (ETH) is struggling below $1,500 in the wake of Thursday’s rally.
Regulatory talk heats up as the White House launches its first-ever crypto regulatory framework.
Sport keeps the metaverse and Web3 in the limelight, with Spain’s LaLiga in the metaverse.

Review after Ethereum Merger

On Thursday, the highly anticipated Ethereum (ETH) merger took place, and the crypto market responded in kind. As seen with previous network events, ETH took a bearish turn. Buy the rumor and sell the news proved true once again.

For the current week, ETH is down 18.8% to $1,435. While the US CPI report has contributed to the losses, ETH fell 12.5% Thursday to Friday as investors reacted to the consolidation.

ETHUSD 170922 daily chart

In contrast, the crypto market capitalization fell by 3.96%, Thursday to Friday, to $925.3 billion.

Ethereum was not the only victim of the merger. Since Thursday, ravencoin (RVN) is down 31.6%, with ethereum classic (ETC) down 13.5%.

For ETH holders, while the merger may have eliminated the carbon footprint issue, the move to a Proof-of-Stake (PoS) protocol puts ETH in the crosshairs of the SEC.

On Thursday, the SEC head reportedly spoke about staked crypto, saying that PoS coins could fall under the SEC’s purview.

However, Dogecoin (DOGE) appears to be a beneficiary of the merger by becoming the second largest Proof-of-Work protocol in the Post Merge era, behind bitcoin (BTC).

Celsius (CEL) is on the move in hopes of a new business

This morning, CEL is up 16.9% at $1.8899. While the US CPI report and consolidation have affected crypto appetite, CEL is up 20.5% for the current week.

Hopes of a business revival and repayment of client funds frozen before the Celsius bankruptcy has fueled demand. Over the weekend, Celsius applied for permission to sell stablecoin holdings to fund its operations. According to Reuters, Celsius will discuss the proposed sale in a hearing on October 6.

CELUSD 170922 daily chart

Biden administration launches new crypto framework

On Friday, the White House released the first-ever comprehensive framework for the responsible development of digital assets.

The first-ever comprehensive framework for the responsible development of digital assets looks set to provide a framework to protect consumers, investors and businesses and provide financial stability while taking into account national security and environmental concerns.

Part of the White House fact sheet that piqued market interest said:

“The reports urge regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in accordance with their mandates, to aggressively pursue investigations and enforcement actions against illegal practices in the digital asset space.”

Market reaction to Friday’s report was mixed. The broader crypto market recovered from session losses to end the day in positive territory.

Total market cap 170922 daily chart

As Fed fears subside, recession fears resurface

Late in the week, Fed fears subsided. Currently, the split between a 75 basis point rate hike and percentage point is 82% to 18% in favor of a 75 basis point increase. Prior to Thursday’s retail sales and Philly Fed numbers, the split had stood at 75% to 25% in favor of a 75% basis point increase.

FED betting on interest rate increases 170922

However, while Fed fears subsided, recession fears resurfaced in the wake of Thursday’s weak US economic indicators and the current inflation environment.

On Friday, the NASDAQ 100 fell 0.90%, ending the week down 5.77%. News that FedEx ( FDX ) withdrew its earnings forecasts, citing deteriorating market conditions, added to market anxiety.

The sports world is driving a pickup in Web3 activity

On the bright side, Web3 continues to develop, thanks mainly to the world of sports and large American conglomerates.

This week, Spanish soccer league LaLiga announced plans to develop land in the Vegas City district of Decentraland (MANA) in a bid to engage more closely with Gen Z fans. LaLiga has reportedly formed a new strategic partnership with StadioPlus to broadcast the league virtually.

LaLiga joins the likes of football giants Manchester City, who went metaverse earlier this year.