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Market Highlights
- As part of reaching a deal on the U.S. debt ceiling on Sunday, U.S. Congressman Warren Davidson revealed the exclusion of the Digital Asset Mining Energy (DAME) excise tax which would levy a 30% charge on cryptocurrency mining firms.
- The SEC sues crypto exchange Binance and CEO Changpeng Zhao (CZ), alleging multiple securities violations
- Sportswear giant Nike and game manufacturer EA Sports have partnered up to release digital collectibles featuring Nike-branded gear, which will be incorporated into upcoming EA games.
- Hong Kong and the United Arab Emirates have announced plans to enhance cooperation and information sharing regarding crypto regulations in an attempt to establish a framework that ensures the proper supervision and oversight of crypto.
Price Movements
Bitcoin
Bitcoin (BTC) has fallen back into a slumber as it spent the majority of the week range-bound, trading between US$27,000 and US$28,000. On Wednesday, BTC slipped 2.3% after president of the Cleveland Fed, Loretta Mester opposed the idea of foregoing an interest rate raise in June, stating "I don't really see a compelling reason to pause,” in an interview published by the Financial Times that day. This alongside the news of the SEC suing crypto exchange, Binance brought fear back into the market and pushed BTC below US$26,000.
As such, BTC closed the week at US$25,719, down to 7.0% over the last seven days.
Ethereum
Ethereum (ETH) also slid on Wednesday in response to Mester’s statements against a rate hike pause, falling to a low of US$1,840 on Thursday. However, investors took the opportunity to buy at these price levels as ETH made a full recovery the following night. Unfortunately, the news of Binance being sued broke this momentum as ETH closed the week at US$1,807, down 4.4%.
Despite being down against the dollar, ETH has continued its rally against BTC for the 5th week running. The ETH/BTC ratio climbed steadily from ~0.0683 to ~0.0703 this week, marking a weekly gain of 2.9%.
Altcoins
Market sector performances were a mixed bag this week however stayed within 2.5% from last week’s prices. Currencies and GameFi added 2.5% and 1.5% respectively while Web3 took the largest hit, shedding 2.2% over the last seven days.
Currencies was led by XRP (XRP) once again as it gained 5.0% week-on-week. Investors are positioning themselves ahead of Hinman’s speech documents unsealing scheduled for June 13. The documents contain notes and emails in preparation for the speech given by former SEC Director William Hinman expressing his then view on why he believed that the offer and sales of Ether were not securities transactions
Terra Classic (LUNC) and XDC Network (XDC) also secured a spot in this week’s top performers with each increasing by 5.5% and 6.1%, respectively. LUNC’s resurgence follows the news of the v2.1.0 upgrade proposal, which aims to align Terra Classic with other blockchains, including Terra 2.0 and various Cosmos chains. XDC pumped on the news of its new partnership with SBI VC Trade Co. Ltd., a prominent Japanese cryptocurrency exchange.
In Other News
30% Bitcoin Mining Tax Scrapped?
As the details of the agreement between President Joe Biden and House Speaker Kevin McCarthy on the U.S. debt ceiling was revealed on Sunday, one part of the deal seems to have prevented some taxes suggested by the Biden administration, such as the Digital Asset Mining Energy (DAME) excise tax. If passed, this tax aimed to levy a 30% charge on cryptocurrency mining firms.
On Monday, Pierre Rochard, VP of Research at Riot Platforms questioned U.S. Congressman, Warren Davidson whether the Administration's DAME excise tax proposal was gone given that Bitcoin mining wasn't mentioned in the text of the bill. Davidson responded with "Yes, one of the victories is blocking proposed taxes."
SEC Sues Binance and its CEO
On Monday, the U.S. Securities and Exchange Commission filed a lawsuit against Binance, the operating company for Binance.US, and Binance CEO Changpeng "CZ" Zhao, alleging multiple violations of federal securities laws.
EA Sports to Bring Nike Digital Collectables in New Partnership
On Thursday, prominent sportswear company and Web3 powerhouse, Nike, announced its partnership with video game manufacturer, EA Sports. The collaboration involves the creation of digital collectibles featuring Nike-branded gear, which will be incorporated into upcoming EA games. These collectibles will be made available through Nike's Web3 platform called ".Swoosh," and will aim to build new immersive experiences with an emphasis on customisation.
Regulatory
Hong Kong and UAE Central Banks Coordinate on Crypto Regulations
Hong Kong and the United Arab Emirates (UAE) announced plans to work together to regulate digital assets. The two central banks have signed a Memorandum of Understanding (MoU) to enhance cooperation and information sharing regarding crypto regulations.
The aim is to establish a framework that ensures the proper supervision and oversight of cryptocurrency activities while addressing potential risks such as money laundering and terrorist financing. This collaboration reflects a growing trend among global regulators to work together in formulating comprehensive regulatory frameworks for the crypto industry and may open up the possibility of central bank digital currencies (CBDCs) being used.
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