Key Takeaways

• Bitcoin and Ether fell on Tuesday after strong increases last week.
• Ether rose last week amid optimism over the SEC’s approval for a spot ether ETF.
• The regulator has set the stage for spot ether ETFs through a rule change that allows the listing of such products, but it could be months before a spot ether ETF is available for trading.
• The US House of Representatives has passed a bill that will provide more clarity and divide regulatory jurisdiction for cryptocurrencies. The project faces the Senate and does not have the support of President Joe Biden.
• Former US President Donald Trump has doubled down on his endorsement of crypto, claiming he will pardon the convicted founder of darknet marketplace Silk Road.

After brief but sharp price jumps last week, bitcoin (Bitcoin) and ether (ETH) fell on Tuesday.

Bitcoin briefly fell below $68,000 after trading above $70,000 early last week. Meanwhile, ether is up around 25% in 24 hours amid optimism surrounding the approval of spot ether exchange-traded funds (ETFs). However, the increase was short-term despite the regulatory green light for the product.

Other big news included increasing mentions of crypto by US presidential candidates as they seek to woo voters, a UK judge’s scathing opinion on why Craig Wright’s claim to be bitcoin creator Satoshi Nakamoto doesn’t hold up, and a prison sentence for a former FTX executive.

Regulators Set the Stage for Spot Ether ETFs

On Thursday, the U.S. Securities and Exchange Commission (SEC) unexpectedly opened the way for spot ether ETF listing on US stock exchanges. Ether, the cryptocurrency that powers the Ethereum network, is the second largest cryptocurrency by market capitalization, behind only bitcoin.

Although the SEC’s decision marked a significant regulatory changethe listing of these ETFs by companies like BlackRock (BLACK), Grayscale and Fidelity could still be months away. Products must first receive approval for their S-1 Registration Fileswhich could take until July or August, according to Galaxy Digital.

If they receive final approval, a key question is whether ether ETFs will generate demand similar to the historic launch of spot bitcoin ETFs in the US, which have racked up around $13.5 billion in inflows, according to Farside Investors .

While some are optimistic about new listings attracting institutional and retail investors, others remain cautious, noting that the Ether market is smaller and less recognized than Bitcoin. Furthermore, the lack of access to staking for the ETF held in ETF presents a notable limitation for investors.

House changes on crypto regulation bill

The crypto industry scored a significant victory in Washington last week when the House of Representatives voted overwhelmingly in favor of the Financial Innovation and Technology for the 21st Century Act (FIT21).

The bill proposes to elevate the Commodity Futures Trading Commission (CFTC) as the primary overseer of digital assets, granting it sole authority over spot or spot markets for digital commodities, while the SEC would regulate digital assets with non-decentralized blockchains. . This clear division of regulatory responsibilities is what the crypto industry has long sought.

Despite the strong vote in the Chamber, by 279 votes to 136, the project faces a challenging path in the Senate, where approval is uncertain. President Joe Biden opposed FIT21, citing insufficient consumer and investor protections.

Former President Trump doubles down on crypto endorsement

In an attempt to appeal to libertarian voters and position himself as the pro-crypto candidate, Donald Trump called for a commutation of Ross Ulbrichtthe sentence. Ulbricht, the convicted operator of the Silk Road online marketplace, is serving a life sentence for running a platform where illegal drugs and other illicit items were purchased using bitcoin.

During a speech at the Libertarian party convention, Trump promised: “If you vote for me, on day one I will commute Ross Ulbricht’s sentence. He’s already served 11 years. We’re going to take him home.”

This move reflects Trump’s strategy to broaden his support base ahead of his rematch with President Joe Biden in November, seeking to neutralize the threat from third-party candidates such as Robert F. Kennedy Jr.

Trump’s public embrace of crypto is a major departure from his previous comments when he defended his strong preference for the US dollar over bitcoin.

Judge rules Craig Wright is a fraud

According to WIRED, a UK Supreme Court judge ruled that the computer scientist Craig Wright lied extensively and committed large-scale forgeries in an attempt to prove that he was Satoshi Nakamoto.

In a detailed judgment published on May 20, Judge James Mellor concluded that Wright fabricated numerous documents to support his false claims and used the courts to perpetrate fraud.

“I am entirely convinced that Dr. Wright extensively and repeatedly lied to the Court,” Mellor wrote.

This ruling marks the end of a six-week trial initiated by the Crypto Open Patent Alliance (COPA), which sought a declaration that Wright is not the creator of Bitcoin to prevent him from pursuing multiple lawsuits against Bitcoin developers and others. parties.

Despite Wright’s intention to appeal, his credibility was significantly damaged.

What to expect from the markets this week

Regulators and cryptocurrency market watchers will be keeping an eye on the fate of the FIT21 bill as it heads to the Senate.

Additionally, another former executive at the now-defunct cryptocurrency exchange FTX was convicted. The exchange’s Bahamian entity’s former co-CEO, Ryan Salame, received 90 months in prison for violations of campaign finance laws and conspiracy to operate an unlicensed money transmitter.

Tuesday also saw a big deal brewing. Bitcoin infrastructure company Riot Platforms (REBELLION) said it wants to acquire bitcoin mining company Bitfarms in a part-cash, part-stock deal. Riot’s tender offer is $2.30 per Bitfarm share, a 24% premium over the stock’s one-month volume-weighted average price on May 24, for a total equity value of $950 million . Riot already owns a 9.25% stake in Bitfarms and claims the deal would result in “the world’s largest publicly listed bitcoin mining company.”

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