Bitcoin fell Thursday morning in Asia to trade around the US$27,500 mark, after briefly rising above US$28,000 on Wednesday as US inflation slowed. Liquidity is becoming a concern after major market makers Jane Street Group and Jump Crypto halted cryptocurrency trading in the US citing unfavorable regulations. Ether led the losers in the top 10 non-stable cryptocurrencies, while Pokadot led the winners. U.S. equity futures traded higher as inflation eased in April, adding to speculation that the Federal Reserve could suspend interest rate hikes in June.
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Bitcoin, Ether lose ground
Bitcoin fell 0.60% to US$27,554 in the 24 hours to 8:30 a.m. in Hong Kong, according to data from CoinMarketCap, registering a weekly loss of 5.24%.
The world’s largest cryptocurrency briefly breached the $28,000 cap on Wednesday as crypto markets rallied on a slower US inflation rate but quickly fell back on concerns over the network congestion and liquidity.
Jane Street Group and Jump Crypto, two top market makers, will quit digital asset trading in the US as regulators clamp down on the sector, according to a Bloomberg report citing unnamed sources.
“After the collapse of several crypto-friendly banks and FTX, it seems that the SEC (regulator) does not know which leg to stand on and it is certain that the position has become more hostile to cryptos and the whole of the financial and technical ecosystem that surrounds it,” Mikkel Morch, chairman and non-executive director of digital asset investment fund ARK36, said in an email.
As of 8:30 a.m. in Hong Kong, investors liquidated $41.28 million in bitcoin positions, nearly 75% of which were long positions — or bets that the price of bitcoin would rise, according to market data tracker CryptoMeter. io.
Ether fell 0.84% to US$1,837, down 3.49% for the week. The token approached US$1,900 on Wednesday before falling back to US$1,795.
The other top 10 non-stable cryptocurrencies traded mixed, with Polkadot’s Dot token leading the gainer with a 1.91% gain to $5.45. However, it is down 5.43% for the week. Web3 Foundation, the organization behind the Polygon blockchain, testified before the US Congress on the regulation of digital assets on Wednesday, calling for clearer rules of conduct.
The total crypto market cap fell 0.30% in the past 24 hours to US$1.14 trillion. Total trade volume increased by 43.61% to $45.84 billion.
Drop in the NFT index
Indices are indirect measures of the performance of the global NFT market. They are operated by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.
In the non-fungible token (NFT) market, the Forkast 500 NFT Index fell 0.67% to 3,440.57 in the 24 hours at 10:00 a.m. in Hong Kong, losing 6.15% for the week.
Milady Maker, an Ethereum-based NFT collection, topped 24-hour sales in the market after Twitter and Tesla CEO Elon Musk tweeted Wednesday an image containing the NFT.
Sales of Milady Maker totaled more than US$9.54 million in the past 24 hours, an increase of more than 3,700%, according to data from CryptoSlam, with its floor price jumping 38.4% to 4.69 ETH (US$8,609), according to CoinGecko.
Boosted by the rise of Milady Maker, NFT sales on the Ethereum blockchain jumped 89.41% in the past 24 hours to $34.25 million, according to CryptoSlam. Average transaction fees on Ethereum were $19.70 on Wednesday, down from its 11-month high of $27.68 on Saturday, according to blockchain data platform BitInfoCharts.
Stock futures rise as inflation slows
US equity futures rose from 11:00 a.m. in Hong Kong. Dow Jones Industrial Average futures edged up 0.04%. S&P 500 futures gained 0.19%. And Nasdaq Composite futures added 0.16%.
All three U.S. indices closed mixed in regular trading on Wednesday as investors digested the U.S. Consumer Price Index report which showed annual inflation unexpectedly slowed to 4.9% in April versus 5% in March, the slowest pace in the past two years. The moderate cooling in inflation indicates that the Federal Reserve may take a break from its more than a year cycle of raising rates to slow inflation.
On talks to raise the US debt ceiling to maintain government solvency, President Joe Biden warned on Wednesday that a federal government default could trigger a global recession, according to a Bloomberg report. Biden is expected to continue talks to raise the debt ceiling on Friday, with congressional Republicans demanding more budget cuts in any deal.
On other data releases, the U.S. Producer Price Index and Unemployment Insurance Claims are released Thursday to offer fresh insights into the health of the economy.
The Federal Reserve will meet on June 14 to decide its next move on interest rates, which are now between 5 and 5.25%, the highest since 2006. The CME tool FedWatch predicts a probability of 96, 1% that the Fed will keep rates unchanged in June, and a 3.9% chance for another 25 basis point rate hike, up from 21.2% on Wednesday.
(Updates with the equity section.)
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