Daily Market Update: May 20, 2024

May 20, 2024

BTC is currently trading around $68,000 and ETH around $3,100.  Notable gainers in the last 24 hours are WIF, THETA, and SUI. The global crypto market cap is $2.54T, up 0.3% over the last day.  DeFi Total Value Locked is ~$94b and BTC dominance is around 56%.

Equity markets are slightly higher today, ahead of a light week for economic data that features the FOMC meeting minutes on Wednesday and US PMIs on Thursday.  In addition, traders will closely watch earnings on Wednesday from Nvidia, the chipmaker and AI-bellwether that has seen its stock nearly doubled this year after tripling in 2023.

Meanwhile in crypto, the main event will be whether the SEC approves or denies VanEck’s and ArkInvest/21 Shares’s spot Ethereum ETF applications on Thursday and Friday, respectfully.  While such an approval would undoubtedly be an enormous positive catalyst for Ethereum and the crypto space as a whole, most ascribe very low odds of either application being approved this week as there has reportedly been little communication between the SEC and issuers, the SEC has received political pressure not to approve any additional digital asset ETFs, and the presence of the SEC’s investigation into ETH as a security likely complicates the matter.  Nevertheless, should the applications be denied, market participants will closely watch the reason for the rejection, with denial on the grounds that ETH is a security likely low odds, but also the most damaging.  And later, observers will watch whether any issuers file for a 19b-4 ETH futures ETF and whether litigation is initiated to potentially enable the same playbook that was used for the spot Bitcoin ETFs.

In addition to the SEC opining on the spot ETH ETF applications, many will also closely watch whether President Biden follows through on his promise to veto a measure overturning SAB 121, the SEC’s controversial crypto custody policy, this week.  Both the House of Representatives and Senate passed the measure, with the latter occurring on Thursday, and President Biden now has ten days to sign or veto it (in addition, Biden could abstain from signing, the SEC could remove SAB 121, or a pocket veto could occur).  Even with a veto, approval by both bodies of Congress demonstrates bipartisan support to protect investors and foster innovation, and the measure is helping to make crypto an increasingly important topic in politics.

Notable news includes: Venezuela banned crypto mining to protect the country’s power grid; bankrupt crypto lending company Genesis Global Holdco received court permission to return $3b to creditors; the full written judgment in Dr. Craig Wright vs. COPA was released; the US spot bitcoin ETFs saw ~$950m in inflows last week; Grayscale’s CEO Michael Sonnenshein stepped down; LayerZero temporarily paused reporting of suspected Sybils as part of its airdrop in order to tweak its design; MakerDAO’s founder unveiled two new stablecoins intended to eventually replace DAI; and, pump.fun identified the ex-employee that exploited the protocol.

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Brian Rudick, Senior Strategist | TwitterTelegramLinkedIn

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