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May 31, 2023
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News for Crypto World – AllCrypto.biz portal, your one-stop destination for the latest news, analysis, and insights from the world of cryptocurrency.

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Popular News

1

Synthetix (SNX) trading volume overtakes GMX, but is the DEX token rally sustainable?

  • Markets
2

Bitcoin nears $27K despite ‘hot’ PCE data sparking June rate hike bets

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3

Bitcoin ‘buys the rumor’ on US debt ceiling as BTC price nears $27.5K

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4

2 more rate hikes? Bitcoin analyst counts down to ‘huge’ volatility

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5

Bitcoin dips 5% to key support in ‘moment of truth’ for crypto market

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6

Ethereum is ‘woefully undervalued’ but growing more powerful: DeFi Dad, Hall of Flame

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7

Longing for liquidity — 5 things to know in Bitcoin this week

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8

These 4 altcoins could be ready for an up-move if Bitcoin rallies above $27,500

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9

$160K at next halving? Model counts down to new Bitcoin all-time high

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10

Bitcoin price capitulation below $26K possible as Friday’s BTC options expiry looms

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11

Bitcoin flips volatile at $27K as Fed’s Powell teases end to rate hikes

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12

Ordinals turned Bitcoin into a worse version of Ethereum: Can we fix it?

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13

How much is Bitcoin worth today?

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14

Sink or swim at $27K? 5 things to know in Bitcoin this week

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15

Bitcoin price retests key support as Fed rate hike fears steal $27K

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16

‘One of the greatest’ Bitcoin metrics says BTC price bull run is here

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17

Bitcoin offers ‘good signs’ as analysts retain $40K BTC price target

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18

3 reasons why Ethereum price could struggle at the $1.9K level

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19

BTC price bounces at $25.8K lows amid warning over low whale interest

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20

Bitcoin price hits $27.2K, but new analysis warns more losses ‘likely’

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21

‘Don’t short when it’s dark green’ — How to trade the 2024 Bitcoin halving

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22

The Ethereum Foundation just sold $30M in Ether — But will ETH price fall this time?

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23

Coinbase screws up, Florida bans CBDCs, and Ordinals face controversy: Hodler’s Digest, May 7-13

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24

BTC price risks $27K loss as Bitcoin trend lines brew ‘bullish cross’

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25

Bitcoin bears need BTC price to go below $27K ahead of Friday's $900M options expiry

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26

Ethereum derivatives flirting with bearishness: Mind the $1,820 support

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27

Alameda’s $38B IRS bill, Do Kwon kicked in the assets, Milady frenzy: Asia Express

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28

Joe Lubin: The truth about ETH founders split and ‘Crypto Google’

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29

Does Bitcoin price risk losing $28K with BTC futures premium at 2-month lows?

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30

3 signs PEPE token is about to trap bulls after 2,000% price rally

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31

Bitcoin miners have earned $50B from BTC block rewards, fees since 2010

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32

Bitcoin eyes liquidity above $30K as gold hits new all-time high

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33

Bitcoin trader eyes $63K BTC price for new Bollinger Bands ‘breakout’

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34

Ethereum price outlook weakens, but ETH derivatives suggest $1.6K is unlikely

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35

Bitcoin limps into FOMC as flagging volume adds to BTC price hurdles

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36

Bitcoin drops with stocks as analyst warns of banking crisis ‘endgame’

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37

BTC price may need a $24.4K dip as Bitcoin speculators stay in profit

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38

Bitcoin sell-off next? Binance BTC balance shoots up $1.5B in 1 month

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39

Bitcoin miners earned $50B from BTC block rewards, fees since 2010

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40

Will $28K Bitcoin price hold? Two indicators remain solid despite 5% pullback

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41

China’s wave of ChatGPT rivals, Alibaba goes multichain: Asia Express

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42

‘Good luck bears’ — Bitcoin traders closely watch April close with BTC price at $29K

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43

Shirtless shitposting and hunting SBF on the meme streets: Gabriel Haines, Hall of Flame

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44

Got liquidated with Bitcoin futures? Get 3.5x leverage using this options strategy

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45

Bitcoin ignores US jobs data as BTC price dip puts $28K support at risk

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46

Whatever happened to EOS? Community shoots for unlikely comeback

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47

Dogecoin soared 23,000% in 2021 — Is history starting to repeat for DOGE price?

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48

Bitcoin price struggles to hold above $30K amid regulatory uncertainty

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49

Ether price struggles to maintain support as regulatory challenges and network issues weigh

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50

Bitcoin price can ‘easily’ hit $20K in next 4 months — Philip Swift

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51

Bitcoin price holding $27K could open buying opportunities in BNB, ADA, XMR and TON

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52

Ethereum price lower highs vs. Bitcoin hint at more downside in April

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53

Dogecoin price limps below a key support after Dogeday turns into a sell-the-news event

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54

BTC price dives 3% in minutes as ‘deep correction’ grips crypto market

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55

Bitcoin at key point with BTC price at $28.8K — Bollinger Bands creator

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56

From SNL and The Tonight Show to Sotheby’s:  NFT Creator Bryan Brinkman

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57

Bitcoin on-chain data highlights the steps BTC is taking to exit the bear market

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58

Ethereum on-chain data forecasts the withdrawal of 1.4M ETH over the next few days

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59

Bitcoin price spikes above $31K as Ethereum gains spark ‘altseason’ calls

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60

Can Ethereum crack $2K? ETH price inches closer despite new unlocked supply

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61

What Bitcoin bear market? BTC price closely copying old halving cycles

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62

Ronin (RON) bags a 500% gain as the gaming-focused project approaches a major upgrade

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63

3 signs Arbitrum price is poised for a new record high in Q2

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64

Bitcoin derivatives data shows bulls positioning for further BTC price upside

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65

Bitcoin glory on Chinese TikTok, 30M mainland users, Justin Sun saga: Asia Express

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66

BTC price targets see $33K next as Bitcoin eyes key resistance flip

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67

Ethereum price metrics hint that ETH might not sell-off after the Shapella hard fork

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68

Bitcoin price sets up for an explosive move as ADA, XLM, AAVE and CFX turn bullish

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69

‘Pop or drop?’ Bitcoin analysts decide if BTC price will beat $30K

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70

Bitcoin whales push ‘choreographed’ BTC price as Ether nears $2K

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71

NFT Creator, The Sarah Show: Analog childhood meets dizzying digital future

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72

Bitcoin rests at $28K as US jobs data boosts new Fed rate hike bets

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73

BTC white paper hidden on macOS, Binance loses AUS license and DOGE news: Hodler’s Digest, April 2-8

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74

XRP price eyes 30% upside after key resistance area breaks

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75

3 key Ethereum price metrics cast doubt on the strength of ETH’s recent rally

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76

Bitcoin traders expect ‘big move’ next as BTC price flatlines at $28K

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77

Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s

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78

Ethereum price turns bullish ahead of next week’s Shanghai and Capella upgrades

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79

Arbitrum FUD spooks the market, but on-chain data shows whales accumulating ARB

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80

Zhu Su’s exchange did $13.64 in volume akshually, Huobi in crisis: Asia Express

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81

Crypto security audits and bug bounties are broken: Here’s how to fix them

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82

Trader Joe joins top 5 DEX list as Liquidity Book model thrives on Arbitrum

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83

Crypto market momentum stalls as traders await the results of recent regulatory actions

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84

Bitcoin price turns $28K to support, opening the door for ETH, MATIC, HBAR and EOS to breakout

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85

Binance-CFTC FUD puts BNB price at risk of dropping toward $200

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86

XRP price: 'sell the news' moment nears after crypto-leading 20% weekly gain

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87

XRP price tags 10-month high — Can a 35% pullback be avoided?

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88

Solana overcomes FTX fiasco — SOL price gains 100% in Q1

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89

Why did 12K Bitcoin margin longs close at Bitfinex, and why didn’t it impact BTC price?

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90

Analysts debate the ETH price outcomes of Ethereum’s upcoming Shapella upgrade

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91

Bitcoin price holds its ground in the wake of CFTC case against Binance

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92

Bitcoin spikes above $29K as ‘fakeout’ fuels BTC price strength doubts

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93

ARB price to $2? Ethereum L2 rival Arbitrum will double in April, fractal suggests

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94

Elon Musk slams ‘heavy-handed’ Fed as ex-BitMEX CEO sees $1M BTC price

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95

Crypto market rally stalls at the $1.2T level, but bulls are getting positioned

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96

Bitcoin price will hit this key level before $30K, survey says

  • Markets
97

Why is Cardano price up today?

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98

Bitcoin erases Fed losses as traders eye $40K BTC price target

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99

Bitcoin is 1 week away from 'confirming' new bull market — analyst

  • Markets
100

Bitcoin liquidations vanish as trader hopes $30K will hit before dip

  • Markets
101

Ethereum faces 6-month lows versus Bitcoin — Will ETH price rebound?

  • Markets
102

Arbitrum’s ARB token signifies the start of airdrop season — Here are 5 to look out for

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103

Bitcoin bulls remain bullish, but macro and crypto-specific hurdles have BTC pinned below $30K

  • Markets
104

Ethereum price at $1.4K was a bargain, and a rally toward $2K looks like the next step

  • Markets
105

Bitcoin rejects at $25K as US PPI data meets Credit Suisse meltdown

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106

Speculators flock to Arbitrum IOU tokens ahead of this week’s ARB airdrop

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107

Investors shelter in short-term Treasurys, reducing Bitcoin’s chance of rallying to $30K

  • Markets
108

Will the Fed stop rate hikes? 5 things to know in Bitcoin this week

  • Markets
109

Bitcoin levels to watch as BTC price eyes highest weekly close in 9 months

  • Markets
110

Bitcoin price hits $27K in new 9-month high as Fed injects $300B

  • Markets
111

Bitcoin market cap grows 60% in 2023 as top Wall Street banks lose $100B

  • Markets
112

Ethereum price reaches lowest level relative to Bitcoin in 5 months

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113

Bitcoin dominance nears 50% as research hails ‘bullish’ narrative flip

  • Markets
114

4 signs the Bitcoin price rally could top out at $26K for now

  • Markets
115

Lark Davis on fighting social media storms, and why he’s an ETH bull: Hall of Flame

  • Markets
116

Why is Ethereum (ETH) price down today?

  • Markets
117

US bank bloodbath: Bitcoin hits $23.7K as BTC price analyst calls SVB dip ‘bear trap’

  • Markets
118

Dogecoin hits 4-month lows vs. Bitcoin — 50% DOGE price rebound now in play

  • Markets
119

Bitcoin price spikes to ‘$26K’ in USDC terms — How high can the BTC short squeeze go?

  • Markets
120

Fed starts ‘stealth QE’ — 5 things to know in Bitcoin this week

  • Markets
121

Why is XRP price up today?

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122

Why is Ethereum (ETH) price up today?

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123

Bitcoin battles $20K as trader calls bank chaos ‘2008 all over again’

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124

Cathie Wood’s ARK ignores Silvergate, buys Coinbase stock for 6th straight month

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125

Ethereum price action and derivatives data confirm bears are currently in control

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126

$920B is the number to watch now that crypto’s trillion-dollar total market cap is gone

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127

Warning sign for ETH price? Ethereum volume profile is down 90% since March 2020

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128

Bitcoin keeps liquidating longs as BTC price action gives up $22K support

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129

Bitcoin price levels to watch as trader says ‘lights out’ below $21.6K

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130

Bitcoin price would retest $25K without Silvergate saga — analysis

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131

Bitcoin price faces ‘last stand’ as weekly close threatens $22K retest

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132

Ethereum eyes 25% correction in March, but ETH price bulls have a silver lining

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133

Bitcoin price stumbles amid investors’ aversion to risk assets, but there is a silver lining

  • Markets
134

Ethereum price resistance at $1,750 could reflect traders’ anxiety over the Shanghai upgrade

  • Markets
135

Fears over Silvergate, $8B hole at FTX, senators seek Binance’s numbers: Hodler’s Digest, Feb. 26 – March 4

  • Markets
136

$3M OKX airdrop, 1-hour due diligence on 3AC, Binance AI — Asia Express

  • Markets
137

Bitcoin’s least volatile month ever? BTC price ends February up 0.03%

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138

Bitcoin on-chain data highlights key similarities between the 2019 and 2023 BTC price rally

  • Markets
139

Bitcoin ‘millionaires’ increased 140% as BTC price crossed $20K — data

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140

Here’s why STX, CFX, SSV, AGIX and GRT are the top performing assets in February

  • Markets
141

Bitcoin may only need 4 weeks to hit $30K as key monthly close looms

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142

SBF’s new charges, Shapella’s fork date and emojis as financial advice: Hodler’s Digest, Feb. 19-25

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143

THETA, LIDO, KLAY and EGLD flash bullish signs as Bitcoin recaptures $23K

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144

Bitcoin price eyes $24K retest as US dollar dives into monthly close

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145

BTC whale population shrinks to early 2020 levels — 5 things to know in Bitcoin this week

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146

How Fantom and Optimism’s DeFi and DApp development directly affects FTM and OP price action

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147

Bitcoin price tumbles to 10-day lows as ‘Notorious B.I.D.’ keeps support at $22.5K

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148

Bitcoin price stays under $24K as PCE data helps US dollar to near 7-week highs

  • Markets
149

Bitcoin regains $25K amid hope record China easing will boost BTC price

  • Markets
150

Why is Bitcoin price down today?

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151

Ethereum derivatives data suggests $1,700 might not remain a resistance level for long

  • Markets
152

Bitcoin sees fresh $25K rejection as pre-Wall Street volatility returns

  • Markets
153

'Stupid money' Ether investor loses over $2M in six months — 3 lessons to learn

  • Markets
154

Bitcoin price continues to fall, but derivatives data hints at a short-term rally to $25K

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155

Bitcoin bears attempt to pin BTC price under $23K ahead of this month’s options expiry

  • Markets
156

A ‘snap back’ to $20K? 5 things to know in Bitcoin this week

  • Markets
157

Bitcoin must leverage $1T central bank liquidity to beat sellers — Research

  • Markets
158

Bitcoin can hit $40K before BTC price sees ‘harsh correction’ — Analyst

  • Markets
159

Bitcoin Lightning Network growth is organic, coming from real-world adoption

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160

Bitcoin bulls aim to hold this week’s BTC gains leading into Friday’s $675M options expiry

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161

Bitcoin metric prints ‘mother of all BTC bullish signals’ for 4th time ever

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162

China’s only public blockchain, Conflux, sees CFX price skyrocket 1,300% in 2023

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163

Polygon ecosystem development and upcoming zkEVM launch add to MATIC’s bullish momentum

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164

BTC price cools on latest US data as Bitcoin liquidates $80M in shorts

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165

Bitcoin levels to watch as BTC price rejects at key $25K trendline

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166

First weekly death cross ever — 5 things to know in Bitcoin this week

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167

Bitcoin eyeing ‘next big move’ which could see $19K retest — analyst

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168

ApeCoin leads in NFT and metaverse market share, but are APE’s hefty staking rewards sustainable?

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169

Bitcoin flirts with bid liquidity as BTC price nears new 3-week lows

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170

Ethereum price prints ‘death cross’ after losing 13% versus Bitcoin from 2023 peak

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171

Bitcoin price derivatives look a bit overheated, but data suggests bears are outnumbered

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172

Bitcoin price rally to $25K followed by total crypto market cap retest of the $1.13T resistance

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173

NFT marketplace tokens soar in 2023, and Blurs recent airdrop may extend the trend

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174

Bitcoin price targets range from $19K to $25K as CPI day dawns

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175

Bitcoin bulls aim to hold this weeks BTC gains leading into Fridays $675M options expiry

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176

Tether market cap nears $70B as SEC crypto crackdown hurts stablecoin rivals

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177

MATIC, HBAR, LDO and BIT gather strength as Bitcoin price rebounds

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178

Bitcoiner Simon Dixon on bankruptcies and Elon Musk: Hall of Flame

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179

3 reasons why Binances BNB token risks sliding further by March

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180

Ethereum on-chain data suggests ETH sell pressure could be a non-event after the Shanghai upgrade

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181

SEC enforcement action creates a silver lining for GMX, Lido (LDO) and Maker (MKR) price

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182

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183

Bitcoin price eyes $22K rebound with BTC market structure not yet broken

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184

Bitcoin price clings to $22K as investors digest the recent SEC actions and CPI report

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Why is Bitcoin price up today?

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186

Krakens staking down, FTX post-bankruptcy hell and Binance news: Hodlers Digest, Feb. 5-11

  • Markets
  • Crypto

Crypto regulation: Does SEC Chair Gary Gensler have the final say?

1 month ago25 mins

In a February interview with New York Magazine, Gary Gensler, chairman of the United States Securities and Exchange Commission, said that just about every crypto transaction, with the exception of Bitcoin spot transactions and buying or selling things with cryptocurrency, falls within the jurisdiction of the SEC. 

In the interview, when discussing what types of crypto transactions should be regulated as securities, Gensler didn’t mince words. “Everything other than Bitcoin. You can find a website, you can find a group of entrepreneurs, they might set up their legal entities in a tax haven offshore, they might have a foundation, they might lawyer it up to try to arbitrage and make it hard jurisdictionally or so forth,” Gensler said. 

Gensler continued, “They might drop their tokens overseas at first and contend or pretend that it’s going to take six months before they come back to the U.S., but at the core, these tokens are securities because there’s a group in the middle and the public is anticipating profits based on that group.” 

Gensler contends that the SEC’s jurisdiction over most cryptocurrencies is based on a 1946 Supreme Court ruling in the case SEC v. W.J. Howey Co. According to Investopedia, the W.J. Howey Co. sold citrus groves to Florida buyers. Those buyers would lease the groves back to the company. The company cultivated the trees and sold the oranges on behalf of the Florida buyers. Both would share in the profits. W.J. Howey Co. subsequently failed to register with the SEC, arguing that its transactions were not investment contracts. 

Midwinter scene, Traveling through an orange grove
(State Library and Archives of Florida, Public domain, via Wikimedia Commons)

W.J. Howey Co. lost the case when the court ruled that the leaseback arrangements were investment contracts, thus establishing the Howey test wherein four criteria are used to determine whether something constitutes an investment contract: An investment of money, in a common enterprise, with the expectation of profit, to be derived from the efforts of others.

Is Gensler right that most cryptocurrencies meet the Howey test?

Mark Bini, an attorney at Reed Smith, says “no.” Bini is a former state and federal prosecutor who now represents corporations and individuals facing civil and criminal charges of crypto fraud, securities fraud and other crimes.

“I think that the Howey test is not clear, and using this 1946 case about orange groves to decide whether a crypto is a security or not […] I’m not sure that they don’t need to update that,” Bini says. He also finds it surprising that a stablecoin pegged to the U.S. dollar might qualify as a security under the rule since there is no expectation of profit. 

Bini asks, “Would Chairman Gensler say, if the United States launched a digital currency, as they’ve at least thought about doing, let’s say that there was a crypto that was a pure digital dollar, would that be a security?”

Official portrait of SEC Chairman Gary Gensler
Official portrait of SEC Chairman Gary Gensler. (SEC)

Congresspeople Jesús García and Stephen Lynch agree with Gensler. In a recent opinion piece for The Hill, they argue that participants in the crypto ecosystem must “come into compliance with existing securities laws.” 

The lawmakers wrote, “According to the SEC Chair Gary Gensler and recent court decisions, the vast majority of crypto assets are securities because they meet the Howey Test […] An investment contract exists when money is invested in a common enterprise with the expectation of profit resulting from the work of others. We agree with Chair Gensler that nothing about the crypto markets is incompatible with the securities laws.”

With all the media coverage of Gensler’s recent statements, many in the crypto community might think that this is a new position for Gensler. Kevin Werbach, a professor at the University of Pennsylvania who leads the Wharton Blockchain and Digital Asset Project, tells Magazine otherwise. 

“Both Chair Gensler and his predecessor, Jay Clayton, have repeatedly stated that the vast majority of digital assets are issued and purchased primarily for investment purposes and should be treated as securities,” says Werbach. 

Werbach continues, “There are tens or hundreds of thousands of tokens out there — anyone can create one. The real issue relates to the projects that accumulated significant capital through the issuance of tokens. I think it’s fair to say that most of them would meet the Howey test in that issuance process […] But what does that mean today for ongoing trading and use of the tokens?” 

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Is the SEC regulating by enforcement?

On July 21, the SEC charged Ishan Wahi, a former Coinbase product manager, with insider trading, in addition to Wahi’s brother Nikhil and his friend Sameer Ramani.

From June 2021 to April 2022, Wahi allegedly shared confidential Coinbase information with Nikhil and Ramani, including upcoming token listing announcements. Nikhil and Ramani subsequently purchased and sold 25 crypto assets, at least nine of which, the SEC alleges, were securities. Profits accumulated in the scheme exceeded $1.1 million. 

According to Bini, the crypto community has long claimed that the SEC has been regulating by enforcement, and in this case, the SEC determined what tokens were securities and subsequently charged the defendants with a crime based on those decisions.

On the same day that the SEC and the U.S. Department of Justice announced Wahi’s indictment, Commodity and Futures Trading Commissioner Caroline Pham released a statement lamenting SEC overreach. In her statement, Pham quoted the Federalist Papers, a document published over 200 years ago that focused on counterbalancing branches of government.

Pham also said, “The case SEC v. Wahi is a striking example of regulation by enforcement. The SEC complaint alleges that dozens of digital assets, including those that could be described as utility tokens and/or certain tokens relating to decentralized autonomous organizations (DAOs), are securities.” 

Regarding the commissioner’s statement, Bini comments, “Pham really said, ‘Hey, you’ve overstepped here because there has been no action by Congress.’” 

When asked if the SEC has been regulating through enforcement, as opposed to rulemaking, Werbach tells Magazine, “The securities laws are designed to be technology neutral, so there doesn’t necessarily have to be a rulemaking to determine how they apply to different situations involving digital assets. If the SEC did proceed with rulemaking — there are so many aspects to the digital asset world, and things change so quickly — that many decisions would need to be addressed through adjudication and enforcement.”

Werbach notes two challenges with the SEC’s enforcement strategy: “First, it’s sometimes hard to find consistency in the remedies and the choice of targets. Second, the agency has been reluctant to provide guidance, no action letters, or other paths to separate legitimate from non-compliant firms.” 

Although debate continues about the SEC’s approach to enforcement, there is no doubt that the agency has beefed up resources. In May 2022, the SEC announced that it had added 20 positions to its Crypto Assets Unit, a department responsible for investor protection and cyber-related threats. According to the statement, the unit is part of the Division of Enforcement and will grow to 50 positions. 

Today we announced that we’re bolstering the unit responsible for protecting investors in crypto markets & from cyber-related threats. The newly renamed Crypto Assets & Cyber Unit in the Division of Enforcement will grow to 50 dedicated positions.

— U.S. Securities and Exchange Commission (@SECGov) May 3, 2022

The SEC says the unit was established in 2017 and has brought more than 80 enforcement actions resulting in monetary relief exceeding $2 billion, and it will focus on investigating securities violations related to crypto asset offerings and exchanges, lending and staking protocols, decentralized finance platforms, nonfungible tokens and stablecoins.

Gensler believes that it’s all about protecting investors

When asked in his interview if a consumer-facing agency like the SEC is actively trying to discourage retail investors from participating in the crypto sector by delegitimizing crypto institutions, Gensler argued that his primary responsibility is investor protection. 

Gensler said, “I’m in a job where I’m supposed to be merit neutral in terms of what risk investors want to take, but not neutral towards the investor protection — the full, fair, and truthful disclosure you get when you’re investing in a security.”

Investors in the crypto markets are putting their assets at risk in a highly speculative asset class. Today, investors in these markets lack fundamental disclosures—about crypto assets, & about the firms who execute their trades.

Read last week’s @SEC_Investor_Ed alert:

— Gary Gensler (@GaryGensler) March 27, 2023

García and Lynch concurred, writing, “We agree with Chair Gensler that nothing about the crypto markets is incompatible with the securities laws and that investor protection is just as relevant, regardless of underlying technologies.” 

The two members of Congress take it a step further arguing that existing security laws would force cryptocurrency exchanges, like FTX and others that lack corporate controls, “into compliance” and would protect investors from “bad actors.” 

Bini thinks that the SEC does have a role when it comes to protecting investors, including those in the crypto space, it’s just that Gensler doesn’t have the authority to determine his own jurisdiction on the matter. “I understand the SEC’s mission is to protect investors. That’s a very important mission, no doubt about it […] I think the criticism by the crypto communities is [Gensler] cannot by his own fiat just decide his jurisdiction.”

As bad as Wall Street

Lynch and García argue that if crypto companies complied with existing securities laws, they wouldn’t be able to launder money, misuse customer funds, and engage in other nefarious behaviors. 

The lawmakers wrote, “​​The crypto industry is notorious for attempting to obscure the law by using the courts to challenge attempts at regulation and lobbying for regulatory carve outs that benefit them at the expense of everyday people.” 

García and Lynch cited a recent report from Reuters that alleges Binance, among other transgressions, lobbied the U.S. Department of Justice to try to sidestep enforcement. The CFTC recently sued the exchange’s CEO, Changpeng Zhao, for violations of the Commodity Exchange Act and CFTC regulations. 

Today @CFTCjohnson released a statement in support of the CFTC complaint alleging Binance, affiliated entities, and senior management violated the Commodity Exchange Act and evaded U.S. regulation. Read it here: https://t.co/oi5gTadbBs

— CFTC (@CFTC) March 27, 2023

Although they expand the argument beyond a defense of Gesler and the SEC’s actions, they point out that FTX and other crypto stakeholders have “replicated the worst tendencies of Wall Street and Big Tech,” have “recreated many elements of the 2008 financial crisis,” “have subjected investors to incredible volatility,” and have “preyed on consumers.” 

“Policymakers must protect our economy from bad actors by urging the crypto industry to comply with existing laws, invest in solutions that are truly innovative, and create a more inclusive financial system,” they wrote.

What about legislation?

Federal legislation would certainly create guardrails around the SEC and would help determine what federal agencies are tasked with regulating different types of cryptocurrencies. 

Werbach says, “There are some areas, such as the treatment of stablecoins, where there simply isn’t an appropriate existing federal framework, and there are important tax issues that will likely need legislative resolution. The CFTC needs greater legislative authority over spot markets in digital assets. With regard to securities regulation, the SEC could provide more guidance without legislation, but it has declined to do so.”

Bini believes that effective legislation, like a stablecoin bill currently pending in Congress, would make investors feel more confident. 

“It’s unfortunate that there hasn’t been a clear framework by the United States because I think it’s going to provide clarity to the industry. People who want to put money in crypto feel more confident if they feel like there’s a clear framework and that they’re being protected, whether it’s the SEC or the CFTC, or if Congress came up with some new agency that was going to oversee crypto,” says Bini.

Bini adds, “I don’t think that it’s up to him [Gensler] to decide where the SEC reaches in — that should be up to Congress.”

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Maybe the courts will decide

Since the Howey test, a precedent established by a court decision, is the current method of determining whether something is a security, is it possible that the courts could set a similar precedent for cryptocurrency?

According to Bini, the answer is maybe, perhaps out of the Ripple case that’s playing out in the Southern District of New York. Bini says “that in the absence of Congressional action, you could have a landmark case like this one appealed to the Second Circuit, and then the Supreme Court, and that may provide clarity.”

In December 2020, the SEC filed an action against Ripple Labs alleging that the company and two of its executives raised over $1.3 billion in an unregistered, ongoing securities offering. 

Ripple CEO Bradley Garlinghouse was also charged by the SEC. TechCrunch, CC BY 2.0
Ripple CEO Bradley Garlinghouse was also charged by the SEC. TechCrunch, CC BY 2.0. (Wikimedia Commons)

Last year, the judge in the Ripple case agreed to consider the fair notice defense, a protection derived from the Due Process Clause in the U.S. Constitution that guarantees a defendant be given fair notice of what constitutes an offense. 

The SEC unsuccessfully tried to quash the motion. Using the fair notice defense, Ripple Labs’ attorneys argued that the company couldn’t have known that Ripple’s XRP token should have been registered as a security with the SEC because the agency never provided adequate guidance about what cryptocurrencies actually qualify as such.

“The Second Circuit or the Supreme Court could endorse the SEC’s approach and note the continued vitality of Howey as applied to digital assets. Conversely, the Second Circuit and/or the Supreme Court could find for Ripple and reject the SEC’s approach. That could provide clarity in this area,” Bini says. 

Irrespective of how this plays out, Gensler’s macro overview of cryptocurrency is clear, and the question remains as to how it might affect his regulatory proclivities. In the interview, he said, “I don’t think there’s much economic use for a micro-currency, and we haven’t seen one in centuries. Most of these tokens will fail, because the question is about these economics. What’s the ‘there’ there?”

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Mitch Eiven

Mitch is a writer who covers cryptocurrency, politics, the intersection between the two and a handful of other, unrelated topics. He believes that crypto is the future of finance and feels privileged that he has opportunities to report on it.

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