Today’s edition of the weekly recap: Donald Trump does an about-face on cryptocurrency; the NFT market sees a dip in trade volume; and exchange-traded funds (ETFs) witness a resurgence of inflows.
Trump panders to the cryptocurrency community
- The GOP’s 2024 presidential candidate openly declared support for the crypto industry. In a speech, the quadruple-indicted Trump urged his supporters to donate digital assets to his campaign.
- Trump is using campaign donations to pay mounting legal expenses.
- Mark Cuban, billionaire and minority owner of the Dallas Mavericks, argued on May 10 that regulators’ tough stance on the crypto industry isn’t doing President Joe Biden any favors in the forthcoming election.
- SEC chair Gary Gensler is a Biden appointee.
- Meanwhile, the Stand With Crypto political action committee announced plans to provide financial support to politicians who aim to protect the interest of the cryptocurrency industry.
- As Trump’s endorsement of crypto gains steam, leading financial institution Standard Chartered asserted in a report that voting a Republican victory in November could benefit Bitcoin (BTC) and the broader crypto industry due to de-dollarization, relaxed regulations and the approval of U.S. spot ETFs.
Global regulatory developments
- The Philippines’s Securities and Exchange Commission (SEC) disclosed plans to enact ample crypto regulations in the second half of this year.
- Binance faced regulatory issues in Canada, as Canadian authorities imposed a $4.4 million fine on the exchange for violating anti-money laundering provisions in the country.
- Regulatory woes in Nigeria also made headlines this week. The firm’s CEO, Richard Teng, accused the Nigerian government of demanding bribes to resolve the issue around the arrest of two of its officials. However, the government denied these claims.
Ripple and Kraken
- The U.S. House Financial Services Committee revealed on May 10 that it will consider voting on enacting the Financial Innovation and Technology for the 21st Century (FIT21) Act, which aims to clarify the digital asset industry.
- On May 8, the U.S. SEC filed its final response to Ripple in the remedies phase of the three-year-old SEC v. Ripple lawsuit. The agency argued against multiple claims from Ripple, contending that its $1.95 billion fine for the firm’s securities law violations is fair.
- Kraken, another crypto-focused firm in a legal battle with the SEC, filed to dismiss the regulator’s lawsuit, citing incorrect terms and lack of evidence that it processed services related to investment contracts or unregistered securities.
NFT market records dip
- The non-fungible token (NFT) market made headlines this week due to a mix of favorable and unfavorable trends. For one, reports confirmed that Magic Eden marketplace overtook Blur for the first time ever to lead in NFT trade volume in April, with a $468 million volume.
- The broader NFT market saw a drop in volume in the past week, with cumulative weekly volume slumping 11.16% to $144.3 million. Bitcoin-based NFTs accounted for $49 million of this volume, contributing to 34% of the total figure.
- The proliferation of crypto-focused hacks also impacted the NFT scene this week, with an NFT trader losing $145,000 worth of Bored Ape Yacht Club (BAYC) NFTs to a phishing attack on May 8.
Grayscale touts spot ETF revival
- Reports from this week confirmed that the spot crypto ETF market witnessed a resurgence of inflows, as all the spot Bitcoin ETF products in the United States saw positive net inflows for the first time on May 3. However, ETF analysts doubt the sustenance of this trend in subsequent days.
- Grayscale Bitcoin Trust (GBTC) leveraged this revival of investor interest to record its first-ever net inflow, totaling $63 million on May 3. In addition, on May 6, the GBTC product saw another net inflow, marking its second consecutive day of consistent inflows.
- CoinShares reported this week that the outflows crypto investment products witnessed the previous week could be much higher than the actual figure, which amounted to $251 million. According to the data, the inflows from Hong Kong-based spot ETFs, totaling $307 million, helped soften the global outflows in crypto products.
- Interestingly, in a classic case of institutional adoption, data from the U.S. SEC’s website confirmed that leading American banking giant Wells Fargo invested in Grayscale’s and ProShares’ ETF products.
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