High tension and volatility continue: Top crypto news this week

By Iliana Mavrou

Cryptocurrency markets continued to face volatility deep into this week, with bitcoin (BTC), the top cryptocurrency by market capitalisation, trading on the lower levels between the $37,000 and $39,000 regions. Meanwhile other cryptocurrencies such as ether (ETH) and Binance’s BNB lost over 2% of their value between 2 and 3 of May.

What are this week’s top crypto news that may have brought this on?

Anticipation remains high ahead of Fed’s Wednesday meeting

The Federal Reserve’s Wednesday meeting which is set to raise interest rates by a half percentage point has been throwing investor sentiment off.

Meanwhile analysts believe that the 50bp hike may not affect the cryptocurrency markets, an announcement of a potential 75bp hike later on in the year could do the job.

The Fed will reiterate that the only thing it is looking at right now is getting inflation back under control and Powell will in all likelihood leave 75bps-100bps type moves on the table, though the consensus remains for 50bps at this meeting. The risk is very much skewed to the upside and 75bps is entirely plausible, which could be seen as hawkish and weigh on risk assets, including cryptocurrencies.

SEC almost doubles crypto unit staff

The Securities and Exchange Commission announced on Tuesday that it has hired 20 new staff members who will be responsible for protecting investors in crypto markets from cyber-related threats. The now formerly known Cyber Unit was renamed to Crypto Assets and Cyber Unit.

“The Division of Enforcement’s Crypto Assets and Cyber Unit has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets. By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity,” the SEC chair Gary Gensler said.

The director of SEC’s Division of Enforcement, Gurbir S. Grewal, added that individual retail investors tend to fall victim to crypto-related security frauds, while cyber threats continue to pose huge risks to the US financial system.

“The bolstered Crypto Assets and Cyber Unit will be at the forefront of protecting investors and ensuring fair and orderly markets in the face of these critical challenges,” he added.

El Salvador sees no funding in $1bn bitcoin bond

El Salvador was the first country in the world to use bitcoin as a legal tender alongside the US dollar. Once celebrated for being such a foreword thinking nation, the country is currently stuck in a $800 million debt it must repay by January.

The country’s president Nayib Bukelehas has been seeking funding for a $1 billion bitcoin bond since November 2021, however, so far, this offering did not receive a single penny, Bloomberg reported. On the other hand, according to the nation’s finance minister the bond is 50% oversubscribed.

Either way, El Salvador’s government has not yet introduced the necessary laws for the bond to spring into action. Initially planned to be launched in March, the bond has been now postponed to September.

Pakistani government reviews whether crypto should be banned

The Pakistani federal government set up three committees on Wednesday that would help it decide whether cryptocurrencies should be banned in the country, Bitcoin.com reported.

The three committees will be in charge of organising a crypto policy which will be sent out to a different committee headed by the country’s finance secretary Hamed Yaqoob Sheikh.

In mid-January 2022 it was announced that the Pakistani central bank issued a report to the Sindh High Court asking it to ban the use of cryptocurrencies within the country.