BTC Near $30.5K, ETH Near $1.8K As Markets Consolidate Pre-Macro Risk Events

The Current Market Situation

On Thursday, major cryptocurrencies mostly traded within previous ranges as global markets remained in wait-and-see mode ahead of significant macro risk events such as the ECB policy statement on Thursday, the US Consumer Price Inflation data on Friday, and the Fed policy announcement on Wednesday.

The total cryptocurrency market capitalization was recently slightly over $1.23 trillion, nearly exactly in line with its 21-Day Moving Average (at $1.233 trillion), which has worked as a magnet in recent days. This puts the whole crypto market valuation in the $1.18 to $1.28 trillion area for this week.

In terms of noteworthy remark, crypto millionaire and Galaxy Digital CEO Michael Novogratz warned on Wednesday that he expects a difficult ride for crypto and stock investors in the next weeks and months. This is a viewpoint held by many as warning indicators about US and global economic development continue to emerge, such as Target's weak profit prediction this week and the World Bank's global GDP growth estimates for 2022, both of which were released on Wednesday.

The continuing Russo-Ukraine conflict, as well as recent Chinese lockdowns, have exacerbated global supply chain snags and sustained rising inflation throughout the world. Indeed, ahead of the announcement of Friday's CPI numbers, the White House cautioned the American people that high inflation might continue for some time.

However, Novogratz remains bullish on crypto in the long run as mass adoption continues, with the next major rally in the space possible when a "new narrative" on the macro environment and interest rates emerges (i.e. supply catches up to demand, inflation falls, growth picks up, and the Fed doesn't have to be as hawkish).

As Markets Await Catalysts, BTC, ETH, and Major Altcoins Pivot Within Recent Ranges.

Bitcoin is back around $30,500, firmly within this week's and prior week's $29,000ish to $32,000ish ranges, in line with the larger rangebound feel to macro and crypto trading conditions in the run-up to significant global economic events. The 21-Day Moving Average, in particular, continues to provide support, and bitcoin now has a market capitalization of over $580 billion.

Similarly, ethereum is staying within this week's ranges and is now trading slightly around $1,800 per token, giving it a market capitalization of about $220 billion. The news that ethereum completed its merge to Proof-of-Stake (PoS) from Proof-of-Work (PoW) on the Ropsten testnet on Wednesday, which was hailed as one of the final major hurdles before the ethereum mainnet can transition from PoW to PoS later this year, failed to spark any upside in ETH/USD, which remains technically vulnerable.

Most big altcoins are a bit more optimistic, with Solana's SOL, Cardano's ADA, Avalanche's AVAX, and Ripple's XRP all up 1-4 percent in the previous 24 hours, according to CoinMarketCap data, but most are still trading within this week's ranges, as are the larger currencies.

Litecoin is continuing to trade at a higher level, with reports claiming that five South Korean exchanges (Upbit, Bithumb, Korbit, Gopax, and Coinone) have all quit providing the cryptocurrency in the aftermath of its new privacy legislation update. In other important cryptocurrency news, ApeCoin's Decentralised Autonomous Organisation (DAO) chose to maintain the token on the Ethereum network, despite ApeCoin creator Yuga Labs' conviction that the coin will ultimately need to transfer to its own chain. The APE/USD pair did not respond and ended the day with a gain of slightly over 2.0 percent.

According to a Deloitte/PayPal survey, three-quarters of US retailers plan to accept crypto/stablecoins within two years.

Three-quarters of US shops aim to accept crypto or stablecoins as payment within the next two years, according to a new poll released on Wednesday by Deloitte and PayPal titled "Merchants Getting Ready For Crypto." According to the poll, more than half of big retailers with annual sales of more than $500 million are investing at least $1 million per year in establishing the necessary payment infrastructure to make the shift to taking cryptocurrency. 

Within the next five years, 85 percent of merchants anticipate crypto payments to become commonplace in their industry.

FTX Will Continue Hiring Despite the Crypto Winter, and BGC Partners To Build A Crypto Exchange

FTX CEO Sam Bankman-Fried said on Wednesday that he intends to keep recruiting, although at a slower and more sustainable pace, despite the wider "crypto winter" that has seen several other exchanges cease recruitment and lay off personnel. "We'll keep pushing ahead," Bankman-Fried added, noting that FTX is still "very profitable."

In other news, Howard Lutnick, the CEO of big global brokerage BGC Partners, stated at a conference on Wednesday that the business expects to create a cryptocurrency exchange by the end of 2022/early 2023. Lutnick expressed confidence in BGC's exchange, stating that the company is well-positioned to compete with established rivals because to its superior traditional finance (TradFi) technology and the speed of its current platforms.

Regulatory Environment: BIS Crypto Disadvantages vs. TradFi, New York DFS Provides USD-Backed Stablecoin Advice

On Wednesday, the prominent Bank for International Settlements (BIS) issued a new crypto bulletin, highlighting a significant disadvantage that cryptocurrencies have when compared to traditional finance. Because congestion leads in increased gas prices, the BIS has cautioned that bitcoin users may divide between rival blockchains.

"As a result, there will be a system of rival blockchains that will be unable to harness network effects, raising worries about the overall system's governance and safety," the bank cautioned. The bank then emphasized the recent success of the Pix instant payment system's rollout/adoption in Brazil, which has seen 117 million users (67 percent of the country's adult population) join up only one year after its inception.

In other news, the New York State Department of Financial Services (DFS) became the first US regulator to publish regulatory guidelines for USD-backed stablecoins issued by DFS-regulated firms on Wednesday. Any USD-backed stablecoin must be completely backed by reserves at the end of each business day, according to the new advice, and all issuers must have a DFS-approved redemption procedure that allows stablecoin holders to redeem for US dollars.

The reserves of stablecoin issuers must be ring-fenced from the issuer's other assets/reserves and must be made up of US Treasury paper or deposits at chartered institutions, with these reserves subject to monthly auditing by a certified public accountant. 

Analysts believe it won't be long until USD-backed stablecoins are widely embraced in the United States, paving the door for their ultimate legal tender certification.