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Coinbase sees choppy crypto markets turning positive

Coinbase sees choppy crypto markets turning positive
Expect choppy markets ahead, but Coinbase says it sees light at the end of the tunnel, remains positive. Credit: Neil Bussey/Shuttershock.
  • Bankrupt crypto exchange Mt. Gox announced a delay in its repayments this week, but Bitcoin was unchanged by the news.
  • Market expectations were already aligned with the high likelihood of a potential deferral, Coinbase said, which mitigated the upside impact.
  • Expect increased volatility ahead as macro headwinds and regulatory uncertainties continue to weigh on investors.

Happy Friday!

Bitcoin has had an odd week. It started on Monday and traded well into the US Federal Reserve’s meeting midweek.

The central bank paused rate hikes and made revisions to its outlook, with rate cuts no longer on the horizon in 2024.

The news coincided with the announcement that the planned repayment of over $4 billion in Bitcoin related to the Mt. Gox bankruptcy would be delayed until October.

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Let’s get into it!

Chop ahoy!

It was a big week for financial markets with the Fed and other central banks meeting to discuss interest rates.

The US central bank kept rates unchanged, though Fed chair Powell’s hawkish statement was less relevant.

The bank’s revised outlook set the tone; markets will stay “higher for longer.”

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Cryptocurrencies and broader financial markets sold off, and Coinbase’s head of institutional research, David Duong, said this confirmed that the macroeconomic outlook is “still a headwind.”

Coinbase remains positive on crypto heading into the fourth quarter, but expects the next few weeks to be “choppy.”

One source of volatility that remains ever present is the regulatory uncertainty in the US.

The US Securities and Exchange Commission’s crypto enforcement office sent a warning shot across the bow of crypto platforms this week, saying that more investigations and litigation are to be expected in the future.

New York state’s Department of Financial Services asked crypto firms that want to list tokens in the state to establish risk assessment standards and obtain written approval for their coin-listing policies from regulators, Duong noted.

Central bank digital currencies continue to steal focus. Republican House Majority Whip Tom Emmer called them a “CCP-style surveillance tool.”

The comment from Emmer — who is pushing a bill to limit the Federal Reserve’s power to issue a digital dollar — highlights the latest battleground in the US culture wars.

The House Financial Services Committee voted on Emmer’s bill and passed it for consideration to the full House floor — a step toward the draft becoming law.

Crypto market movers

  • Bitcoin slid 0.2% over the last day to trade around $26,600. The leading cryptocurrency by market cap is up 0.5% since last Friday.
  • Ethereum continues to trade below $1,600, up 0.3% since Thursday; it’s down 1.7% in the past week.
  • Altcoins are more volatile. Ripple’s XRP is up 1%, Cardano’s ADA dropped 1.2%, and Polygon’s MATIC lost 1.4%.

What we’re reading

Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at adam@dlnews.com.