Read in the Digest:
- Caution rises in the crypto market ahead of today’s Fed interest rate hike.
- XRP (XRP) leads crypto’s biggest gainers with a 10% rally.
- Nasdaq opens crypto unit to offer custody services to institutional clients.
- Binance and FTX lead bidding in asset auction of bankrupt Voyager Digital.
- U.S. House puts forward bill to ban algorithmic stablecoins for two years.
Caution Rises in Crypto Market Ahead of Today’s Fed Interest Rate Hike
After experiencing a brief relief rally on September 20th, the cryptocurrency markets have turned choppy as all eyes turn towards the U.S. Federal Reserve ahead of its rate hikes on Wednesday, September 21st.
In response to the CPI inflation report of August, which showed that inflation was still on the rise, experts predict that the Fed could raise interest rates by 0.75 base points (bp) for a third straight time.
Chairperson of the Federal Reserve Jerome Powell is expected to hold a news conference at 19:30 UTC, in which he will announce the latest policy decision. Crypto traders are exercising caution, leading to a choppy trading session.
The crypto markets have been a mixed bag, almost evenly split between gainers and losers. Bitcoin is marginally in the green, holding out above the $19k level at the time of writing, while Ethereum (ETH) is down 0.22% after dropping to $1,350.
Flipsider:
- Despite the uncertainty of the market, MicroStrategy, led by Michael Saylor, has announced the purchase of 301 bitcoins (BTC) at an average price of $19,851.
Why You Should Care
Traders are exercising caution as they are unsure which direction a Fed interest rate hike will drive the crypto market in the short term.
XRP (XRP) Leads Crypto’s Biggest Gainers with a 10% Rally
Despite the choppy market ahead of the Fed announcement, XRP (XRP) has found enough momentum to lead the gainers today. Over the last 24 hours, XRP has made the most significant gains, rising in value by 10%.
The rally helped XRP soar to a new three-month high of $0.4215, making it the market’s best performer in the top 100 cryptos ranked by market cap. At press time, XRP trades at $0.4012.
The 24 hour price chart for XRP (XRP). Source: CoinMarketCap
Not only are investors awaiting an early end to the SEC v Ripple case after the ‘Motions for Summary‘ judgment filings, but they also expect Ripple Labs to defeat the SEC, which alleged in the lawsuit that the company had sold securities in the form of XRP during its ICO.
Flipsider:
- Ripple Labs, which recently filed for a conclusion to its lawsuit with the SEC, has raised alarms over another “transparent attempt” to delay the case.
Why You Should Care
A positive outcome from the SEC case and Fed announcement could see the price of XRP trend even higher in the coming days.
Nasdaq Opens Crypto Unit to Offer Custody Services to Institutional Clients
Multinational financial services firm Nasdaq has established a crypto unit to offer institutional Bitcoin and crypto custody services, as demand for digital assets among institutional investors increases.
Nasdaq (NDAQ) announced the launch of “Nasdaq Digital Assets” on September 20th. Nasdaq’s crypto arm will start by offering custody solutions for Bitcoin and Ether to institutional investors.
The Initial custody solutions offered by Nasdaq Digital Assets will include execution and liquidity services, and will bring together attributes of both hot and cold crypto wallets.
However, the offering is still subject to regulatory approval. As per the announcement, Nasdaq Digital Assets will be headed by Ira Auerbach, who oversaw prime broker services at leading crypto exchange Gemini.
Flipsider:
- While there are no immediate plans for a crypto exchange, Nasdaq will analyze the opportunity based on the regulatory environment and competitive landscape.
Why You Should Care
Nasdaq becomes the second-largest U.S. stock market operator to offer crypto custody services to institutional clients in the U.S.
Binance and FTX Lead Bidding in Asset Auction of Bankrupt Voyager Digital
Crypto exchanges Binance and FTX have made the leading bids for the assets of bankrupt crypto lender Voyager Digital Ltd, according to Tuesday reports gathered from people familiar with the matter.
The auction for Voyager’s assets began on September 13th at the New York office of Voyager’s investment banker Moelis (NYSE:MC) & Company. As per the reports, the bid offered by Binance totals approximately $50 million, which puts it slightly ahead of the competing bid from FTX.
According to its previous filing, around 88 entities entered into bidding for Voyager’s assets, including crypto investment manager Wave Financial, and trading platforms CrossTower, Binance, and FTX.
The Wall Street Journal, speaking with insiders familiar with the deal, reported that, unless there is a higher bidder, either Binance or FTX is likely to be announced as the winner at Voyager’s next hearing. However, the report suggests that either offer is yet to be accepted by Voyager.
Flipsider:
- Following a recent court filing, Sam Bankman-Fried’s Alameda Research will return $200 million in crypto borrowed from Voyager Digital.
Why You Should Care
The auction of assets could help Voyager Digital continue the repayment of its creditors as it progresses through its bankruptcy hearing.
U.S. House Puts Forward Bill to Ban Algorithmic Stablecoins for Two Years
The U.S. House of Representatives has drafted a bill that would see a two-year ban placed on algorithmic stablecoins such as Terra USD (now TerraUSD Classic) which depegged from the U.S. dollar in May, worsening the crypto winter.
The bill would make the issuance and creation of new “endogenously collateralised stablecoins” illegal. The legislation offers a two year grace period for existing algorithmic stablecoin providers to collateralize their offerings and change their models.
The legislation also includes a mandate for a study on LUNA-like tokens from the Treasury, and requires the cooperation of the Federal Reserve, the SEC, and Federal Deposit Insurance Corp agencies.
The stablecoin bill would continue to permit banks and non-banks to issue stablecoins with the approval of their existing network of regulators. However, non-banks will be required to register within 180 days of that approval with the Fed before being permitted to operate.
Flipsider:
- The Department of Treasury issued a call to the public on Monday to comment on the future of crypto regulations.
Why You Should Care
The bill seeks to protect investors from implosions similar to that of TerraUSD (UST), which led to the loss of roughly $60 billion, not accounting for the losses of the broader crypto market that followed.