Crypto gets political, NFTs plummet, ETF inflows surge

Today’s edition of the weekly digest: Donald Trump makes a comeback on cryptocurrency; The NFT market is seeing a decline in trading volume; and exchange-traded funds (ETFs) are witnessing a revival of inflows.

Trump fawns over cryptocurrency community The GOP’s 2024 presidential candidate has publicly declared his support for the crypto industry. Trump, who has been impeached four times, called on his supporters to donate digital assets to his campaign in his speech. Trump is using campaign donations to cover mounting legal costs. Mark Cuban, billionaire and minority owner of the Dallas Mavericks, argued on May 10 that regulators’ tough stance on the crypto industry does not do President Joe Biden any favors in the upcoming election. SEC chairman Gary Gensler is Biden’s appointee. Meanwhile, the Stand With Crypto political action committee has announced plans to provide financial support to politicians aiming to protect the interests of the cryptocurrency industry. As Trump’s support for crypto gains steam, leading financial institution Standard Chartered suggested in a report that voting for a Republican victory in November could benefit Bitcoin (BTC) and the broader crypto industry due to de-dollarisation, relaxed regulations and the approval of US spot ETFs. . Global regulatory developments The Philippine Securities and Exchange Commission (SEC) has announced plans to enact broad crypto regulations in the second half of this year. Binance has faced regulatory trouble in Canada after Canadian authorities fined the exchange $4.4 million for violating the country’s anti-money laundering provisions. Regulatory issues in Nigeria also made headlines this week. The firm’s CEO, Richard Teng, accused the Nigerian government of demanding bribes to resolve the issue surrounding the arrest of the two officials. However, the government denied these allegations. Ripple and Kraken The US House of Representatives Financial Services Committee announced on May 10 that it will consider voting to enact the Financial Innovation and Technology for the 21st Century (FIT21) Act, which aims to clarify the digital asset industry. On May 8, the US SEC submitted its final response to Ripple in the settlement phase of the three-year SEC v. Ripple case. The agency disputed numerous claims by Ripple and argued that the firm’s $1.95 billion fine for securities law violations was fair. Kraken, another crypto-focused firm engaged in a legal battle with the SEC, has filed to dismiss the regulator’s case, citing false terms and a lack of evidence that it operates investment contracts or unregistered securities-related services. NFT market records are on the decline The non-fungible token (NFT) market has made headlines this week due to a mix of positive and negative trends. First, reports confirm that the Magic Eden market surpassed Blur in NFT trading volume for the first time in April, with a volume of $468 million. The broader NFT market saw a decline in volume last week; cumulative weekly volume fell 11.16% to $144.3 million. Bitcoin-based NFTs accounted for $49 million of this volume, contributing 34% of the total figure. The proliferation of crypto-focused attacks has also impacted the NFT scene this week; An NFT trader lost $145,000 worth of Bored Ape Yacht Club (BAYC) NFTs due to a phishing attack on May 8. The spot crypto ETF market witnessed a resurgence of inflows as all spot Bitcoin ETF products in the US saw positive net inflows for the first time on May 3. However, ETF analysts are doubtful that this trend will continue in the following days. Grayscale Bitcoin Trust (GBTC) capitalized on this resurgence in investor interest, recording its first net inflow totaling $63 million on May 3. In addition, on May 6, the GBTC product saw another net inflow, recording its second consecutive stable day. entries. CoinShares reported this week that the outflows witnessed in crypto investment products last week may be much higher than the actual figure of $251 million. A total of $307 million in inflows from Hong Kong-based spot ETFs helped moderate global outflows in crypto products, according to the data. Interestingly, in a classic example of institutional adoption, data from the US SEC’s website confirmed that leading American banking giant Wells Fargo has invested in Grayscale’s and ProShares’ ETF products.