Cryptos Decline Ahead Of Powell's Speech

Cryptocurrencies dropped close to 1 percent in the past 24 hours amidst anxiety ahead of the Monetary Policy Conference at Washington on Friday. Federal Reserve Chair Jerome Powell and former Chair Ben Bernanke are scheduled to discuss monetary policy, inflation and the economy at the Conference. Data indicating a resilient American economy and hawkish comments from recent Fed speakers have lifted the anxiety surrounding the event.

The continuing stream of hawkish comments from Fed officials have caused rate hike expectations to build up over the past week. According to the CME FedWatch tool, the probability assigned to a 25-basis points rate hike by the Fed in its next review due in 26 days has risen to 36.8 percent, from 35.6 percent a day earlier and 15.5 percent a week earlier.

Though rate hike expectations have increased, optimism regarding the resolution of the debt ceiling crisis appears to have softened the safe haven demand for the U.S. Dollar.

The Dollar Index, a measure of the Dollar’s relative strength has shed 0.35 percent overnight and is currently at 103.22. The day’s range was between 103.20 and 103.62.

Concerns over the liquidity impact that could follow the potential lifting of the debt ceiling also weighed on sentiment. Some analysts have predicted a draining of liquidity following the debt limit hike which could impact the prices of risky assets including cryptocurrencies.

Overall crypto market capitalization has dropped to $1.13 trillion, versus $1.14 trillion a day earlier.

Bitcoin has shed 1.4 percent overnight to trade at $26,917.39. The leading cryptocurrency which ranged between $27,391.63 and $26,415.10 in the past 24 hours is however holding on to weekly gains of 1.84 percent.

Ethereum also erased 0.3 percent in the past 24 hours and is currently changing hands at $1,814.69. The leading alternate currency which is holding on to gains of 2.3 percent over the past week, traded between $1,823.97 and $1,774.20 in the past 24 hours.

10th ranked Polygon (MATIC) is the highest-ranking cryptocurrency to trade in the overnight green zone. MATIC has gained 0.4 percent overnight and 2.5 percent over the past week.

73rd ranked Injective (INJ) topped the price charts with a rally of close to 6.5 percent. 80th ranked Kava (KAVA) added more than 5 percent whereas 54th ranked Render Token (RNDR) advanced 2.5 percent in the past 24 hours. 79th ranked Casper (CSPR) also recorded gains of 1.7 percent.

RNDR tops weekly gains with a rally of 38 percent, followed by 97th ranked Mask Network (MASK) and 55th ranked Conflux (CFX) which have both added 22 percent.
71st ranked Optimism (OP) and 69th ranked Pepe (PEPE) are the big losers, shedding more than 4 percent. 32nd ranked Lido DAO (LDO) dropped 3.9 percent.

65th ranked Bitcoin SV(BSV) has declined more than 6 percent in the past week, followed by 22nd ranked Cosmos (ATOM) and 90th ranked XDC Network (XDC) which have both erased more than 4.5 percent.

55th ranked Conflux (CFX) continues to top year-to-date gains, adding 1273 percent in 2023.

87th ranked Huobi Token (HT) and 96th ranked PancakeSwap (CAKE) have declined more than 40 percent in 2023.

Meanwhile, in a strongly worded letter titled “An end to the lawless crypto space”, T. Raja Kumar, the Head of the Financial Action Task Force or FATF has called upon the G7 countries to combat illicit financial flows through cryptocurrencies.

The FATF, is a 39-member inter-governmental body that functions as the global money laundering and terrorist financing watchdog. More than 200 countries and jurisdictions have committed to implement the FATF’s Standards.

Noting that crypto assets continue to operate in a virtually lawless global environment, Kumar called upon the G7 to lead by example in fully and effectively implementing the FATF Recommendations, which are the global standards on combatting money laundering, terrorism financing and proliferation financing.

G7 countries should lead by example and regulate the crypto sector so that no virtual safe havens exist for illicit financial transactions, Kumar wrote. This includes implementation of the ‘travel rule’, which requires virtual assets service providers to identify the sender and receiver of the transaction.

Though FATF extended its global anti-money laundering and countering terrorist financing standards to crypto assets in 2019, about 73 percent of countries – including some G20 countries – were still non-compliant or only partially compliant with these and have not yet begun to supervise crypto activity. Kumar stressed that this unacceptable situation needed to be urgently addressed.

Kumar also cited the recently published FATF report on ransomware financing which highlighted that ransomware payments have increased significantly in recent years, almost exclusively using crypto assets. Crypto assets are also used to evade sanctions, and by terrorist groups to raise and move funds.

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