It seems this week will follow the same trend as last week’s price action, where crypto assets trade sideways within a narrow range, with fluctuating volatility throughout the week. Bitcoin is trading at $19k, while Ethereum is in the $1,300 range. As the new week begins, trading volume has more than doubled in the past 24 hours for BTC and ETH. Let’s look at relevant news affecting the markets today.
Key Points:
- Cryptocurrency markets remain flat this week as trading volume rises significantly.
- Tesla’s most recent quarterly reports suggest the company continues to hold Bitcoin.
- Goldman Sachs forecasted a bullish market for the Dollar as the Fed will continue its monetary policy, spelling bearish pressure for cryptocurrencies.
- Ethereum is at the center of a heated debate regarding the classification of the asset, with the SEC pushing for regulating ETH as a security.
Crypto Market Update
One of today’s biggest news is Tesla’s most recent quarterly financial report with the SEC, called the 10-Q.
According to the report, Tesla disclosed that it invested $1.5 billion in Bitcoin in the first quarter of 2021. In addition, Tesla announced that it managed to gain $64 million on certain conversions of Bitcoin to fiat currency despite a $170 million impairment loss:
“In the nine month period ended September 30, 2022, we recorded $170 million of impairment losses resulting from changes to the carrying value of our bitcoin and gains of $64 million on certain conversions of bitcoin into fiat currency by us.”
Tesla’s stock is down by 6% today, currently at $201.05. Speaking of the stock market, most stocks opened in the green today, with the NASDAQ, S&P 500, and Dow Jones up several points in the past couple of hours.
In other news, according to a Coindesk report, Goldman Sachs has forecasted a bullish market for the Dollar, which could create further bearish pressure for crypto markets, including Bitcoin and Ethereum.
The Fed isn’t likely to ease on interest rate hikes and monetary policy until 2024, which could prolong the current bear market for cryptocurrencies. The economy is still suffering from inflation, which is at an all-time high.
When it comes to Ethereum, the second-largest crypto asset by market cap, is at the center of a heated debate with regulators, including the SEC, when it comes to classifying the asset. The SEC now believes ETH should be considered a security after the Ethereum network merge, which changed the blockchain from a proof-of-work to a proof-of-stake consensus model.
Rather than miners securing the network, all transaction validation is done by validators, most of which are located in the United States. This factor is why the SEC considers post-merge Ethereum to be a security and is starting to regulate ETH-based projects as such.
While Ethereum’s transition to a sustainable blockchain project is essential for its long-term survival, there are significant tradeoffs regarding regulation and the classification of staking-based assets, which investors should consider before going long on Ethereum.
Despite the various challenges crypto assets are dealing with, the market is healthy as Bitcoin and Ethereum manage to hold support relatively well. In addition, the sharp increase of over 100% in the past 24 hours for the trading volume of both assets is a significant bullish sign this week.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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