Doge defies downturn as Musk calls for meme coin Twitter payments
Crypto has had a tough week, with Bitcoin sliding 9% lower after the Federal Reserve released minutes from their March meeting.
The minutes revealed plans to fight inflation by hiking interest rates and wiping trillions of dollars from the central bank’s balance sheet. This weighed heavily on crypto, causing prices to fall even amidst a flurry of positive news: The UK has revealed plans to become a global crypto hub, the Lightning Network has integrated with ecommerce giant Shopify, and Bitcoin’s biggest supporters have doubled down on their support for Bitcoin. ARK Invest CEO Cathie Wood reiterated her prediction that Bitcoin will cost $1M by 2030, and MicroStrategy CEO Michael Saylor has added $190M worth of Bitcoin to the company warchest.
Meanwhile, Dogecoin has managed to keep its head above water in a rough altcoin market. The meme coin made 2% weekly gains after Elon Musk called for the crypto to be used in Twitter subscription payments. Other altcoins sank, such as Solana which fell almost 20% despite news that OpenSea has launched support for Solana-based NFTs.
This Week’s Highlights
– Crypto market sinks as Fed reveals plans to fight inflation – UK leads the way with plans for crypto hub
Crypto market sinks as fed reveals plans to fight inflation
Weakness across global markets last week was widely attributed to the Federal Reserve, which sliced off Bitcoin’s recent gains by revealing plans to aggressively fight inflation — even at the cost of economic growth.
“It is of paramount importance to get inflation down,” said Federal Reserve Governor Lael Brainard in minutes released on Wednesday. “Accordingly, the committee will continue tightening monetary policy methodically through a series of interest-rate increases and by starting to reduce the balance sheet at a rapid pace as soon as our May meeting.”
For many, the downturn carried an extra sting as it saw stocks and crypto move in tandem, despite hopes that Bitcoin had finally “decoupled” and broken free from its correlation with equities.
UK leads the way with plans for crypto hub
The regulatory outlook has brightened in the UK, after Chancellor of the Exchequer Rishi Sunak announced plans to make the country a global hub of crypto innovation.
Under the new proposals, stablecoins will be regulated to allow them to be used as a recognized form of payment, and a new ‘financial market infrastructure sandbox’ will be created to foster innovation. To celebrate, Sunak has asked the Royal Mint to launch its own NFT.
Across the pond, US regulators are also pushing crypto forwards. Senate Banking Committee member Pat Toomey has announced the Stablecoin TRUST Act, which would create a clear path for stablecoins to be licensed, and In a landmark speech on Thursday, US Treasury Secretary Janet Yellen said that crypto was “transformative” and that it needs the same regulatory oversight as the traditional financial system.
After macroeconomic fears resurfaced last week on the release of Fed minutes, another big economic milestone is coming in the week ahead.
On Tuesday, the US consumer price index (CPI) for March, is due for release. Hotter than expected data could weigh on cryptoassets, as it would suggest stronger tightening measures from the Federal Reserve could be expected.
On the other hand, a lower than expected reading could boost markets by suggesting that monetary policies could be loosened to promote economic growth.