What happened last week

The cryptocurrency market experienced a rollercoaster ride this week, starting off with a -7% correction in the first hours of Monday. Tuesday saw choppy action into the middle of Wednesday where prices picked up again following the FOMC meeting which was interpreted as dovish, not only benefitting crypto but risk assets as a whole while also proving positive for equities. 

In case you missed it, focus is no longer whether to hike or not but rather when to cut rates and according to JPMorgan, Goldman Sachs and market participants that should start happening at the end of Q1 at the earliest estimations at least in the US whereas European central bankers have been more reluctant to talk about rate cuts at all. 

As mentioned previously this week, the recent corrections have been natural and still not at the magnitude seen in previous bull runs. It is of course expected that some investors are taking profits with BTC posting YTD performance of 160%. As also mentioned previously, the corrections seem to have been driven by short-term holders whereas long-term holders have not been selling at the same proportions. 

SOL, ADA, AVAX and following the Coinbase listing, also BONK saw significant outperformance this week. Sales of the Solana Phone also surged on news of BONK airdrops to owners. 

Volumes were muted following the sharp decline on Monday in anticipation of a packed financial calendar, with the focus naturally having shifted from FOMC to European figures after the FOMC decision. On Thursday BTC saw increased volatility at exactly 14:00 where BoE was due to decide and ECB right after. The importance of the macro environment was again confirmed to have a strong impact on crypto prices. 

The topic of ETFs was also present this week with BlackRock and Fidelity giving insights on the redemption process for their ETF, SEC had talks with Franklin Templeton, ETH spot ETF was delayed (not surprising), JPMorgan said that ETF optimism is overhyped and most importantly Gensler said yesterday evening that the SEC is considering the recent court rulings in their decision making, sparking optimism. 

Staying the realm of regulation and the US, Elizabeth Warren’s AML bill targeting crypto money laundering which was under scrutiny from Twitter users as being opportunistic and privacy infringing received more support from her colleagues. 

Obviously we cannot send out an update today without mentioning the Ledger vulnerability which was reported yesterday:

• A major vulnerability was discovered on Ledger Nano hardware wallets which resulted in limited losses around half a million. 
• The vulnerability was described as a "supply chain attack" affecting multiple dApps. 
• Users are recommended to do the following.
• The hack is a reminder that no security measure is foolproof. Even hardware wallets, which are considered to be one of the most secure ways to store cryptocurrency, can be hacked.

Given the age and prominence of Ledger in the crypto space being the first hardware wallet ever and still the most widely used one, it is certainly calming to see that crypto prices didn’t react more than they did.