Crypto markets decline amid regulatory caution

Crypto market overview

The global cryptocurrency market cap stands at $3.29 trillion, a 0.78% decrease over the past day, while 24-hour trading volume fell 11.25% to $146.61 billion. DeFi protocols accounted for $10.47 billion, or 7.14%, of the daily volume. Stablecoins dominated activity, representing 92.77% of the total volume at $136.01 billion.

Bitcoin's dominance also slipped slightly, falling 0.20% to 57.40%, as its social sentiment hit a 2024 low. After peaking at $108,364, Bitcoin tumbled to $92,118 within three days, weighed down by U.S. political uncertainty and fears of a government shutdown.

Powell reiterates Fed’s Crypto neutrality

Federal Reserve Chair Jerome Powell emphasized the central bank's non-participation in crypto holdings, stating, "We’re not allowed to own bitcoin." Powell’s remarks came after the Fed cut interest rates in line with expectations but left future policy decisions ambiguous.

Powell also highlighted the Fed’s cautious stance on cryptocurrency regulation, focusing on safeguarding banks' health and consumer safety. The Fed has stepped back from its own digital dollar initiative, favoring private-sector innovation.

Across the Atlantic, European Central Bank officials, including Claudia Buch, echoed concerns over excessive leverage and transparency in the crypto sector. Belgian and Hungarian central bankers dismissed the idea of Bitcoin as a reserve asset, citing its volatility.

Trump’s pro-Crypto administration plans

Former President Donald Trump is reportedly preparing to appoint crypto-friendly figures to key regulatory positions. David Sacks, a former PayPal executive, is being considered for the role of AI and Crypto Czar, while Paul Atkins is tipped to lead the Securities and Exchange Commission.

These appointments could signal a shift in U.S. policy, encouraging innovation in cryptocurrency and blockchain technology while seeking to address systemic risks.

Metaplanet's Bitcoin strategy intensifies

Japanese investment firm Metaplanet has bolstered its Bitcoin holdings with a $60.7 million purchase, adding 619.70 BTC to its reserves at an average price of ¥15.33 million per Bitcoin. This acquisition brings the firm’s total Bitcoin holdings to 1,761.98 BTC, valued at ¥20.87 billion.

The firm has outlined a strategy centered on Bitcoin Treasury operations, using metrics like Bitcoin Yield (BTC Yield) as a key performance indicator. Metaplanet clarified that it has not issued convertible bonds tied to its Bitcoin holdings but may explore such options in the future.

Metaplanet’s moves mirror those of MicroStrategy, underscoring a trend among corporations to use Bitcoin as a hedge against economic instability.