Bitcoin Faces Its Worst Month In 2 Years & the SEC Secretly Deemed ETH a Security?

SEC Chair Gary Gensler refusing to answer questions from Congress makes way more sense now...

By: Zack Guzman

April 29, 2024

This Week In Crypto… Bitcoin is facing its worst month since November 2022, and one bull is already throwing in the towel — could Bitcoin’s Layer-2s steal the show? Plus, a bombshell revelation on when the SEC secretly deemed Ethereum a security and why the crypto industry itself is increasingly torn on memecoins.

Bitcoin on Pace for Worst Month Since 2022

April is almost over, and it ain’t looking good. So far, the month is shaping up to be the worst for Bitcoin since the crypto shed 16% back in the bear market depths of November 2022. Only 3% more to go before it’s as bad.

And even though many still believe Bitcoin is still on track to hit $125,000 later this year, Bitcoin’s Spring slump has at least given one well-known trader a pause. Technical trader Peter Brandt, who in February issued a $200,000 price target, flirted with the idea that Bitcoin may have already peaked this cycle when looking at Bitcoin’s data trough the lens of “exponential decay.”

Our take? A breather here isn’t completely unexpected as fund flows sag for the third consecutive week, according to CoinShares data. Turns out even Bitcoin ETFs need a break from “up only” all the time.

Crypto saw net fund outflows for the third consecutive week, according to CoinShares.
Crypto saw net fund outflows for the third consecutive week, according to CoinShares.

The SEC’s Secret War on Ethereum

New un-redacted filings in the Consensys lawsuit against the Securities and Exchange Commission showed that the agency had secretly been on a warpath for more than a year. As first reported by Fox Business crypto reporter Eleanor Terrett, the SEC greenlit an investigation into ETH just five days before Chair Gary Gensler refused to answer whether the crypto was a security during Congressional testimony.

Keep in mind that the SEC also already approved Ethereum Futures ETFs for trading in October 2023, so many are pointing out it looks even stranger they might go after Consensys for ETH being a security now. Nonetheless, it makes it a little more clear why Gensler was being so shady in not wanting to answer questions last year.

Bitcoin Layer-2s Even More The Play Now?

In theory, Ethereum getting targeted by the SEC now could mean huge things for Bitcoin. But even more specifically, it could mean huge things for the projects looking to emulate everything that made Etherum what it is on top of Bitcoin.

We at Coinage chatted with Muneeb Ali, the co-founder of one of those projects last week. He explained that everything exciting in crypto — DeFi, NFTs, etc. — are just getting started on Bitcoin, and that it took longer because projects like his at Stacks wanted to get it right.

Now, as Ethereum could very well be fighting for its life in the U.S. — and prospects of an ETH ETF look shot to hell as long as Gensler is running the SEC — it’s interesting to think about a huge run for Bitcoin Layer-2s. Stacks is only up 50% this year to Bitcoin’s 41% run.

Crypto Turns on Memecoins

Crypto Twitter was up in arms this weekend after a16z’s Chris Dixon wrote an op-ed exploring the pro/cons of memecoins. Some of the nuance may have gotten lost by the pro-memecoin degens (which might not be too surprising.)

“But my goal here isn’t to defend or to diminish memecoins. It’s to point out the backwardness of a policy regime that lets memecoins thrive — while crypto companies and blockchain tokens with more productive use cases face hurdles,” Dixon wrote.

Others, including Solana’s co-founder, were quick to shoot back that memecoins have offered some form of utility — even if not everyone agrees with the gambling.

Stripe Welcomes Crypto Back

In another sign of crypto crossing the chasm, payments giant Stripe has once again decided to provide crypto payments. The company had previously become one of the first payment processors to accept Bitcoin back in 2014, but now it’s the explosion of stablecoins that has Stripe getting back in the game.

This week, Stripe also announced a partnership with Avalanche as well. Ava Labs, the project behind the Avalanche blockchain, said its Core wallet would also use Stripe’s fiat-to-crypto onramp.

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