Good morning. Here’s what’s happening:

Prices: Bitcoin falls below $26.5K as fears about Binance and Coinbase linger.

Insights The fall in bitcoin and Ether prices since 2022 reflects the decline in stablecoins balances during the same time period.


A Bitcoin Retreat

Bitcoin returned to its old ways of being downtrodden on Wednesday, amid a wider crypto-decline that included altcoins both mentioned and not in the Securities and Exchange Commission (SEC), lawsuits filed against Binance and Coinbase this week.

The largest cryptocurrency, based on market capitalization, was trading at $26,364, down 3.2% in the last 24 hours. BTC was trading above $27200 on Tuesday, as investors appeared to have already priced in the latest regulatory blows that an industry already suffering from various debacles. The Binance.US platform saw a large increase in the price of Bitcoin, ether and Tether’s USDT stablecoin. This was a sign investors were leaving the platform.

Ruslan Lienkha wrote in an email to CoinDesk that YouHodler’s Ruslan Lienkha was the chief of markets. He said the company expected higher volatility “days, or even weeks,” as a result the SEC lawsuits.

He added that, “in general the market appears to be in better shape” and more prepared for potential outcomes. Crypto market participants have managed risks better than two or three years ago.

ETH has performed better than BTC, trading at $1.834, down 2.7% since Tuesday. CoinDesk Indices Ether Trend Indicator’s (ETI) reading improved from the previous day. CoinDesk’s Glenn Williams, an analyst, wrote that the ETI, which measures price momentum, indicated “recent bullish prices are outpacing past price movements.”

SEC fallout continued to be fierce on Wednesday. Binance Smart Chain native token BNB recently fell 7.6% from the same time on Tuesday. At one point in the day, it sank as low as $252, the lowest price since January. Cardano’s ADA, Polygon’s MATIC, and Solana’s SOL all of the top 10 tokens based on market capitalization, as noted in an SEC filing, have recently taken a dip between 6% to 9%.

The CoinDesk Market Index is a measure for the performance of crypto markets.

Investors were worried about the Bank of Canada’s unexpected rate hike. Equity indexes ended mixed, with the Dow Jones Industrial Average ticking up, but the Nasdaq Composite (DJIA), and S&P 500, falling by 1.3% and 0.4% respectively. The Bank of Canada’s decision is the latest indication that central banks are still worried about inflation, and that monetary hawkishness which has been a drag on asset markets for the last year could continue.

Edward Moya is a senior analyst at Oanda who specializes in foreign exchange markets. He noted that the Canadian central bank has been among the most pro-active when it comes to monetary policy. Moya wrote that the central bank was among the most proactive in monetary policy. “They raised rates first in 2022, and then held them back earlier this year,” he said. “The BOC has signaled that there could be more rate increases and this has everyone rethinking the Fed’s decision to stop after July.”

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What does the current stablecoin balance mean?

One simple factor may be able to provide more insight on the future price of bitcoin than the other factors.

(Glassnode)

Stablecoins are a good way to predict demand for crypto assets.

Some exchanges, such as Coinbase and Bittrex, offer a “fiat-onramp” whereby U.S. dollar can be exchanged directly for crypto. However, other investors prefer to acquire crypto assets by exchanging stablecoins for crypto.

According to Glassnode on-chain data company, between January 2022 ad June 2023 the amount of stablecoins on exchange addresses decreased from 32 billion dollars to 19 billion. BTC and ETH prices are down 45% each and 50% over the same time period.

The increase in stablecoin balances during the rest of 2023 is likely to be an indication that the demand for buying stablecoins has increased.

This article has been written and edited solely to provide accurate information for the reader. CoinDesk could earn a commission if you click on the link provided by Glassnode. See our Ethics Policy for more information.


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Bitcoin (BTC), which had fallen to a low of under $25,000 in less than three months, bounced back on Tuesday after news broke that Coinbase (COIN), a company owned by Coinbase, was being sued by the SEC for alleged violations of federal securities laws. The SEC filed a similar lawsuit against Binance the day before. Jeff Dorman, Arca’s Chief Investment Officer, weighed in. Kathy Kraninger, Solidus Labs’ Vice President of Regulatory affairs, discussed the impact regulatory actions have on consumers. Nikhilesh De, CoinDesk’s Managing Editor, explains the latest developments in SEC’s bid to get a temporary restraining to freeze assets linked to Binary.US.

Coinbase’s CEO Armstrong says that the Staking Service will not be shut down :. The country’s biggest exchange, despite being sued by federal and state regulators for offering staking service, will continue to do so.

BNB drops to 6-month low as ADA, MATIC, SOL lead altcoin tumble – Cryptocurrencies that the SEC characterized in recent lawsuits as securities led the decline among altcoins. BTC traded mostly at the same level.

The Petrodollar, its Discontents and Bitcoin’s Future Recent actions by Saudi Arabia and China have led to fears that the U.S. Dollar could lose it’s preferred status in oil trading. Alternative national currencies don’t seem to be that attractive. Would a currency similar to bitcoin be more successful?

The Aave Lending protocol is moving closer to launching GHO Stablecoins on Ethereum Mainnet : On Tuesday, the developer posted a post about governance that proposed two features for a decentralized stablecoin.

Stablecoin issuer Circle receives digital token license in Singapore : USDC’s issuer received approval in principle in November of last year.

James Rubin is the editor.