☕️The Morning Cup: $PEPE explodes…. then sputters a bit
Good morning, good day, and good evening. Welcome back to The Morning Cup. It’s your weekly recap of the latest in crypto news and your start to the week, no matter where you are. Don’t worry, we’ve selected just what you need to stay up-to-date, so you won’t spend time pouring through the news you don’t need, only the news you care about.
📈📉 Market Watch!
BTC trends lower after sky-high transaction fees and more market uncertainty
Skyrocketing transaction fees on Bitcoin’s network and the wait for the U.S. Bureau of Labor Statistics’s update to the Consumer Price Index (CPI) have pushed BTC’s price lower. Bitcoin’s fees are due to the minting of NFTs on the network Ordinal’s protocol.
The top gainers for the last 24 hours on Poloniex are CAPO/USDT, BAM/USDT, CAPY/USDT, WSTREETBABY/USDT, MEMEME/USDT, and WASSIE/USDT.
🗞️ So, what happened?
💥The big story
$PEPE explodes… then sputters a bit
In a twist that has left the altcoin world astounded, Pepecoin ($PEPE) holders are likely reaping the rewards of their investment, following an almost unbelievable surge of 5,000,000% in the past few weeks. This extraordinary rise, one of the most dramatic in the history of alternative currencies, has led many to cash in on their gains.
PEPE, however, has experienced a downturn of nearly 45% after peaking at $0.00000431 last Friday. With this peak, the coin’s market capitalization hit an impressive $1.8 billion, achieved in just over three weeks since its mid-April issuance.
This downturn in price appears to be a consequence of traders capitalizing on their profits or employing sophisticated trading strategies in the wake of last week’s introduction of several Pepe-tracked futures. It seems that many traders are cashing out by converting to Ether (ETH).
This whirlwind of activity has meant that traders, who initially invested trivial amounts, have seen these transform into fortunes of a lifetime within days of investing in Pepecoin. The whirlwind trading spree of meme coins like Pepe has not been without its fallout, particularly for Bitcoin (BTC). This frenzy has inadvertently pushed Bitcoin’s transaction costs to their highest levels in a while, reaching multi-year highs. On May 3, the cumulative fees paid on the Bitcoin network catapulted to $3.5 million, marking a 400% increase from late April.
This trend has been further fueled by the BRC-20 token standard of Bitcoin, which has lately become the new fad in the crypto ecosystem, thanks to the rise of meme coins. Astonishingly, a total of 8,500 different tokens have been created using this BRC-20 standard.
It’s not just Bitcoin feeling the pinch; Ethereum’s blockchain is also grappling with soaring gas fees, which have recently reached new multi-month highs.
Bittrex files for bankruptcy
Seattle-based crypto exchange Bittrex has filed for bankruptcy after a suit from the US Securities and Exchange Commission (SEC). The suit surrounds allegations that Bittrex Inc had been operating as an unregistered national securities exchange, broker, and clearing agency. The SEC alleges that former CEO William Shihara worked with crypto asset issuers to remove public statements that could lead regulators to investigate their token offerings as securities. Bittrex’s foreign affiliate, Bittrex Global GmbH, was also charged for operating a shared order book with the US entity without registering as a national securities exchange.
Note: GmbH stands for “Gesellschaft mit beschränkter Haftung” and is a German phrase describing a company that is designated as having limited liability, just like a US-company with the suffix LLC.
Bittrex Inc and Bittrex Global have denied the allegations, with the former asserting that it did not trade or offer securities on its platform, and the latter stating it has no U.S. customers and will actively defend against the charges in court.
The SEC also alleges that Bittrex made at least $1.3 billion in revenue from transaction fees and other services between 2017 and 2022, acting as a broker, exchange and clearing agency without registering these activities. The charges come after Bittrex agreed to pay a $29 million fine in October for apparent sanctions violations and anti-money laundering law breaches. The company had previously announced plans to cease U.S. operations due to regulatory uncertainties.
It bears mentioning that Bittrex’s already laid plans to leave the US were to due complaints of lack of regulatory clarity much in parallel with US exchange Coinbase’s own misgivings. As previously reported by the Morning Cup, Coinbase is going through the courts to force the SEC to deliver clearer guidelines and hopefully define a less hostile regulatory environment.
It should also be noted that the bankruptcy proceedings affect the US entity, and purportedly do not affect Bittrex Global, which is based in Liechtenstein and serves Bittrex’s customers outside the US. What happens next is, as it has announced, Bittrex will exit the US, however enforcement from the SEC may follow.
TradFi incumbents pour more resources into crypto
Today’s crypto space is full of twists and turns, and even news that arguably runs contradictory to current sentiments. But one problem that stands out, whether in times of a bull or bear market, is that of the learning curve to entering crypto for new users. As the cryptocurrency market navigates its current downturns, an influx of new users and capital could be instrumental in fortifying its resilience. Simplifying user interaction with blockchains could unlock this next great windfall of new customers.
In light of this, and although crypto has proven a bit thornier as of late, established providers with mainstream reach are stepping up to bridge this gap. Recent weeks have seen an array of renowned financial institutions unveiling new cryptocurrency products and services aimed at making the space more user-friendly. These notable companies include Mastercard, PayPal, and Robinhood.
At 2023’s Consensus, which is an annual conference held in Austin, Texas where the industry comes together to discuss the latest and greatest developments in Web3, representatives from these titans discussed their thoughts on the current landscape. PayPal’s SVP and GM of Blockchain, Crypto, and Digital Currencies, Jose Fernandez da Ponte, asserted that “despite the market, we continue to be at the cusp of mainstream adoption.”
In a recent 10-Q filing with the SEC, PayPal disclosed almost $1 billion in customer-held cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC), on its balance sheet. The filing represents an increase of $339 million in customer crypto assets since last year. While the company does not hold any cryptocurrencies outside of those belonging to customers, it assures protection from unauthorized transactions up to a lifetime cap of $50,000. Over the past few years, PayPal has introduced a variety of crypto features, including enabling transfers to third-party wallets and exchanges, and integrating a feature with ConsenSys that allows users to buy Ether via PayPal. The company also availed the ability to transfer crypto via its mobile payment service app, Venmo.
According to Raj Dhamodharan, EVP of Blockchain and Digital Currencies at Mastercard, the crypto ecosystem is in a “transitionary period,” with the industry exploring the potential of the technology and its various use cases. In this context, Mastercard recently launched “Crypto Credential,” a new framework aimed at certifying interactions between consumers and businesses on blockchain networks. Dhamodharan states, “We think public blockchains can be a utility to store and move value over time… and you have to show that you can do it in a regulatory compliant way.”
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Thanks for spending some time with us as we went over what’s going on. And wherever you are, from the team here at Poloniex, good morning, good day, and good evening!
