In Markets
The election of the first pro-crypto administration in the US is turning out to be a bumpier ride than expected. Markets went on a rollercoaster ride in the past week, with Bitcoin losing around A$18.5K/US$13.45K over four days, before recovering slightly, then spiking higher thanks to President Donald Trump’s crypto strategic reserve posts yesterday …. and then retracing almost all of the reserve linked surge overnight. Traditional markets have also been hardened by Trump’s announcement he’s going ahead today with 25% tariffs on Mexico and Canada and that he’s doubling tariffs on China to 20%. The Atlanta Fed’s volatile GDPNow model suggests US growth is now set to tumble -2.8% this quarter, down from +2.3% last week. Bitcoin finishes the week down 5% to trade around A$138,938 (US$86,279), while Ethereum is down 13% on last week to trade around A$3,462 (US$2,152). Cardano’s surprise inclusion in the proposed reserve left it up 29% on last week, and XRP was also up 8% along with Solana (3%). Other coins were down, including Dogecoin (-2%) and Shiba Inu (-9.3%). The Crypto Fear and Greed Index bottomed out at 10 during the week but recovered yesterday to 33 or Fear.
In Headlines
Strategic crypto reserve
Trump posted on the weekend that he’s directed the Presidential Working Group to “move forward” on a US strategic crypto reserve that includes Bitcoin and Ether as its “heart” along with XRP, SOL and ADA. His previous Executive Order did not mention those last three coins and merely discussed consideration of a stockpile. The new proposal is controversial in the crypto community, with many arguing a reserve should be Bitcoin-only due to its hard money properties. Gemini cofounder Cameron Winklevoss summed up the general feeling, posting: “Bitcoin is the only asset that meets the bar for a store of value reserve asset. Maybe Ethereum.” A reserve that involves buying additional crypto would likely need legislation to get through both houses, which may be tricky. Standard Chartered says that if the reserve does happen, it could boost Bitcoin to US$500K (A$800K) by 2028.
Crypto Summit
Donald Trump will also host and deliver remarks at the first-ever White House Crypto Summit on March 7 (US time). Founders, CEOs and investors will all be there, and a statement declared that “the Summit will be chaired by the White House A.I. & Crypto Czar David Sacks, and administered by the Working Group’s Executive Director Bo Hines.” In other encouraging political news, US Congressmen Ritchie Torres and Tom Emmer are forming a Congressional Crypto Caucus to get crypto-friendly legislation up in the US House of Representatives.
SEC drops raft of crypto investigations
The SEC is beating a hasty retreat from the previous administration’s war on crypto. A federal judge last week signed off the SEC’s motion to withdraw its case against Coinbase. Consensys founder Joe Lubin, Gemini co-founder Cameron Winklevoss and decentralised exchange Uniswap all issued statements reporting the SEC informed them it is dropping investigations and charges relating to their firms. The SEC has also filed to pause its case against The Tron Foundation and its founder, Justin Sun. Separately, a court dismissed the SEC’s lawsuit against HEX founder Richard Heart due to a lack of personal jurisdiction and because the SEC failed to prove PulseChain, PulseX, and HEX were securities. There is still an Interpol red notice in effect for Heart on European fraud charges.
Memecoins are not securities
Memecoins have been declining in popularity lately as traders on the Pump.fun trenches realise the game is stacked against them, but the SEC may be giving them a new lease of life. The Division of Corporation Finance issued a statement clarifying its belief that memecoins are mostly not securities but are more like collectibles. It warned, however, that fraud conducted via memecoins can still face legal action under other laws and that users should beware rug pulls and scams. Carryover SEC commissioner from the Gary Gensler-era, Caroline Crenshaw, immediately issued a dissenting statement. Democrats have also introduced legislation to bar politicians from issuing memecoins, which would be retrospective and target TRUMP. As such, it’s unlikely to get enough support to pass.
Bybit hack traced to Safe infrastructure
Investigators have determined that North Korean hackers planting malicious code into the infrastructure of wallet provider Safe caused the US$1.4 billion (A$2.25B) ByBit exploit. That’s worrying as the treasuries of large numbers of big projects use Safe multisigs. While the code could have targeted any project, it was specifically targeted at Bybit. Safe said there were no vulnerabilities found in its smart contracts or front end source code and the hack was from “a compromised Safe Wallet developer machine.” Safe said it has rebuilt and reconfigured its infrastructure and changed all the credentials.
Ethereum hard fork Pectra update
Ethereum’s next hard fork, Pectra, faced issues in testing, with the Holesky test net failing to finalise. However, according to Tim Beiko from the Ethereum Foundation, the issue “was quite trivial and easily patched.” Testing will continue as planned, with another dress rehearsal for the fork planned for the Sepolia test net on March 5.
Ethereum Foundation new leadership
After months of pressure, the Ethereum Foundation has new leadership. Former executive director Aya Miyaguchi has become “President”, while foundation researchers Hsiao-Wei Wang and Nethermind founder Tomasz Stańczak are becoming co-executive directors on March 17. Meanwhile, Danny Ryan, the dev who spearheaded the merge, and who many wanted to lead the foundation, has joined Wall Street ETH lobby group Etherealize as co-founder. The moves have been largely welcomed by the community as a fresh start.
Why are we crashing?
Crypto markets have been in the doldrums lately, even before the latest plunge. Economist Alex Kruger said multiple variables are driving the decline, including Strategy’s Michael Saylor spending US$2B (A$3.2B) raised in one go at US$97.5K (A$157K), the Solana price falling due to unlocks, and bearishness on memecoins, as well as Bitcoin being a multi-month range breakdown. He also cited Trump’s aggressive tariffs, high inflation expectations and a growth scare as contributing factors. The good news is that he said: “I find it very hard to see this as the beginning of a prolonged bear market.” Blockworks Founder Jason Yanowitz also said he believes there’s an 80% chance this is just a garden variety bull market pullback. “I feel very convinced that this is not a bear market. So let me just [go] on the record, this is not a bear market,” he said. However, both Kruger and Yanowitz made those comments before today’s tariff announcements.
Until next week, happy trading!
