Crypto

US Securities and Exchange Commission (SEC) Commissioner and vocal crypto critic Caroline Crenshaw has accused the US regulator of downplaying risks and misrepresenting the US stablecoin market in its newly published guidelines.

However, many in the crypto industry see the SEC’s decision as a step in the right direction.

In an April 4 statement, Crenshaw said that the SEC’s statement on stablecoins — issued on the same day — contained “legal and factual errors that paint a distorted picture of the USD-stablecoin market that drastically understates its risks.”

Crenshaw disagrees, crypto industry applauds

Under the new SEC guidelines, stablecoins that meet certain criteria are now considered “non-securities” and are exempt from transaction reporting requirements.

Crenshaw disputed the accuracy of the analysis made by the SEC in arriving at that decision. She pushed back on the SEC for reiterating issuer actions “that supposedly stabilize price, ensure redeemability, and otherwise reduce risk.”

The SEC said that “albeit briefly, that some USD-stablecoins are available to retail purchasers only through an intermediary and not directly from the issuer.”

Crenshaw argued this was misleading. She said:

“It is the general rule, not the exception, that these coins are available to the retail public only through intermediaries who sell them on the secondary market, such as crypto trading platforms.”

“Over 90% of USD-stablecoins in circulation are distributed in this way,” Crenshaw added.

Meanwhile, many in the crypto industry expressed optimism over the decision.

Token Metrics founder Ian Ballina said it “feels like a clear step in focusing on what really matters in the crypto space.”

Crypto industry says positive step, just late

Vemanti CEO Tan Tran said he wished the SEC reached this point three years ago, while Midnight Network’s head of partnerships Ian Kane said it “feels like progress for crypto folks trying to play by the rules.”

Crenshaw said it is “also grossly inaccurate” for the SEC to reassure users that an issuer has sufficient reserves to satisfy unlimited redemption requests just because its reserve is valued “at or above the par value of its outstanding coins.”

Related: Stablecoins’ in bull market’; Solana sputters: VanEck

“The issuer’s overall financial health and solvency cannot be judged by the value of its reserve, which tells us nothing about its liabilities, risk from proprietary financial activities, and so forth,” Crenshaw said.

She explained that stablecoins always carry some risk, particularly during market stress or when their price begins to fall.

It comes only weeks after stablecoin issuer Tether was reportedly engaging with a Big Four accounting firm to audit its assets reserve and verify that its USDT stablecoin is backed at a 1:1 ratio.

On March 22, Cointelegraph reported that Tether CEO Paolo Ardoino said the audit process would be more straightforward under pro-crypto US President Donald Trump.

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Bitcoin (BTC) price could head back toward the $100,000 level quicker than investors expected if the early signs of its decoupling from the US stock market and gold continue.

The “gold leads, Bitcoin follows” relationship is starting

Bitcoin has shrugged off the market jitters caused by US President Donald Trump’s April 2 global tariff announcement.

While BTC initially dropped over 3% to around $82,500, it eventually rebounded by roughly 4.5% to cross $84,700. In contrast, the S&P 500 plunged 10.65% this week, and gold—after hitting a record $3,167 on April 3—has slipped 4.8%.

The fresh divergence is fueling the “gold-leads-Bitcoin narrative,” taking cues from price trends from late 2018 through mid-2019 to predict a strong price recovery toward $100,000.

Gold began a steady ascent, gaining nearly 15% by mid-2019, while Bitcoin remained largely flat. Bitcoin’s breakout followed shortly after, rallying over 170% in early 2019 and then surging another 344% by late 2020.

“A reclaim of $100k would imply a handoff from gold to BTC,” said market analyst MacroScope, adding:

“As in previous cycles, this would open the door to a new period of huge outperformance by BTC over gold and other assets.

The outlook aligned with Alpine Fox founder Mike Alfred, who shared an analysis from March 14, wherein he anticipated Bitcoin to grow 10 times or more than gold based on previous instances.

Bitcoin-to-gold ratio warns of a bull trap

Bitcoin may be eyeing a drop toward $65,000, based on a bearish fractal playing out in the Bitcoin-to-gold (BTC/XAU) ratio.

The BTC/XAU ratio is flashing a familiar pattern that traders last saw in 2021. The breakdown followed a second major support test at the 50-2W exponential moving average.

BTC/XAU is now repeating this fractal and once again testing the red 50-EMA as support.

In the previous cycle, Bitcoin consolidated around the same EMA level before breaking decisively lower, eventually finding support at the 200-2W EMA (the blue wave). If history repeats, BTC/XAU could be on track for a deeper correction, especially if macro conditions worsen.

Interestingly, these breakdown cycles have coincided with a drop in Bitcoin’s value in dollar terms, as shown below.

Should the fractal repeat, Bitcoin’s initial downside target could be its 50-2W EMA around the $65,000 level, with additional selloffs suggesting declines below $20,000, aligning with the 200-2W EMA.

A bounce from BTC/XAU’s 50-2W EMA, on the other hand, may invalidate the bearish fractal.

US recession would squash Bitcoin’s bullish outlook

From a fundamental perspective, Bitcoin’s price outlook appears skewed to the downside.

Investors are concerned that President Donald Trump’s global tariff war could spiral into a full-blown trade war and trigger a US recession. Risk assets like Bitcoin tend to underperform during economic contractions.

Related: Bitcoin ‘decouples,’ stocks lose $3.5T amid Trump tariff war and Fed warning of ‘higher inflation’

Further dampening sentiment, on April 4, Federal Reserve Chair Jerome Powell pushed back against expectations for near-term interest rate cuts.

Powell warned that inflation progress remains uneven, signaling a prolonged high-rate environment that may add more pressure to Bitcoin’s upside momentum.

Nonetheless, most bond traders see three consecutive rate cuts until the Fed’s September meeting, according to CME data.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Cryptocurrency firms felt the heat from US President Donald Trump’s sweeping tariff rollout this week as market turbulence sent share prices tumbling and foiled initial public offering (IPO) plans. 

From exchanges to Bitcoin (BTC) miners, crypto stocks suffered as much, if not more, than shares of other companies — despite the industry’s warm relationship with the US president. 

On April 2, Trump announced he was placing tariffs of at least 10% on practically all imports into the United States and adding additional “reciprocal” tariffs on some 57 countries. 

Since then, major US stock indices — including the S&P 500 and Nasdaq — tumbled by roughly 10% as traders braced for a looming trade war. 

Related: Bitcoin ‘decouples,’ stocks lose $3.5T amid Trump tariff war and Fed warning of ‘higher inflation’

Sharp selloffs

Crypto exchange Coinbase — a prominent ally of Trump during the November US elections — experienced a similarly severe sell-off, with its stock price dropping by roughly 12% during the same period, according to data from Google Finance.

Bitcoin miners are also taking a hit. The CoinShares Crypto Miners ETF (WGMI) — which tracks a diverse basket of Bitcoin mining stocks — has lost roughly 13% of its value since immediately prior to Trump’s April 2 announcement, according to data from Morningstar. 

Even Strategy, one of the best-performing stocks of 2024, wasn’t immune. Its share price has fallen by around 6% on the news, Google Finance data showed.

According to Reuters, investment bank JPMorgan has raised its estimated odds of a global economic recession in 2025 to 60% from 40% previously. 

“Disruptive U.S. policies have been recognized as the biggest risk to the global outlook all year,” JP Morgan reportedly said.

“The effect … is likely to be magnified through (tariff) retaliation, a slide in U.S. business sentiment and supply-chain disruptions.”

IPO delays

The impact of US tariffs hasn’t been limited to stock price volatility. Stablecoin issuer Circle has reportedly paused plans for a 2025 IPO, citing market turbulence. 

According to The Wall Street Journal, Circle is “waiting anxiously” before taking further steps after filing to take the company public on April 1. 

It is among several companies — including fintech Klarna and ticketing service StubHub — reportedly considering altering or shelving IPO plans. 

One exception may be Bitcoin itself, which some analysts say is finally “decoupling” from the broader market.

Bitcoin’s spot price has held above $82,000 this week, even as US equities markets collapsed.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Brazilian judges have been authorized to seize cryptocurrency assets from debtors who owe money and are behind on their payments, signaling a growing recognition that digital assets can be both a form of payment and a store of value.

According to local media reports, the Third Panel of Brazil’s Superior Court of Justice unanimously authorized judges to send letters to cryptocurrency brokers informing them about their intent to seize an account holder’s assets to repay creditors.

The report was confirmed by the Superior Court of Justice, which issued a notice on its website.

The decision was reached unanimously by the Third Panel, which reviewed a case brought forward by a creditor.

“Although they are not legal tender, crypto assets can be used as a form of payment and as a store of value,” a translated version of the Superior Court of Justice’s memo read.

Under existing rules, Brazilian judges are allowed to freeze bank accounts and order fund withdrawals, even without a debtor’s knowledge, should they rule that a creditor is owed money.

Following the recent decision, crypto assets now fall under the same purview. 

Minister Ricardo Villas Bôas Cueva, who voted in the five-person panel, said cryptocurrencies still lack formal regulation in Brazil but noted certain bills have recognized the asset class as “a digital representation of value.” 

Related: Brazil’s data watchdog upholds ban on World crypto payments

Despite regulatory uncertainty, Brazil is a major hub for crypto

Although Brazil still lacks an overarching framework for digital assets, with the country’s central bank divvying up the regulatory processes into phases, crypto adoption is surging across the country.

Brazil ranks second among all Latin American countries in terms of “crypto value received,” which is a key benchmark for adoption, according to an October report by Chainalysis. 

Earlier this year, crypto exchange Binance was granted approval to operate in the country after it acquired a São Paulo-based investment company. 

A Binance executive told Cointelegraph at the time that Brazil was making “significant strides” in regulating the industry and expects a comprehensive framework to be finalized “by mid-year.”

Nevertheless, not all of Brazil’s regulatory proposals have been favorable for the industry.

In December, the country’s central bank proposed banning stablecoin transactions on self-custodial wallets at a time when more locals were using dollar-pegged tokens to hedge against the devaluation of the Brazilian real.

Industry observers told Cointelegraph at the time that such a ban would be difficult to enforce.

“Governments can regulate centralized exchanges, but P2P transactions and decentralized platforms are much harder to control, which means the ban would likely only affect part of the ecosystem,” said Lucien Bourdon, an analyst with Trezor. 

Related: Brazilian lawmaker introduces bill to regulate Bitcoin salaries

The United States Securities and Exchange Commission (SEC) released a statement on April 4 establishing guidelines for stablecoins.

In an April 4 statement, the agency minted a new term, “covered stablecoins,” classifying them as non-securities and exempting such tokens’ transactions from reporting requirements.

According to the SEC’s definition, a “covered stablecoin” is fully backed by physical fiat reserves or short-term, low-risk, highly liquid instruments and is fully redeemable at a 1:1 ratio with US dollars.

The definition precludes algorithmic stablecoins that maintain their US dollar peg using software or an automated trading strategy, leaving the regulatory status of algorithmic stablecoins, synthetic dollars, and yield-bearing fiat tokens uncertain.

Industry leaders and executives are currently pushing for regulatory changes that would allow stablecoin issuers to share yield opportunities with stablecoin holders and offer onchain interest.

According to the new guidelines, covered stablecoin issuers must never co-mingle asset reserves with operational capital or offer tokenholders interest, profit, or yield opportunities. Additionally, the covered stablecoin issuers must never use their reserves for investing or market speculation.

Related: Stablecoin supply surges $30B in Q1 as investors hedge against volatility

SEC’s definition of “covered stablecoin” consistent with broader US policy objectives

The SEC’s criteria for covered stablecoins are consistent with regulations stipulated in the GENIUS stablecoin bill, introduced by Senator Bill Hagerty, and the Stable Act of 2025, introduced by Rep. French Hill.

The proposed legislation aims to protect the status of the US dollar as the global reserve currency through stablecoins that are backed by US dollars and government securities.

Centralized stablecoin issuers back their tokens with US dollar deposits held in regulated financial institutions and short-term US Treasury Bills, driving demand for US dollars and US government debt.

Tether, the world’s largest stablecoin issuer, is now the seventh-largest holder of US Treasuries, beating out countries like Canada, Germany, and South Korea.

Speaking at the first White House Digital Asset Summit on March 7, US Treasury Secretary Scott Bessent said the US would use stablecoins to extend US dollar dominance.

Bessent said that regulating stablecoins was central to the administration’s digital asset strategy and a top regulatory priority during the current legislative session.

Magazine: Bitcoin payments are being undermined by centralized stablecoins

As stock markets crumbled for a second day on April 4, US Federal Reserve Chair Jerome Powell said that the Trump administration’s “reciprocal tariffs” could significantly affect the economy, potentially leading to “higher inflation and slower growth.”

Addressing the public at a conference on April 4, Powell maintained a cautious approach and noted that tariffs could spike inflation “in the coming quarters,” complicating the Fed’s 2% inflation target, just months after rate cuts indicated a soft landing. Powell said,

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.” 

Moments before Powell’s speech, US President Donald Trump called out the Fed chair to “CUT INTEREST RATES” in a post on the Truth Social, taking a jab at Powell for being “always late.”

Currently, the Fed faces a critical choice: pause interest rate cuts throughout the year or respond quickly with rate reductions if the economy shows signs of weakening. While the Fed official noted that the economy is in a good place, Powell said that it was,

“Too soon to say what will be the appropriate path for monetary policy,”

On April 4, the unemployment rate also increased to 4.2% in March from 4.1% in February, but on the contrary, March’s Non-Farm Payrolls added 228,000 jobs, which exceeded expectations and reinforced economic strength. In March, the Consumer Price Index (CPI) also rose by 2.8% year over year, with March data due on April 10.

The above figures highlight a strong labor market but nagging inflation concerns, thus aligning with Powell’s warning about potential tariff impacts.

Related: Bitcoin bulls defend $80K support as ‘World War 3 of trade wars’ crushes US stocks

Powell’s caution on higher inflation and slowing economic growth came on the same day that the DOW dropped 2,200 and a 10% two-day loss from the S&P 500. X-based markets resource ‘Watcher Guru’ announced that,

“$3.25 trillion wiped out from the US stock market today. $5.4 billion was added to the crypto market.”

Bitcoin to entertain further volatility

Most investors anticipate that in the short term, Bitcoin (BTC) could see a surge in volatility. Powell’s remarks about tariffs driving “higher inflation” and possibly “higher unemployment” could rattle traditional market investors, prompting a pivot to BTC.

In fact, analysts have pointed out that BTC price appears to be “decoupling” from stocks recent downturn. Although Bitcoin hit a 9-day high on April 2 before President Trump rolled out his “reciprocal tariffs” on “Liberation Day,” the price sold off sharply once the tariffs were revealed at a White House presser.

Since then, Bitcoin has held steady above the $82,000 level, and as US equities markets collapsed on April 4, BTC rallied to $84,720, reflecting price action, which is uncharacteristic of the norm.

Independent market analyst Cory Bates posted the above chart and said,

“[…]Bitcoin is decoupling right before our eyes.”

With China retaliating with 34% tariffs on US goods and Trump pressuring Powell to cut interest rates, market volatility could push Bitcoin’s price upward as a hedge against uncertainty.

During the 2018 U.S.-China trade war, Bitcoin price didn’t see any increase across the entire year. However, it experienced notable volatility and a 15% price rise when the trade war escalated in mid-2018, with the US imposing tariffs on Chinese goods in July, followed by retaliatory measures from China.

Related: Bitcoin sentiment falls to 2023 low, but ‘risk on’ environment may emerge to spark BTC price rally

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Stablecoins are “in a bull market of their own,” even as smart contract platforms — including Ethereum and Solana — sputter amid the marketwide tumult, asset manager VanEck said in an April 3 monthly note.

The diminished activity on smart contract platforms reflects cooling market sentiment in cryptocurrencies and beyond as traders brace for the impact of US President Donald Trump’s sweeping tariff policies and a looming trade war. 

But stablecoin adoption — a key measure of Web3’s overall health — continues apace. This is partly because ongoing macroeconomic uncertainty “could accelerate the strategic case for crypto,” Matthew Sigel, VanEck’s head of research, said in an April 4 X post.

Related: Circle considers IPO delay amid economic uncertainty — Report

Stablecoins gain steam

Stablecoins collectively added nearly $10 billion in total market capitalization in March as multiple issuers, including VanEck, prepare to launch branded stablecoin products, it said. 

The inflows persisted despite a steep drop in average stablecoin yields, the asset manager noted. 

Stablecoin yields now range from around 3% to 5% — near or slightly below Treasury Bills — compared to as high as 10% at the start of the year, it said. 

Even so, issuance of tokenized Treasury Bills — a primary source of institutional stablecoin yield — increased 26% from February to March, surpassing $5 billion in total issuance, according to the report.

Ethereum, Solana slow down

Meanwhile, smart contract platforms suffered across-the-board declines in activity, with revenues and trading volumes dropping 36% and 40%, respectively, according to the report. 

Solana has suffered particularly sharply. Daily fee revenues and decentralized exchange (DEX) volumes diminished by 66% and 53%, respectively, in March, VanEck said.

In fact, Solana’s DEX share of volumes once again fell below those of Ethereum and its layer-2 scaling chains (L2s) after briefly surpassing them for the first time in February. 

This relative decline partly reflects a slowdown in memecoin trading, which still dominates Solana DEX activity. 

The segment has suffered since February after a series of memecoin-related scandals soured sentiment among retail traders. 

On Feb. 14, Libra, a memecoin seemingly endorsed by Argentine President Javier Milei, erased some $4.4 billion in market capitalization within hours of launching.

In March, trading volumes on Ethereum’s L2s also experienced declines — retracing by some 18% from February — but held up better than Solana’s, according to VanEck.

During the final week of March, “blob fees,” the Ethereum network’s main source of income from L2s, sunk to the lowest weekly levels so far this year, according to Etherscan.

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The election of US President Donald Trump was supposed to usher in a golden era of crypto. Although the regulatory stars are aligning, the crypto industry just experienced its worst quarter in years.

The prices of Bitcoin (BTC) and Ether (ETH) recorded their worst Q1 in seven years, market sentiment fell to its lowest point since the last bear market, and Coinbase stock experienced its worst sell-off since the FTX debacle. 

With the first quarter finally in the books, investors are looking forward to positive catalysts for Bitcoin and the broader market. This could come in the form of favorable Spring seasonality, more clarity on Trump’s tariff policy and shifting policy winds at the Federal Reserve. 

Coinbase stock suffers worst quarter since 2022

Coinbase stock, which has long been considered an important bellwether for the crypto industry, plunged by 33% in the first quarter despite reporting strong business fundamentals and a solid revenue outlook. As Cointelegraph reported, it was the worst quarterly decline since the FTX exchange collapse in late 2022.

Like other crypto-native businesses, Coinbase’s performance languished under the pressure of Trump’s tariff war, volatile digital asset prices and the overhang of tightening financial conditions from the previous quarter.

Beyond these short-term headwinds, though, Coinbase is booming. The company’s revenues more than doubled in 2024, reaching $6.6 billion. Its adjusted earnings rose to $3.3 billion, marking two consecutive years of growth. 

Trump family backs Bitcoin mining venture

Despite fear and volatility gripping the crypto markets, Donald Trump’s family is doubling down on its long-term investments in the industry. 

On March 31, two of Trump’s sons, Eric and Donald Jr., announced they are backing a new crypto-mining venture called American Bitcoin. The venture is majority-owned by Hut 8, a public crypto miner. 

American Bitcoin “aims to become the world’s largest, most efficient pure-play Bitcoin miner while building a robust strategic Bitcoin reserve,” the announcement said.

Although crypto prices are down, it’s getting harder for investors to remain bearish on the industry with the Trump family investing so heavily. The family is behind the DeFi project World Liberty Financial, which has amassed a large portfolio of digital assets that include Ether, Wrapped Bitcoin (WBTC), Aave (AAVE) and Chainlink (LINK).

Tether stacks more BTC

Stablecoin issuer Tether bolstered its balance sheet in the first quarter by acquiring 8,888 Bitcoin, according to onchain data that was later confirmed by CEO Paolo Ardoino. The company now holds 100,521 BTC valued at roughly $8.7 billion.

Tether is able to acquire Bitcoin and expand its venture capital business thanks in large part to its highly profitable stablecoin operations. The company generated $13 billion in profit last year on the back of its massive holdings of interest-bearing US Treasury bonds. 

Despite its success, Tether has been the subject of negative reports by the media, industry and politicians. A recent JPMorgan report argued that Tether would be forced to sell a portion of its Bitcoin holdings to comply with forthcoming US stablecoin regulations. 

A company spokesperson threw cold water on the conclusion, telling Cointelegraph that JPMorgan understands “neither Bitcoin nor Tether.” 

GameStop raises $1.5B for Bitcoin purchases

Video game retailer turned meme stock GameStop Corporation is poised to add Bitcoin to its balance sheet after finalizing a $1.5 billion convertible debt offering.

“The company expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with the Company’s Investment Policy,” GameStop said.

GameStop’s board approved the plan to invest in Bitcoin last month. The approval also green-lighted the company’s acquisition of US dollar-denominated stablecoins. 

In addition to raising debt to buy Bitcoin, GameStop hinted at potentially using a portion of its $4.8 billion cash reserves to fund future acquisitions. 

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In its latest in a series of what’s-not-a-security statements on digital assets, the Securities and Exchange Commission has added dollar-based stablecoins.

First Trust Advisors has launched two Bitcoin (BTC) strategy exchange-traded funds (ETFs) designed to provide investors with Bitcoin exposure while capping losses and earning yield, the asset manager said. 

The move comes amid an outpouring of funds seeking to enhance Bitcoin’s appeal to traditional investors by offering tailored exposure to the cryptocurrency’s performance.

The FT Vest Bitcoin Strategy Floor15 ETF (BFAP) is designed to track Bitcoin’s performance up to a capped upside while limiting drawdown risk to approximately 15%, First Trust said in an announcement.

“Over the past few years, investors have shown a remarkably strong appetite for bitcoin-linked ETFs, but the potential for sharp drawdowns has kept many on the sidelines,” Ryan Issakainen, an ETF strategist at First Trust, said in a statement.

The FT Vest Bitcoin Strategy & Target Income ETF (DFII) is an actively managed fund aiming to offer partial Bitcoin exposure while generating a yield that beats short-dated US Treasurys by at least 15%, according to the asset manager. 

The DFII fund “will seek to take advantage of bitcoin’s high volatility to generate income by selling call options,” Issakainen said. The BFAP fund also uses financial derivatives to hedge downside risk. 

Options are contracts granting the right to buy or sell — “call” or “put,” in trader parlance — an underlying asset at a certain price.

Related: Trump-linked Strive files for ‘Bitcoin Bond’ ETF

Structured Bitcoin funds

Launched in January 2024, Bitcoin ETFs emerged as one of last year’s hottest investment products. 

As of April 4, spot BTC ETFs collectively manage approximately $93 billion in assets, according to data from Bitbo. 

Other types of ETFs designed to offer tailored exposure to Bitcoin’s performance are also gaining popularity. 

On April 2, Grayscale — a cryptocurrency-focused asset manager — launched two Bitcoin strategy ETFs. Like First Trust’s ETFs, they use financial derivatives to optimize for downside risk management and income generation. 

In March, asset manager Bitwise launched an ETF holding stocks of companies with large Bitcoin treasuries. 

Spot BTC ETFs saw nearly $100 million in outflows on April 3 amid the heightened market volatility following US President Donald Trump’s tariff announcement of sweeping tariffs on April 2. 

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