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Ethereum ETF, FOMC Minutes, US Employment Data and Trade Deficit

Published

7 months ago

30 June, 2024

Bitcoin drops to $67K, ETH below $3,600, while INJ and GNO rise 4-9%

O crypto market is gearing up for a week packed with significant events and data releases that could influence investor sentiment and market movements. Key highlights include the delayed launch of Spot Ethereum ETFs and the implementation of the European Union’s MiCA regulation.

Furthermore, the market is also bracing for the release of the minutes from the Federal Reserve’s June meeting. In addition, the week will see US jobs data and trade deficit figures. Each of these events has the potential to impact the volatile cryptocurrency market, making it crucial for investors to stay informed.

Ethereum ETF launch postponed

The anticipated launch of spot Ethereum ETFs has been delayed once again by the US Securities and Exchange Commission (SEC). Analysts including Bloomberg’s Eric Balchunas and James Seyffart estimated it to be around July 2. However, the SEC has issued additional comments on the S-1 forms submitted by the issuers.

The SEC has now requested that the forms be resubmitted by July 8, pushing back the potential release date to mid- or late-July. Previously, SEC Chairman Gary Gensler confirmed that the Ethereum ETF approval process is progressing smoothly for all issuers. While the delay leaves the Ethereum market in FUD, ETFstore President Nate Geraci noted that the revisions were slight.

He suggested that negotiation could begin within 14-21 days of the new submission. This delay adds uncertainty to the market, but a successful launch could provide a significant boost to the Ethereum Price and general market sentiment. So this week could see S-1 amendments by BlackRock, VanEck, Grayscale, 21Shares, Fidelity and other issuers.

Implementation of MiCA encryption rules in the EU

On June 30, the European Union’s Markets in Cryptoassets Regulation (MiCA) will come into force. It will introduce one of the first comprehensive regulatory frameworks for crypto trading in a major financial market. However, a recent study by Acuiti and Eventus reveals that 91% of affected companies are not prepared for MiCA requirements.

Therefore, this regulatory implementation is expected to reshape the industry. This emphasizes the urgent need for companies to accelerate their compliance efforts. Therefore, cryptocurrency companies that fail to adapt could face significant operational and financial consequences.

This could potentially lead to market disruptions and volatility in the short term. However, in the long term, MiCA aims to increase market stability and investor protection, which could promote greater institutional participation in the crypto market.

Read too: US SEC Delays Spot Ethereum ETF Launch, Sends Back S-1 Forms

Minutes of the June FOMC meeting

On July 3, the Federal Reserve will release the minutes of its June meeting. Federal Open Market Committee (FOMC) Meeting to 2 p.m. ET. Additionally, the minutes will provide information about the Fed’s decision-making process, particularly with regard to interest rates. Additionally, the rate pause is expected to continue as Fed Governor Michelle Bowman has indicated that rate cuts are unlikely before 2025 despite recent cooling inflation data.

Any hint of a hawkish stance could weigh on the cryptocurrency market, as higher interest rates typically reduce the appeal of riskier assets such as cryptocurrencies. On the other hand, indications of prolonged rate stability or dovish sentiment could support market sentiment and cryptocurrency prices.

US jobs data for May and June

O US Labor Market Data will be closely monitored this week. It will see several releases providing a comprehensive view of employment trends:

1. Job vacancy data (July 2): The May data, with an estimated 7.860 million job openings, follows April’s 8.059 million. A higher-than-expected number could indicate a robust labor market, potentially leading to concerns about inflationary pressures and more aggressive Fed policies, which could negatively impact the cryptocurrency market. On the other hand, a lower number could alleviate these concerns, supporting cryptocurrency prices.

2. Employment Report (July 5): The June employment report is expected to show 195,000 new jobs, down from 272,000 in May. A higher number could signal economic strength, but could also increase concerns about inflation, while a lower number could harm economic growth prospects, affecting market sentiment.

3. Unemployment rate (July 5): It is expected to remain steady at 4.0%. Any deviation could influence market perceptions about economic stability and future Fed policy actions.

4. Hourly Wage (July 5): An increase of 0.3% is forecast in June, down from 0.4% in May. Year-over-year salary growth will also be monitored. Higher wage growth could fuel inflation fears, impacting Fed decisions and market dynamics, including crypto.

Impact of US Trade Deficit Data on Cryptocurrency

On July 3, US trade deficit data for May will be released. April saw an 8.7% increase to $74.6 billion. A growing deficit could signal economic challenges and potentially deter investment in high-risk assets such as cryptocurrencies. On the other hand, a decreasing deficit could increase investor confidence and positively impact the cryptocurrency market.

Speech by Fed Chairman Jereme Powell in Portugal

Chairman of the Federal Reserve Jerome Powell and other key Fed officials are scheduled to participate in meaningful discussions at the European Central Bank Forum on Central Banks in Sintra, Portugal. Additionally, an event will be held in India. On July 2, Powell will participate in a policy panel at the ECB Forum.

The panel will focus on monetary policy in an era of transformation. Furthermore, this panel is expected to address pressing issues such as inflation trends and the economic impacts of geopolitical shocks. On the same day, ECB board members will chair sessions on euro area inflation and the economics of biodiversity.

On July 3, the forum will feature remarks from ECB President Christine Lagarde and a panel discussion on the drivers of equilibrium interest rates. It will also include John Williams, president of the Federal Reserve Bank of New York.

Following these events, John Williams will deliver a speech in India on July 5 at 5:30 a.m. ET. Earlier, he indicated that he sees no urgency for rate cuts in the near term, despite cooling inflation data. These speeches and debates will provide critical insights into the Fed’s outlook on inflation, interest rates, and global economic trends.

Read too: Bitcoin Price To $65k Or $55k After US PCE Data? IMF asks Fed to delay rate cuts

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