Lawmakers put cryptos in sight

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Key insights: It’s a relatively busy week ahead on the economic calendar, with economic indicators from the US and China likely to move the dial. The Republican digital asset market structure bill could pull anti-crypto rhetoric across the aisle. The movement of XRP prices will depend on the sentiment towards the SEC case against Ripple as the release date of the documents related to Hinman’s speech approaches. US and Chinese economic indicators

It’s a busy week ahead on the economic calendar. Following the US employment report, the market will focus on the US service sector. The all-important non-manufacturing ISM PMI will be of interest on Monday. A sharp drop in activity in the service sector would fuel fears of recession.

However, investors should also consider China’s economic data. We saw increased market sensitivity to China numbers as the Chinese economy underwhelmed after the zero COVID policy change.

Caixin services PMI (Monday), trade data (Wednesday) and inflation figures (Thursday) should be considered.

It is a double-edged sword for the crypto market. On the one hand, signs of a hard landing in the US would be bearish. However, on the other hand, a more hawkish Fed would test buyers’ appetites.

According to the CME FedWatch Tool, the probability of an interest rate hike in June rose from 20.4% to 25.3%. A week earlier, the probability of a 25 basis point hike was 64.2%.

June 6 House Agriculture Committee hearing on digital assets

The U.S. Committee on Agriculture will hold a hearing this Tuesday on The Future of Digital Assets: Bringing Clarity to Digital Asset Spot Markets.

Agriculture Committee Chairman GT Thompson will chair the meeting, with the issue of regulation becoming a high priority outside the US administration.

The U.S. crypto regulatory landscape has prompted major crypto players to expand beyond U.S. borders, taking innovation overseas. Ripple and Coinbase (COIN) are among the most prominent names to respond to the anti-crypto rhetoric of US administrations and the regulation-by-enforcement mantra of the SEC.

Ripple Policy Officer Susan Friedman had this to say about Tuesday’s hearing,

While the upcoming HFSC hearing on June 13 is important for crypto, the one to be held next week by the House Committee on Agriculture is just as important. Congressman GT Thompson has been a strong supporter of the call for clarity in this space.

SEC vs. Ripple

Investor interest in the ongoing SEC v Ripple will likely intensify this week. The SEC will release unredacted versions of the infamous documents related to William Hinman’s June 13 speech. Having failed to protect the speech-related materials from public scrutiny, the XRP community remains hopeful for a favorable settlement.

While some consider an outright Ripple win the best outcome, such an eventuality could lead to more years of litigation, with the SEC likely to appeal a Ripple win. In contrast, a settlement would end more than two years of litigation and provide the digital asset space with a clean slate to move forward. We expect a market reaction to any hint of settlement.

XRP is up 8.05% at $0.52143 this week against the crypto market, which is down 1.83% at $1.106 billion.

XRPUSD 040623 Weekly ChartETH Staking Stats and Development Updates

On Thursday, ETH staking inflows hit an ATH of 404,704 ETH, with the net staking balance jumping 422% to a surplus of 400,290 ETH. The new ATH should be a boon for ETH. However, the push failed to put $2,000 on the line.

This week, a further rise in stake inflows and sentiment risk could see ETH return to $2,000 for the first time since May 6.

However, Ethereum network updates will also need to be considered. Ethereum developers are reportedly preparing to launch their next official testnet for EIP 4844, which aims to improve scalability.

ETH joins the broader market in the red this week, dropping 0.83% to $1,893.

ETHUSD 040623 Weekly Chart Democrat Against Digital Assets Market Structure Bill

Following the release of the Digital Assets Market Structure Bill, investors may have to contend with a backlash from the US administration and SEC Chairman Gary Gensler.

Significantly, an increase in anti-crypto rhetoric would test the appetite of buyers. Progress on the digital assets market structure bill will depend on bipartisan support, which remains an unlikely proposition based on recent comments.

US President Joe Biden signed the US Debt Ceiling Suspension Bill into law on Friday, ensuring the US avoids a default on Monday. The administration could redirect its attention to the digital asset space amid growing activity by Republican lawmakers.

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