It’s Wednesday and your good old mates are here with another Cipher Digest, some cold beers and a copy of stepbrothers on blu ray.

What else could you ask for?

Let’s not waste any more time…

Here’s what’s on today’s agenda:

1. Latest Web3 News 📰

2. The USA and regulation 😮‍💨

3. Fed Crashes the Market 📊

4. Crypto Market Breakdown 🧐

5. Tweet of the Day 🐦

Latest Web3 News

— BTC supply on exchanges drops to 2018 lows

— Uniswap upgrades to v4

— Judge rejects SEC’s request to freeze Binance US assets

— US inflation cools to 4% annual rate

— Polygon unveils “Polygon 2.0” and value layer upgrade

When Regulate Bro? 📰

All of the chat in crypto has been surrounding the SEC and US gov. The market revolves around them (like they think the world does), and we have to follow.

Let’s take a look into whats been going on in the regulatory landscape for crypto over the past week:

1/ The Hinman documents have been FREED

Legal battles are like coconuts, bust them open and theres juice everywhere…anyways…

The Ripple vs. SEC coconut has been cracked wide open.

And guess what?

There are ALL kinds of things in question in the Hinman documents. Remember William Hinman, the former director of the SEC?

Back in 2018, he made a famous speech suggesting that cryptos like BTC and ETH were not securities. Now, the internal documents from that speech have been released, and here's the scoop: While the SEC has denied involvement and claimed it was Hinman's personal opinion, the Hinman documents tell a different story. They reveal that many SEC officials had a say in the speech and believed it was meant to provide market guidance. This revelation discredits the SEC and shows they're clueless when it comes to regulating crypto.

One day, a cryptocurrency is considered a security, and the next day, it's not. Talk about inconsistency!

Overall, this is a small victory for the crypto industry in its battle against the SEC. Score one for the good guys!

2/ Binance.US dodges the asset freeze bullet!

Last week, the SEC tried to freeze Binance.US' assets by filing a temporary restraining order. They suspected some mingling of customer funds by CZ (Binance's CEO) and the gang and wanted to put a stop to any financial moves. But guess what?

The plot thickens! Judge Amy Berman Jackson swooped in and temporarily denied that restraining order. Phew, close call for Binance.US!

Now, what's next?

The judge has instructed the SEC and Binance.US lawyers to get their act together and negotiate some limits for the company. Oh, and Binance.US better have their business expenses ready to present to the court. We'll be expecting a status update by Thursday. So, while it's a temporary win for Binance.US, the future is still a bit hazy, especially since they recently shifted to being a crypto-only exchange after parting ways with their banking partners.

3/ Crypto takes the congressional spotlight!

The U.S. Financial Services Committee recently held a hearing that had everyone on the edge of their seats.

The event was titled "The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem." 

Sounds pretty important, right? You bet!

During this marathon-like five-hour hearing, they covered a wide range of topics, from the shiny new stablecoin bill to discussions on how the digital market should be structured and regulated. We even had some VIP guests in the house, including Jeremy Allaire, the CEO of Circle, and the one and only Emin Gün Sirer, the CEO of Ava Labs (seriously, that name is the epitome of cool).

Now, don't worry, I won't bore you with all the nitty-gritty details of the debate. Instead, let's cut to the chase:

There are some members of Congress who want to keep the crypto innovation fire burning in the good ol' U.S. of A. They understand the need for laws and regulations to protect investors, but they don't want to snuff out the crypto industry altogether. And here's the jaw-dropper: Both Republicans and Democrats are actually working together on this one. Who said bipartisanship was dead?

Overall, it was a mighty fine day for the world of crypto. Congress showed some love for the future of digital assets, the SEC stumbled with the Hinman documents, and Binance.US managed to sidestep that pesky asset freeze. Stay tuned, my fellow crypto enthusiasts!

Did the Fed Crash the Market?

We've got some breaking news!

The highly anticipated moment has arrived: the Federal Reserve has just made their decision, and guess what? They've decided to keep the rates unchanged.

But hold your horses, because the market isn't exactly throwing a celebration party.

In fact, the market's reaction to this news has been less than stellar. The NASDAQ, in particular, has taken a sharp nosedive and is in a free fall mode. Investors are feeling the heat as the market reacts negatively to the Fed's decision.

For those who have been keeping an eye on our charts, you’ll notice that we have been rejected EXACTLY where we marked our grey resistance zone.

We also mentioned in our last updates that we anticipated a market-wide pullback… HOORAY for Cipher Digest Readers!

We were all hoping for a different outcome, but the cards have been dealt, and we must navigate through these uncertain times.

The S&P 500, which was soaring earlier, has hit a speed bump, and the NASDAQ is feeling the brunt of it. It's like a wild ride turned into a wild nightmare!

But hey, let's not lose hope just yet. The market has its ups and downs, and we've seen it bounce back from tough situations before.

Remember the stock market HAS been on an absolute tear of the past couple weeks, so a pullback like this SHOULD be taken into context.

BTC Update

It seems like BTC is feeling a bit left out while all the stock market chatter steals the spotlight. Yep, you heard it right. Bitcoin has been playing second fiddle to the Nasdaq in recent weeks.

Poor Bitcoin, it's been having a bit of a rough time.

But hey, let's dive into some interesting details. The BTC DVol Index, which measures trading volume for Bitcoin, has seen a slight uptick.

It went from 39 on June 3, which was the lowest level of the year, to 41 on June 5. It's not a huge jump, but it's definitely worth noting. Bitcoin IS making its presence felt, even if it's not grabbing the headlines like the stock market.

Now, let's talk about implied options volatility.

This fancy term basically tells us how much the market expects Bitcoin's price to swing in the future.

Following those SEC lawsuits, we did see a little spike in volatility. It was like a rollercoaster ride! But overall, the volatility levels are still relatively low. It's like Bitcoin is taking a breather before the next big move. Which is the same as what we mentioned in yesterday’s BTC breakdown:

• BTC is currently consolidating at a major support;

• If we see a break below on the 4H timeframe, we expect a larger move down.

And here's an interesting tidbit about seasonality.

Did you know… that summers in the crypto world tend to be a bit mellow?

Yep, historically, things tend to flatten out, and volatility takes a vacation. It's like the calm before the storm, but in this case, it's the calm before the summer sun hits the crypto market.

Tweet of the Day