First Mover Asia: Biden’s Tough Talk, Tether’s Bitcoin Bet Not Moving Crypto

PLUS: We really need to see the Hinman emails.

AccessTimeIconMay 18, 2023 at 12:44 a.m. UTC
Updated May 18, 2023 at 3:48 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Good morning. Here’s what’s happening:

Prices: Unfazed by U.S. debt ceiling talks, bitcoin and ether hold steady while Tether and Circle are diversifying reserves to mitigate dollar risks.

Insights: A federal judge denied the SEC's bid to conceal documents related to Hinman's 2018 ether speech, possibly shedding light on the rationale behind this pivotal announcement amidst Ripple's lawsuit. Now, for the sake of the industry, show us the emails.

Prices

1,177
+12.6 1.1%
$27,403
+363.6 1.3%
$1,822
−2.2 0.1%
S&P 500
4,158.77
+48.9 1.2%
Gold
$1,986
−2.4 0.1%
Nikkei 225
30,093.59
+250.6 0.8%
BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)
CoinDesk Market Index (CMI)
1,177 +12.6 1.1%
Bitcoin (BTC)
$27,403 +363.6 1.3%
Ethereum (ETH)
$1,822 −2.2 0.1%
S&P 500
4,158.77 +48.9 1.2%
Gold
$1,986 −2.4 0.1%
Nikkei 225
30,093.59 +250.6 0.8%
BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Crypto Continues to Shrug Off Looming Debt Ceiling, Despite Tether and USDC Diversifying into Bitcoin

Good morning Asia.

Bitcoin and ether stand unwavering, shrugging off the potential turbulence from the U.S. debt ceiling negotiations and its ripple effects on crypto.

Bitcoin is opening the Asia trading day up 1.3% to $27,403, while ether is down 0.1% to $1,822.

In the U.S., debt ceiling negotiations continue, with President Biden declaring that the country will not default on its debt.

On one hand, crypto doesn’t seem to care. With liquidity as tight as it is, it takes a lot to move markets. And this just isn’t it.

But on the other hand, crypto does seem to care. Tether announced Wednesday U.S. Time that it's diversifying its reserves away from government debt and into crypto as it pledged to use around 15% of its profits to buy Bitcoin for its stablecoin reserves. Almost in parallel, Circle said that it is diversifying the reserves supporting its $30 billion USD Coin (USDC), including $8.7 billion in overnight repurchase agreements managed by BlackRock, to fortify against potential U.S. government debt default risks.

Diversification into bitcoin away from the dollar? It’s a maxi’s dream! But bitcoin just isn’t moving on the news.

As the clock moves closer to the debt ceiling deadline, we’ll see if any of this actually moves the needle on crypto.

Biggest Gainers

Asset Ticker Returns DACS Sector
Decentraland MANA +5.4% Entertainment
Polygon MATIC +5.0% Smart Contract Platform
Dogecoin DOGE +3.0% Currency

Biggest Losers

Asset Ticker Returns DACS Sector
Ethereum ETH −0.1% Smart Contract Platform

Insights

Let’s See the Hinman Emails

A federal judge has ruled that the U.S. Securities and Exchange Commission (SEC) cannot seal documents related to former official William Hinman's 2018 speech on crypto and securities in its lawsuit against Ripple.

This is great because it might finally lead to answers to a question that has gone nagging for years.

In 2018, William Hinman, who was serving as the director of corporation finance at the SEC at the time, made a game-changing announcement for the crypto world during a speech at the Yahoo Markets Summit: Ether is not considered a security.

But how did he come to this conclusion? Any speech made by a senior official is heavily shopped around, with plenty of stakeholders giving their opinions.

CoinDesk tried to get the Hinman emails via a Freedom of Information Act request in November.

But the SEC, at the time, withheld emails and notes from the public, arguing they should remain confidential due to privacy concerns and their preparation in anticipation of litigation.

It also noted that the release of the documents would constitute an “unwarranted invasion of personal privacy.”

While we weren’t able to see the contents because of redactions, what we got back was an extensive email thread that revealed that multiple high-ranking SEC officials, including then-Chair Jay Clayton, contributed to the drafting of William Hinman's pivotal 2018 speech on ether's status.

All of this potentially undermines the SEC's claim that the speech was Hinman's personal opinion and not official guidance.

The industry needs to see these emails to understand the thought process behind Hinman’s statement.

SEC officials can come together and offer guidance on Hinman’s speech, so why can’t they give the same guidance to the industry?

Important events.

9:30 a.m. HKT/SGT(1:30 UTC) Australia Employment Change s.a. (April)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Bitcoin (BTC) continued to drift downward, slipping just below $27,000 as investors keep close attention on the debt ceiling negotiations in Washington. Defiance ETFs CEO Sylvia Jablonski and Galaxy Digital global head of trading Jason Urban shared their insights on the current state of the crypto markets. Plus, Pudgy Penguins CEO Luca Netz discussed the NFT brand's latest $9 million funding round. Also, New York University Professor Emeritus Gary Marcus shared his thoughts on artificial intelligence guidelines, following a Senate hearing with OpenAI CEO Sam Altman among those testifying.

Headlines

Tether Says It Will Buy Bitcoin for Stablecoin Reserves Using Realized Profits: The company, which issues the $82 billion USDT stablecoin, reported $1.48 billion of net profits in 2023 Q1 and revealed $1.5 billion in BTC holdings.

Ripple Buys Crypto Custody Firm Metaco for $250M: Metaco will continue to operate as an independent business unit led by CEO and founder Adrien Treccani.

Axie Infinity's Token Jumps 12% After Firm Lists Game on Apple App Store: The dollar value locked in the open futures contracts tied to AXS has surged to its highest since February, signaling an influx of new money into the market.

Dogecoin's Daily Transaction Reached Lifetime Highs After ‘DRC-20’ Tokens Introduced: Transactional volumes on Dogecoin briefly surpassed Litecoin and Bitcoin earlier this week.

Fleeing U.S. Crypto Firms ‘Welcome,’ French Regulator Says: 100-odd companies could be registered in France as the just-agreed MiCA EU crypto legislation beds in, Financial Markets Authority officials said.

Edited by Rosie Perper.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.