Clapp Weekly: US reserve pump, macro fears, Kraken case dropped
Price dynamics
BTC price
BTC has clocked the worst monthly return since June 2022, ending February at -17.39%. Although volatility continues, strength in BTC derivatives suggests that whales expect a limited price decline. Plunging Treasury yields also offer hope.
BTC see-sawed, slipping from $88k last Wednesday, February 26, and bottoming out at $78,940.44 on the last day of the month. It held firm over the weekend, climbing above $85k, and surged to a high of $94,770.10 on Monday, March 3, before sharply retreating below $83k.
Currently priced at $87,589.31, BTC is up 4.6% in the last 24 hours but remains down 1.6% over the past 7 days.
ETH price
Whale accumulation and Trump's reserve plan fueled a rebound on Monday after a dramatic February loss (-31.95%). Ether's position "at the heart" of the stockpile could lead to future regulatory clarity and institutional acceptance. However, macro concerns quickly triggered a lower low.
ETH nosedived from $2.5k early in the week, slipping to $2.1k on Friday, February 28. It then recovered slightly, climbing above the $2.2k mark before Monday's surge to $2,542.79. However, the rally was short-lived — a sharp decline followed, pushing ETH to yesterday's low of $2,055.11.
Changing hands at $2,171.37 at press time, ETH is up 5.0% in the last 24 hours but down 12.9% over the past 7 days amid the ongoing pressure.
Seven-day altcoin dynamics
XRP (+8.4%) flipped ETH by fully diluted value as Trump’s Truth Social post about a crypto reserve ignited a crypto firestorm (more below). The announcement sparked a $300 billion global crypto rally Sunday as reduced weekend order book liquidity ensured swift gains.
Yet the momentum faltered late Monday as tariff fears and inflation concerns overtook the hype. BTC fell 9% to below $86k, and major tokens followed suit, with ETH down 15%, XRP and ADA losing 17%, and SOL plunging 18%.
Fiscal cuts, trade uncertainties, and a weakening housing market could slow down US economic growth. Crypto prices have also fallen in line with stocks — on Monday, the Dow, S&P 500, and Nasdaq all fell amid the macro unease. Top AI stock Nvidia slid by more than 6% on the day.
Winners & losers
ADA (+39.9%) has led the pack, driven by growing network activity, whale transactions, and optimism surrounding the potential launch of a Cardano ETF. Speculation about Cardano tracking government spending through Elon Musk's DOGE added to the bullish momentum.
HBAR (+24.9%) followed, fueled by Grayscale Investments' efforts to launch a Hedera ETF and secure a Nasdaq listing. Meanwhile, BCH (+17.1%) broke past the $300 level following CME Group's move to list SOL ETFs. Yet the rally may face challenges as miners continue to offload their reserves.
In stark contrast, S (-26.7%) is sinking after a surge sparked by a 'sonic bounce' post amid increased active addresses and community engagement. TAO (-24.3%) is weighed down by bearish sentiment, although technical indicators suggest a potential reversal.
LDO (-23.3%) is also struggling, as the broader downturn eclipses the positive impact of its V3 upgrade, extending a downtrend that began in early February.
Cryptocurrency news
Trump announces crypto stockpile, markets react with volatility
On Sunday, Trump took to Truth Social to reveal that the reserve would include Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA). While he had previously promised to bolster the US crypto industry, this was the first time he named specific assets.
The news initially triggered a surge in crypto prices, with Bitcoin climbing above $94k early Monday, rebounding from recent losses. However, the momentum was short-lived.
Trump has long expressed ambitions to make the US the “crypto capital of the planet.” In January, he signed an executive order establishing a presidential working group on digital assets, which is tasked with exploring the feasibility of a national crypto stockpile. The group is also expected to determine whether assets seized through law enforcement efforts could contribute to the reserve.
Trump could provide further details during a crypto summit on Friday. David Sacks, Trump’s AI and crypto czar, has noted that discussions are in their early stages — it is still unclear how the stockpile would function or if it would require congressional approval.
Lately, Sacks has also endorsed legislation aimed at repealing a Biden-era rule that would impose strict IRS reporting requirements on DeFi projects. This rule, which has not yet taken effect, threatens to effectively eliminate the sector by enforcing Wall Street broker-level compliance standards on permissionless protocols.
Meanwhile, Senator Cynthia Lummis has floated the idea of using a gold reserve-style program to facilitate Federal Reserve's crypto purchases. Her program would call for the Fed to buy more Bitcoin using 1970s-era certificates for gold reserves.
SEC drops lawsuit against Kraken, signaling shift in crypto regulation
After more than a year of legal battles, the U.S. Securities and Exchange Commission (SEC) has agreed to drop its lawsuit against cryptocurrency exchange Kraken. The lawsuit, originally filed in November 2023, accused Kraken of operating as an unregistered trading platform in violation of securities laws.
Kraken welcomed the dismissal, emphasizing that it came without any admission of wrongdoing, penalties, or changes to its operations. Its blog post reads, “The SEC’s decision to dismiss its lawsuit against us (and many others) is more than just a legal victory — it’s a turning point for the future of crypto in the U.S. It ends a wasteful, politically motivated campaign, lifts uncertainty that stifled innovation and investment, and clears the path toward a stable, forward-thinking regulatory regime.”
Kraken’s legal team had long contended that the SEC was overstepping its authority by targeting crypto firms without providing clear guidelines. While a judge had denied Kraken’s motion to dismiss the lawsuit in August 2024, the SEC’s sudden decision to withdraw the case reflects a broader shift in regulatory policy.
In recent months, the SEC has also dropped cases against other major crypto firms, including Coinbase, MetaMask, OpenSea, Gemini, and Robinhood. This trend suggests a move away from the SEC’s previous “regulation by enforcement” approach, which many in the industry criticized for stifling innovation.
The lawsuit’s dismissal comes amid broader changes in U.S. crypto policy. Lawmakers are considering a new stablecoin bill aimed at strengthening the U.S. dollar’s role in digital finance, and speculation is growing about the introduction of a comprehensive cryptocurrency regulation bill.
Kraken’s legal victory signals potential for clearer regulations and a more cooperative approach from regulators. As the SEC steps back from aggressive enforcement under Chair Gary Gensler, crypto firms are optimistic about a more stable and predictable regulatory landscape in the United States.
Yesterday, the SEC also dropped its lawsuit against Cumberland DRW, the crypto trading arm of Chicago-based trading giant DRW. Previously, it filed in court to pause its cases against Binance and the Tron Foundation, including their affiliated executives and companies.
However, not everyone is off the hook yet — Ripple is still locked in a legal battle with the regulator, while its probes into Crypto.com, Immutable, and Unicoin also remain open.
