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Recession fears continue to loom over the markets as investors adopt a risk-off attitude across most asset classes. With the war in Ukraine in the background, inflation, energy costs, and supply chain instability continue to be major concerns.
Along with inflation come higher interest rates, and a 0.50% hike is expected in this week’s Federal Reserve meeting. Many analysts are now predicting a 0.75% hike for June. Stocks have lost 8.9% over the month, while Bitcoin is down 16.8%, and Fed hikes may put downward pressure on both assets.
The crypto world suffered another hack when DeFi platform Rari Capital saw $77 million worth of digital coins stolen by hackers. Rari Capital and Fei Protocol are in the process of a merger, news of the hack came from Rari Capital Twitter account.
The online crypto lending platform also offered a $10 million bounty if the hackers give back the rest of the stolen coins. The news comes on the heels of a hack in February of $320 million from another DeFi network.
Bitcoin investors, who are turning away from risky assets in this current moment of uncertainty, are going to be put off even further by negative security news. However, not all cryptocurrencies are on the downside. ENS is up 36.5% over the past 7 days, just to mention one of many altcoins that are rallying.
On a positive note, cryptocurrencies continue to find acceptance among Wall Street firms. Goldman Sachs announced it will offer Bitcoin-backed loans. The Investment and banking firm will lend cash to borrowers who own Bitcoin as collateral.
Jefferies Financial Group Inc. is in the process of increasing its banking services for crypto clients. While BlackRock Inc. participated in a $400 million financing round of the stablecoin firm Circle. In a move to get cryptocurrencies out of the strict reach of the SEC, lawmakers from both sides of the aisle are proposing a bill to turn digital assets under the supervision of the CFTC.
This move is of particular interest as it may pave the way for approval of spot Bitcoin funds that investors have been calling on for some time. The SEC has been reluctant to approve any physical Bitcoin funds stating concerns for investor safety.
However, spot Bitcoin funds are available in other countries. Last year Fidelity launched a spot Bitcoin ETF in Canada. While it is still awaiting approval from the SEC for its spot Bitcoin fund in the US. April also saw the approval of another futures Bitcoin fund from Teucrium. The approval comes with rules that some feel may apply to spot Bitcoin ETFs.
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