Cryptocurrency Market News: Bitcoin Rises Again, New Stablecoins On The Block

Bitcoin (BTC) shook off last week’s jitters and briefly traded above $72,000 on Monday—an indication that the rally has far from stalled ahead of its fourth halving later this month.

Stablecoins were in focus last week with VanEck and Ripple Labs getting involved in new offerings. Also, a jury in New York found Terraform Labs and its founder, Do Kwon liable for civil fraud charges.

Bitcoin Rising Again, Closing The Gap With $73,000 High

What a wild ride it has been for bitcoin investors. After soaring past an all-time high of over $73,000, the cryptocurrency fell to trade close to $60,000 in the past month.

Bitcoin is currently trading at levels it saw at the beginning of last week, but had to find its way back after falling sharply to trade below $65,000 before gaining ground and ending last week in green.

Although the spot bitcoin exchange-traded funds (ETFs) saw strong outflows of $85.7 million on the first day of the month—largely due to more than $300 million in outflows from Grayscale Bitcoin Trust (GBTC)—flows rose reversed to end the week at $484.5 million of net inflows, according to Farside Investors.

The recent rise in the bitcoin price comes as the next halving event is expected to occur in less than two weeks. Notably, several recent reports indicated any potential effect of the halving on the bitcoin price could be overshadowed by the supply and demand dynamics of the spot bitcoin ETFs.

Additionally, Tether (UST), which is the issuer of the world’s largest and most popular stablecoin, added 8,888 bitcoin (currently worth around $640 million) to their reserves during the first quarter of the year. The company’s bitcoin address is now the seventh largest on the network in terms of holdings with more than $5 billion worth of bitcoin held in it, according to The Block.

VanEck and Ripple Involved in New Stablecoin Offerings

Speaking of stablecoins, there may be some new offerings on the block soon.

Fintech company Agora raised $12 million ahead of launching its stablecoin offering Agora digital dollar (AUSD), which will have reserves backing managed by VanEck. While VanEck already operates a bitcoin ETF—VanEck Bitcoin Trust (HODL)—this new offering expands its bet on cryptocurrencies. For Agora, the product leverages VanEck’s investment expertise as well as familial ties. Agora founder Nick van Eck is the son of VanEck CEO Jan van Eck.

Ripple Labs, the company behind the XRP token (XRPUSD), also announced its venture into the stablecoin market with a U.S. dollar-backed digital currency aimed at enhancing the synergy between cryptocurrencies and conventional financial systems. This initiative is designed to inject more liquidity and foster increased adoption of the XRP Ledger, especially when it comes to decentralized finance (DeFi) applications. Ripple’s stablecoin offering will be backed by assets such as U.S. dollar reserves and short-term Treasury bills, and it will also be made available on Ethereum at launch.

Do Kwon and Terraform Labs Found Liable for Fraud

A New York jury took roughly two hours to decide that Terraform Labs and its founder, Do Kwon, were liable for defrauding investors in a civil lawsuit brought by the U.S. Securities and Exchange Commission (SEC).

The SEC alleged the company and Kwon had provided misleading assurances about the reliability of their algorithmic stablecoin UST, which was central to the Terra ecosystem’s dramatic $40 billion collapse in May 2022.

The SEC’s litigation pointed out Terraform Labs and Kwon had painted an overly optimistic picture of UST’s stability mechanism and the Terra blockchain’s functionalities to investors, especially its price stability which was artificially propped up by an unnamed, U.S.-based trading firm on at least one occasion.

This is the second big outcome of cryptocurrency fraud-related litigation in the past few weeks. Former FTX CEO Sam Bankman-Fried, who was also one of the darlings of the previous crypto market bubble, was sentenced to 25 years in prison on fraud-related criminal charges on March 28.

What to Expect in the Markets This Week

Precedent suggests a run up in bitcoin prices after the halving, but that’s no guarantee of performance this time around. However, one thing’s for certain. Investors need to buckle up and brace for volatility in the short-term even if there could be gain opportunities over time.

Investors use implied volatility to gauge market sentiment around prices in the future. For bitcoin options contracts with different expiration dates, that measure spiked higher over the past weekend, reversing course from earlier in the prior week, according to Kaiko research.

Implied volatility for “expiries in the next two weeks has increased the most, from 59% to 71% in the span of just two days. This suggests that expectations for near-term volatility are rising,” analysts at Kaiko wrote in a note Monday, blaming the uncertainty on bitcoin ETF demand.

Crypto market analysts will be tracking spot bitcoin ETF inflows closely this week, as the outflows from GBTC are expected to slow due to selling related to Genesis’s bankruptcy proceedings coming to an end, according to Bloomberg analyst James Seyffart. March was by far the strongest month on record so far in terms of spot bitcoin ETF inflows, and the first week of April did not indicate the inflows are going to stop anytime soon, according to another Bloomberg ETF analyst Eric Balchunas.

Another potential effect on the market this week will be the more than $2 billion in bitcoin related to a hack of long-defunct darknet marketplace Silk Road that was sent to Coinbase (COIN) by the U.S. government. It’s unclear what’s happening with these funds, but it’s possible they could provide downward pressure on prices if the coins are sold.

Price action is also likely to liven up around the upcoming halving; however, it’s unclear if it could end up being a “sell the news” situation in the immediate aftermath of the event.