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Ethereum ETF, FOMC Minutes, US Job Data & Trade Deficit

Published

8 months ago

June 30, 2024

Coin2049 Newsletter

The crypto market is bracing for a week filled with significant events and data releases that could sway investor sentiment and market movements. Key highlights include the delay in the launch of Spot Ethereum ETFs, the implementation of the European Union’s MiCA regulation.

Moreover, the market also braces for the release of the Federal Reserve’s June meeting minutes. In addition, the week will see U.S. job data, and trade deficit figures. Each of these events holds the potential to impact the volatile crypto market, making it crucial for investors to stay informed.

Ethereum ETF Launch Delayed

The anticipated launch of Spot Ethereum ETFs has been delayed once again by the U.S. Securities and Exchange Commission (SEC). Analysts such as Bloomberg’s Eric Balchunas and James Seyffart had estimated around July 2. However, the SEC issued additional comments on the S-1 forms submitted by the issuers.

The SEC has now requested that the forms be resubmitted by July 8, pushing the potential launch date to mid or late July. Earlier, SEC Chair Gary Gensler confirmed that the Ethereum ETF approval process is progressing smoothly for all issuers. While the delay leaves the Ethereum market in FUD, ETFstore President Nate Geraci noted that the revisions were light.

He suggested that trading could commence within 14-21 days after resubmission. This delay adds uncertainty to the market, but a successful launch could provide a significant boost to the Ethereum price and overall market sentiment. Hence, this week could see S-1 amendments by BlackRock, VanEck, Grayscale, 21Shares, Fidelity, and other issuers.

MiCA Crypto Rules Implementation In EU

On June 30, the European Union’s Markets in Crypto Assets Regulation (MiCA) is set to take effect. It will introduce one of the first comprehensive regulatory frameworks for crypto trading in a major financial market. However, recent study by Acuiti and Eventus reveals that 91% of affected firms are not prepared for MiCA’s requirements.

Hence, this regulatory implementation is expected to reshape the industry. This emphasizes the urgent need for companies to accelerate their compliance efforts. Therefore, crypto firms that fail to adapt could face significant operational and financial consequences.

It could potentially lead to market disruptions and volatility in the short term. However, in the long run, MiCA aims to enhance market stability and investor protection, which could foster greater institutional participation in the crypto market.

Also Read: US SEC Delays Spot Ethereum ETF Launch, Sends Back S-1 Forms

FOMC June Meeting Minutes

On July 3, the Federal Reserve will release the minutes from its June Federal Open Market Committee (FOMC) meeting at 2 p.m. ET. Moreover, the minutes will provide insights into the Fed’s decision-making process, particularly regarding interest rates. Furthermore, a rate pause is expected to continue as Fed Governor Michelle Bowman indicated that rate cuts are unlikely before 2025 despite recent cooling inflation data.

Any hints of a hawkish stance could weigh on the crypto market, as higher interest rates typically reduce the appeal of riskier assets like cryptocurrencies. On the flip side, indications of prolonged rate stability or dovish sentiment could support market sentiment and crypto prices.

U.S. Job Data For May & June

The U.S. labor market data will be closely watched this week. It will see multiple releases providing a comprehensive view of employment trends:

1. Job Openings Data (July 2): The May data, with an estimate of 7.860 million job openings, follows April’s 8.059 million. A higher-than-expected figure could indicate a robust labor market, potentially leading to concerns about inflationary pressures and more hawkish Fed policies, which could negatively impact the crypto market. Conversely, a lower figure might alleviate these concerns, supporting crypto prices.

2. Employment Report (July 5): The June employment report is forecasted to show 195,000 new jobs, down from May’s 272,000. A higher number could signal economic strength but may also raise inflation worries, while a lower number could dampen economic growth prospects, affecting market sentiment.

3. Unemployment Rate (July 5): Expected to remain steady at 4.0%. Any deviation could influence market perceptions of economic stability and future Fed policy actions.

4. Hourly Wages (July 5): Forecasted to rise by 0.3% in June, down from 0.4% in May. Year-over-year wage growth will also be monitored. Higher wage growth could stoke inflation fears, impacting Fed decisions and market dynamics, including crypto.

U.S. Trade Deficit Data Impact On Crypto

On July 3, the U.S. trade deficit data for May will be released. April saw an 8.7% increase to $74.6 billion. A widening deficit could signal economic challenges and potentially deter investment in high-risk assets like cryptocurrencies. Conversely, a narrowing deficit might boost investor confidence and positively impact the crypto market.

Fed Chair Jereme Powell’s Speech In Portugal

Federal Reserve Chair Jerome Powell and other key Fed officials are scheduled to participate in significant discussions at the European Central Bank Forum on Central Banking in Sintra, Portugal. In addition, an event will be conducted in India. On July 2, Powell will join a policy panel at the ECB Forum.

The panel will focus on monetary policy in an era of transformation. Moreover, this panel is expected to address pressing issues like inflation trends and the economic impacts of geopolitical shocks. The same day, ECB board members will chair sessions on inflation in the euro area and the economics of biodiversity.

On July 3, the forum will feature remarks from ECB President Christine Lagarde, and a panel discussion on the drivers of equilibrium interest rates. It will also include John Williams, President of the Federal Reserve Bank of New York.

Following these events, John Williams will deliver a speech in India on July 5 at 5:30 a.m. ET. Previously, he has indicated that he sees no urgency for rate cuts in the near term despite cooling inflation data. These speeches and discussions will offer critical insights into the Fed’s outlook on inflation, interest rates, and global economic trends.

Also Read: Bitcoin Price To $65k Or $55k After US PCE Data? IMF Asks Fed To Delay Rate Cuts