Bitcoin treads water below USD 22,000 after SEC action on Kraken, Ether falls

Bitcoin was little changed in early morning trading in Asia on a mixed morning for the 10 non-stablecoin cryptocurrencies by market cap. Bitcoin traded below $22,000 after US-based crypto exchange Kraken halted its staking service on Thursday and paid a $30 million fine to the Securities and Exchange Commission (SEC) for failing to register the service. The SEC move sent much of the crypto market down over the weekend. XRP led the losers this morning, while Solana headed higher.

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Fast facts

• Bitcoin fell 0.4% in the past 24 hours to $21,796 at 8 a.m. in Hong Kong, losing 5% over the past seven days to trade in the same price range as nearly a month ago, according to data from CoinMarketCap. Ether fell 1.6% to $1,515, registering a weekly loss of 7.1%.

• Solana retreated 3.1% to $21.48, but is still down 8.5% over the past seven days. The win today follows a report by crypto research firm Delphi Digital as mentioned Solana is the largest non-fungible token (NFT) blockchain after Ethereum, representing 14% of all NFT transactions.

• XRP fell 2.3% to trade at $0.37, a weekly loss of 6%. Ripple Labs Inc., a company whose payment network is powered by XRP, has been engaged in its own legal battle with the SEC since December 2020. The SEC claims that Ripple Labs issued an unregistered security in the form of XRP. The firm said it expects a ruling in the first half of this year, which will bring greater legal clarity to the crypto industry in general.

• SEC Chairman Gary Gensler warned other crypto exchanges to “take note” of the fine on Kraken over its betting service during a Friday appearance on CNBC’s Squawk Box. “Companies like Kraken can offer investment contracts and investment schemes, but they must have full, fair and truthful disclosure … They did not comply with the basic law,” Gensler said.

• However, he was criticized for the move on Kraken by SEC Commissioner Hester Peirce, who called it the action of a “lazy” regulator.

• US stocks had a mixed day on Friday. The Dow Jones Industrial Average rose 0.5% and the S&P 500 rose 0.2%, while the Nasdaq Composite Index ended the day 0.6% lower.

• Investors are positioning for Tuesday’s release of the January consumer price index (CPI) in the United States, a widely used measure of inflation in the economy that is also used by the Federal Reserve to set interest rates.

• Economists expect a 0.4% increase in the CPI for January for an annual decline to 6.2% from 6.5%. Core CPI is expected to grow 0.4% from last month, bringing the annual rate to 5.5%.

• December’s CPI showed prices rose 6.5% year-on-year, down from 7.1% recorded in November, which again showed a steady decline from October’s 7.7% and September’s 8.2%.

• The Fed has raised interest rates several times since last March to tackle inflation, and analysts at CME Group predict a more than 90% chance the Fed will raise rates by another 25 basis points at its meeting next month. US interest rates are currently at 4.5% to 4.75%, the highest in 15 years, and Fed officials have repeatedly indicated they may raise rates to as high as 5%.

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