Markets
Ethereum ETF, FOMC Minutes, US Jobs Data, and Trade Deficit
THE cryptocurrency market is gearing up for a week full of significant events and data releases that could influence investor sentiment and market movements. Key highlights include the delay in the launch of Spot Ethereum ETFs and the implementation of the European Union’s MiCA regulation.
Additionally, the market is also gearing up for the release of the minutes from the Federal Reserve’s June meeting. Additionally, the week will see US employment data and trade deficit figures. Each of these events has the potential to impact the volatile cryptocurrency market, making it crucial for investors to stay informed.
Ethereum ETF launch delayed
The planned launch of Spot Ethereum ETFs has been postponed again by the U.S. Securities and Exchange Commission (SEC). Analysts such as Eric Balchunas and James Seyffart of Bloomberg had estimated around July 2. However, the SEC has released additional comments on the S-1 forms filed by issuers.
The SEC has now requested that the forms be resubmitted by July 8, pushing the potential launch date back to mid- or late-July. Earlier, SEC Chairman 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 negotiations could begin within 14 to 21 days of the new submission. This delay adds uncertainty to the market, but a successful launch could provide a significant boost to the market Ethereum Price
and overall market sentiment. Therefore, this week could see S-1 amendments from BlackRock, VanEck, Grayscale, 21Shares, Fidelity and other issuers.
Implementation of MiCA Crypto rules in the EU
The European Union’s Markets in Cryptocurrency Regulation (MiCA) will come into force on June 30. It will introduce one of the first comprehensive regulatory frameworks for cryptocurrency trading in a major financial market. However, a recent study by Acuiti and Eventus reveals that 91% of affected companies are not prepared for MiCA requirements.
Therefore, this regulatory implementation is expected to reshape the industry. This highlights the urgent need for companies to accelerate their compliance efforts. Therefore, cryptocurrency companies that fail to adapt could face significant operational and financial consequences.
It could potentially lead to market disruption and volatility in the short term. However, in the long term, MiCA aims to improve market stability and investor protection, which could encourage greater institutional participation in the cryptocurrency market.
Read also: US SEC Delays Launch of Spot Ethereum ETF, Returns S-1 Forms
Minutes of the June FOMC meeting
The Federal Reserve will release the minutes of its June meeting on July 3. Federal Open Market Committee (FOMC) meeting at 2 p.m. ET. Additionally, the minutes will provide insights into the Fed’s decision-making process, particularly when it comes to interest rates. Additionally, a pause on rates is expected to continue as Fed Governor Michelle Bowman indicated that rate cuts are unlikely before 2025 despite recent cooling inflation data.
Any hint of a hawkish stance could weigh on the cryptocurrency market, as higher interest rates typically reduce the attractiveness of riskier assets like cryptocurrencies. On the other hand, signs of prolonged rate stability or dovish sentiment could support market sentiment and cryptocurrency prices.
US jobs data for May and June
THE Data on the American labor market will be closely followed this week. It will see multiple releases that will provide a comprehensive view of employment trends:
1. Job offers data (July 2): The May figure, with an estimated 7.860 million vacancies, follows April’s 8.059 million. A higher-than-expected figure could indicate a robust labor market, which could lead to concerns about inflationary pressures and more hawkish Fed policies, which could negatively impact the cryptocurrency market. Conversely, a lower figure could alleviate these concerns, supporting cryptocurrency prices.
2. Employment Report (July 5): The June employment report is expected to show 195,000 new jobs, down from 272,000 in May. A higher number could signal economic strength but could also raise inflation concerns, while a lower number could dampen economic growth prospects, affecting market sentiment.
3. Unemployment rate (July 5): It is expected to remain steady at 4.0%. Any deviation could affect the market’s perception of economic stability and future policy actions by the Fed.
4. Hourly wage (July 5): It is expected to rise 0.3% in June, down from 0.4% in May. Annual wage growth will also be monitored. Higher wage growth could fuel inflation fears, influencing Fed decisions and market dynamics, including cryptocurrencies.
Impact of US Trade Deficit Data on Cryptocurrencies
US trade deficit data for May will be released on July 3. April saw an increase of 8.7% to $74.6 billion. A widening deficit could signal economic challenges and potentially discourage investments in high-risk assets such as cryptocurrencies. Conversely, a declining deficit could boost investor confidence and have a positive impact on the cryptocurrency market.
Speech by Fed Chairman Jereme Powell in Portugal
Chairman of the Federal Reserve Jerome Powell and other key Fed officials are scheduled to participate in meaningful discussions at the European Central Bank Forum on Central Banking in Sintra, Portugal. An event will also be held 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. In addition, this panel is expected to address pressing issues such as inflation trends and the economic impacts of geopolitical shocks. On the same day, ECB Governing Council members will chair sessions on euro area inflation and the economics of biodiversity.
On July 3, the forum will feature remarks by 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 be speaking in India on July 5 at 5:30 a.m. ET. Earlier, he said he sees no urgency for rate cuts in the near term, despite the cooling inflation data. These speeches and discussions will offer critical insights into the Fed’s outlook on inflation, interest rates, and global economic trends.
Read also: Bitcoin Price at $65k or $55k after US PCE Data? IMF asks Fed to delay rate cuts