Weekly Crypto Recap: Notcoin Slumps, Bitcoin ETFs Recover, and Regulatory Actions Abound

Today’s edition of the weekly recap highlights significant events in the cryptocurrency market. Notcoin (NOT) faces a 50% price slump after its airdrop debut, spot Bitcoin (BTC) exchange-traded funds (ETFs) record inflows to recover April’s losses, and the crypto industry witnesses increased regulatory and enforcement actions.

Notcoin Sees 50% Slump After Debut

The Notcoin project debuted with much anticipation. Beforehand, the team announced a close of direct exchange deposits on May 14, with plans to resume deposits after NOT’s listing on May 16. On May 16, the play-to-earn blockchain project airdropped 80.2 billion NOT to miners from The Open Network (TON) community.

The listing occurred shortly after, supported by multiple top exchanges such as Binance, ByBit, Gate.io, and OKX. Upon the listing, NOT slumped by 55% as miners moved to cash in on their allocations. Over 500,000 Notcoin miners and beneficiaries of the airdrop sent 1 billion NOT tokens valued at $6.8 million to a public address belonging to Telegram founder Pavel Durov as a gesture of gratitude.

Spot Bitcoin ETFs Recoup April’s Losses

The spot Bitcoin ETF market began last week on favorable grounds, recording $66 million in net inflows on May 13. Fidelity’s Wise Origin Bitcoin Fund (FBTC) led with $38.6 million in capital inflows. A filing with the U.S. SEC confirmed that the Wisconsin Investment Board holds a combined $162.4 million across the two largest spot Bitcoin ETFs, the Grayscale Bitcoin Trust (GBTC) and the BlackRock iShares Bitcoin Trust (IBIT).

The spot ETF market also witnessed inflows totaling $100 million on the second day of the week. On this day, GBTC saw $50.9 million in outflows, while the ARK 21Shares Bitcoin ETF (ARKB) recorded the highest inflow, worth $133.1 million. Spot ETFs saw another round of net inflows on May 16, totaling $303 million, the largest since May 3. This trend of inflows persisted throughout the week, resulting in five days of consistent inflows. The cumulative figure totaled $948.3 million last week.

Bloomberg ETF analyst Eric Balchunas confirmed that the ETF market saw $1.3 billion in inflows over two weeks, erasing last month’s losses. He predicted this positive trend to continue.

Fate of Ethereum ETF Uncertain

Balchunas also projected that the U.S. Securities and Exchange Commission (SEC) might never approve a spot Ethereum ETF product due to its stance on Ethereum in terms of its status as a commodity or security.

Meanwhile, a report from last week confirmed massive interest in spot Bitcoin ETFs. Vetle Lunde, a K33 Research analyst, disclosed that up to 937 institutions had committed $11 billion in investment toward spot Bitcoin ETFs as of March 31.

Bitcoin Reclaims $67k as the Crypto Market Rebounds

The market recorded a rebound last week, but price action at the start of the week was largely unfavorable. Galaxy Digital CEO Mike Novogratz predicted that Bitcoin could still clinch $75,000 during the consolidation.

After the release of U.S. CPI data on May 15, Bitcoin and the rest of the market staged a comeback. The global crypto market cap spiked to $2.5 trillion on May 16. Bitcoin surpassed $66,000 amid the uptrend, but this rally was not sufficient to present substantial gains to short-term holders. The rebound was further bolstered by reports of CME looking to launch Bitcoin trades.

BTC eventually reclaimed the $67,000 psychological threshold on May 17, for the first time this month. Despite this, Chainlink (LINK) emerged as the top gainer that day. LINK saw a 20% rally on the back of the DTCC partnership. BTC currently trades at $66,576.70 per coin as of May 19.

Global Enforcement Actions

Enforcement efforts rocked the scene last week. Chinese authorities apprehended six people for their connection to an illegal crypto trading scheme worth $300 million. A U.S. court ordered the confiscation of up to 279 cryptocurrency accounts linked to North Korea. The accounts are to be seized and handed over to U.S. authorities, as evidence suggests they are tied to cases of crypto theft.

In the Netherlands, three judges sentenced Tornado Cash developer Alexey Pertsev to 64 months in jail after declaring him guilty. Pertsev appealed the decision, with industry commentators suggesting it is unfair to punish an individual for developing code. The U.S. Department of Justice (DoJ) apprehended two brothers — Anton Pepaire-Bueno and James Pepaire-Bueno — for stealing $25 million worth of crypto assets within a mere 12 seconds. They executed the heist using MEV bots on Ethereum.

The U.S. Senate voted on May 16, voting 60 to 38 in favor of repealing the SEC’s Staff Accounting Bulletin (SAB) No. 121. The resolution, H.J. Res. 109, garnered bipartisan support, with 11 Democrats joining all but two abstaining Republican senators to reject the rule despite Democratic party leaders opposing the resolution.

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