Trump’s memecoin poses risk to bipartisan crypto legislation, says TD Cowen

When to buy and when to sell Bitcoin is a decision that continues to perplex investors to this day. A widening range of factors impact (BTC) price, and developing a methodology for consistently avoiding losses and generating a profit is essential for such a high-volatility asset.

Recently, Bitcoin analyst and Cane Island Digital founder Timothy Peterson shared a cheat sheet encompassing 8 macroeconomic factors that impact Bitcoin price. Let’s take a look at the top 3 metrics to understand how they correlate with Bitcoin price and offer insight into optimal buying and selling opportunities.

US Dollar Index (DXY)

The DXY measures the US dollar value against a basket of major currencies. It is influenced by, among others, interest rates, geopolitics, domestic economic conditions, and foreign exchange reserves held in USD.

A stronger DXY tends to negatively impact Bitcoin's price. Conversely, when confidence in the index wanes, investors turn to risk assets, equities and Bitcoin. This inverse correlation has been observed for years and continued through 2024, as shown in the recent NYDIG research.

Crypto-adjacent apps experienced a significant jump in their respective app store rankings following the launch of U.S. President Donald Trump’s official memecoin, Original Trump (TRUMP).

The TRUMP memecoin was launched on the Solana blockchain Friday night, Jan. 17. The coin quickly reached a valuation of $500 million shortly after launch, then skyrocketed to $75 billion in under 36 hours, with nearly $4 billion in volume traded in its main Meteora liquidity pool.

As a spillover effect of this launch, mainly due to the fact that the president of the United States chose Solana as his preferred blockchain network to launch his coin on, the price of SOL also reached a new all-time high after increasing by over 23% at its peak on the same day.

The TRUMP launch has put Solana in the spotlight, with this kind of attention possibly paving the way for more big names or organizations to pick Solana for similar initiatives.

The launch of an official memecoin tied to the U.S. President himself brought a tsunami of attention into the industry, with mass inflows of people rushing to participate. This was most evident in app store rankings of crypto-related apps, which all saw significant jumps in the 24 hours following TRUMP’s launch.

Phantom, the largest crypto wallet for Solana, was ranked 357th on the U.S. app store on Friday, prior to the TRUMP launch. Just three days later, and Phantom has climbed to 35th overall in the U.S. app store.

Moonshot experienced a similar trajectory. It currently ranks No. 1 in the finance category of the U.S. app store, up from 266th in just three days.

While Phantom and Moonshot were immediate winners from the hype and attention surrounding TRUMP, multiple crypto-adjacent apps have also been riding the wave of increased crypto interest in the past week.

Last Sunday, Coinbase ranked 209th in the U.S. app store. Fast-forward a week, and it currently ranks 32nd, highlighting the increased crypto mindshare in recent weeks.

Meanwhile, in the finance sector of the U.S. app store, from Jan. 14 to the time of writing:

• Kraken has climbed from #315 to #97
• Binance.US climbed from #108 to #47
• Uniswap climbed from #49 to #22
• Coinbase wallet from #34 to #10

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The US Securities and Exchange Commission has taken its first step toward crypto regulatory clarity following former Chair Gary Gensler’s departure on Jan. 20.

According to a Jan. 21 announcement, the agency is creating a crypto task force dedicated to developing a framework for digital assets. The task force will be led by Commissioner Hester Peirce, dubbed “Crypto Mom” for her pro-crypto stance when it comes to regulation.

The task force was announced by Commissioner Mark Uyeda, who is serving as acting SEC chairman until the US Senate confirms the nomination of former SEC Commissioner Paul Atkins to serve the remainder of former Chair Gensler’s term.

“The Task Force’s focus will be to help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously,” said the financial watchdog in a statement.

The task force includes Richard Gabbert and Taylor Asher as chief of staff and chief policy adviser, respectively. The newly formed group plans to host roundtable discussions and gather industry insights on regulatory challenges.

Related: Trump’s first day in office ends with no mention of crypto

According to the SEC, the group will work alongside federal departments and agencies, including the Commodity Futures Trading Commission — now led by Acting Chairman Caroline Pham — as well as state and international regulators.

The SEC has primarily relied on enforcement actions as a means of regulating the crypto industry. Under Gensler and Jay Clayton — the agency’s chairs during Trump’s first term — multiple enforcement actions were brought against crypto firms, some alleging unregistered securities.

The crackdown on crypto firms intensified during Joe Biden’s presidential administration following the collapse of crypto exchange FTX.

Trump’s second term is expected to lay out regulatory pathways for crypto businesses to comply with financial laws, including clearer rules on which tokens are classified as securities and federal agency oversight.

President Trump has been silent on crypto since taking office on Jan. 20. The industry continues to anticipate executive orders tied to his campaign promises, including the potential establishment of a federal Bitcoin (BTC) strategic reserve in the United States.

Bitcoin nemesis Peter Schiff has ruffled the feathers of some Bitcoin proponents by classifying the leading cryptocurrency as a "meme coin."

In his recent social media post, Schiff said that it was "funny" watching cryptocurrency enthusiast Anthony Pompliano trying to define what a meme coin actually is during his recent CNBC interview.

According to Schiff, there is no actual difference between Bitcoin and some popular meme cryptocurrencies.

"So it's a fine line to walk when explaining a meme coin without exposing the same fraud about Bitcoin," he said.

The debate comes amid the growing significance of meme cryptocurrencies within the cryptocurrency ecosystem. Some Bitcoiners, who tend to have more conservative views, have distanced themselves from the recent trend that they believe could be detrimental to the broader industry.

Schiff has been a vocal Bitcoin critic since 2011 when the original cryptocurrency was still relatively unknown.

The prominent financial commentator has repeatedly rejected the idea that Bitcoin could possibly compete with gold.

"Gold is real money. It also says so in the U.S. Constitution. But gold's value comes from the tangible properties that resulted in it becoming money. Bitcoin is fool's gold," he said recently.

He often faces criticism from the community, with Bitcoin advocates arguing that the gold bug is trying to remain relevant by constantly mentioning the cryptocurrency in a negative light.

However, Schiff recently stated that he was "popular" even before the leading cryptocurrency was created.

Ethereum, the largest altcoin by market capitalization, is trading at surprisingly low levels compared to its peers, raising concerns among investors. As the broader crypto market shows signs of strength, Ethereum’s underperformance has sparked fears that this cycle may not deliver the returns many expected from the leading altcoin. Sentiment in the market is shifting, with some questioning whether Ethereum can reclaim its former dominance amid fierce competition from emerging projects.

However, a closer look at key metrics offers a more optimistic perspective. According to the MVRV Pricing Bands chart, Ethereum is still far from its previous all-time high (ATH). This metric, which evaluates the market value relative to realized value, suggests that ETH has significant room to grow in the coming months.

While the current price action may seem discouraging to some, historical data indicates that Ethereum often lags in the early stages of a bull market before catching up with explosive moves. For long-term investors, this could represent an opportunity rather than a setback, as Ethereum’s fundamentals remain strong and its ecosystem continues to expand. As the market anticipates the next phase of growth, all eyes are on Ethereum to see if it can reclaim its leadership role and deliver on its potential.

Ethereum Preparing To Surprise The Market

Ethereum has faced significant challenges over the past month, remaining in a downtrend since mid-December. The cryptocurrency has dropped as much as 29% in less than 30 days, testing the patience of investors as the broader market shows strength while ETH struggles to gain momentum. Trading below key supply levels, Ethereum’s performance has raised concerns about its ability to keep up with the overall crypto rally.

Despite the bleak sentiment, some analysts see Ethereum’s current situation as an opportunity rather than a setback. Top analyst Carl Runefelt recently shared insights on X, pointing to the MVRV Pricing Bands chart as a key indicator of Ethereum’s potential. According to Runefelt, ETH is far from its all-time high (ATH), suggesting significant room for growth. He confidently stated that a $7,000 price target for Ethereum is only a matter of time, given its long-term fundamentals and historical market cycles.

Runefelt also highlighted Ethereum’s readiness to change the bearish sentiment surrounding it. As the second-largest cryptocurrency by market cap, Ethereum’s extensive ecosystem and institutional adoption remain strong drivers for future growth.

For investors with a long-term outlook, Ethereum’s current underperformance could represent a strategic entry point. With sentiment poised to shift and key metrics signaling room for growth, ETH has the potential to recover and reclaim its position as a market leader.

ETH Price Testing Key Demand

Ethereum (ETH) is currently trading at $3,302 following days of heightened volatility and sustained selling pressure. Despite the challenging market conditions, ETH has demonstrated resilience by holding above a key demand zone near the 200-day exponential moving average (EMA) at $3,127. This critical level has acted as a strong support, signaling that buyers remain active even amid market uncertainty.

For Ethereum to reclaim bullish momentum, the price needs to break above the $3,520 resistance level with conviction. This move would not only reinforce confidence among investors but also pave the way for further upside. Holding above $3,520 is essential for confirming a shift in market sentiment and establishing a foundation for a sustained rally.

As ETH navigates these pivotal levels, traders are closely monitoring its ability to maintain support and generate upward momentum. A successful push above $3,520 could trigger increased buying activity, potentially setting the stage for Ethereum to resume its uptrend. However, failure to clear this resistance could lead to continued consolidation, delaying a potential recovery. For now, all eyes remain on Ethereum as it tests key technical levels in a bid to regain its position as a top-performing asset in the crypto market.

Featured image from Dall-E, chart from TradingView.

The US Department of Government Efficiency (DOGE), a temporary organization established via executive order by President Donald Trump, has faced a flurry of legal challenges following Inauguration Day.

On Jan. 20, Cointelegraph reported that DOGE was being sued by the nonprofit law firm National Security Counselors for allegedly violating the Federal Advisory Committee Act (FACA), which governs federal committees to ensure public involvement in the process.

As reported by The Intercept, DOGE is also being sued by ethics watchdog Citizens for Responsibility and Ethics and consumer protection group Public Citizen. Meanwhile, Politico reports that the Center for Biological Diversity, a nonprofit membership organization, has also filed suit against DOGE.

Citizens for Responsibility and Ethics appears to have filed the lawsuit alongside several other organizations, including the American Public Health Association, American Federation of Teachers, and Minority Veterans of America.

“The lawsuit seeks a ruling that the establishment of DOGE is unlawful, and for the court to force DOGE to comply with the transparency, ethics, records retention and equal representation required under FACA,” Citizens for Responsibility and Ethics said, adding:

The lawsuits also take issue with DOGE being referred to as a government department, a designation that requires congressional approval.

As Politico reported, the lawsuit filed by the Center for Biological Diversity “seeks all records from the Office of Management and Budget relating to DOGE.”