Key Trends Shaping the Crypto Market Today: Growth, Rules and Adoption

The crypto market has experienced a notable downturn, with a 1.75% drop over the past 24 hours, further extending a 7-day decline of 2.89%. The market’s recent struggles reflect the impact of mixed macroeconomic indicators and heightened volatility driven by derivatives trading. Bitcoin has been trading at an approximate of $113,000, whereas Ethereum (ETH) has been trading around $4,200.

This fall follows a wider span of the market consolidation, with prices staying largely flat both as the bulls and the bears fight. Although there are certain positive long-term forecasts concerning the cryptocurrency space, the short-term perspective is uncertain with multiple macroeconomic forces still having pressure on the industry.

Here’s What Happened to Crypto Market

The U.S. legislators are petitioning the Securities and Exchange Commission (SEC) to hasten the process of facilitating the investment of cryptocurrencies in the 401(k) retirement plans.

On Monday, the letter was sent by a group of nine powerful lawmakers, including House Financial Services Committee Chairman French Hill and Subcommittee on Capital Markets Chairwoman Ann Wagner to SEC Chair Paul Atkins, asking him to help promptly to enable cryptocurrency investment in retirement portfolios.

In the letter , the author cites an executive order issued by the previous President Donald Trump in August 2020, called Democratizing Access to Alternative Assets to 401(k) Investors. This order directed the SEC to open up other types of assets, such as cryptocurrencies, to participant-directed retirement plans.

Bipartisan Efforts to Form Crypto Market Legislation

A group of Democratic senators has expressed its intention to collaborate with Republicans on shaping a digital asset structure bill. The 12 senators, including members from both the Senate Banking and Senate Agriculture Committees, made a statement ahead of an expected vote on cryptomarket legislation pushed by Republican leadership.

Although Republicans hold a majority in both chambers of Congress, they are keen to secure Democratic support for this important piece of legislation. The proposal aims to establish clear guidelines for digital assets and tackle illicit finance.

Among the proposed seven key pillars by the Democrats are the provisions to seal the loopholes in the spot market of non-securities digital assets. They also demand better safeguards of corruption and misuse in the industry and the necessity of a safe and transparent system of the fast-growing market.

Crypto Funds See Robust Inflows Amid Market Growth

On the investment front, the global cryptomarket is seeing strong growth, with cryptocurrency exchange-traded products (ETPs) reaching a new high of $40.4 billion in assets under management (AUM) year-to-date.

According to the CoinShares data, Bitcoin and Ethereum are still leading the pack, as inflows were of $977 million and 772 million, respectively. Solana and XRP were also focused on, with inflows of 127.3 million and 69.4 million.

Bitcoin ETFs have enjoyed remarkable performances registering a fourth week of inflows, raising funds to the tune of 3.9 billion in the past four weeks.

This current movement demonstrates that investors are still hopeful about the crypto industry, even though the short-Bitcoin ETPs are struggling, with outflows amounting to $3.5 billion. Ethereum also recorded high demand with year-to-date values of $12.6 billion being a record.

The favorable trend in the crypto industry can be compared to the move by the U.S. Federal Reserve to reduce the interest rates by 0.25 points which could have been the force behind the recent boom in cryptocurrency investments. Crypto funds have been experiencing 1.9 billion inflows in the last seven days, which is a continuation of the last one week 3.3 billion inflows.