Bitcoin and Ethereum prices fell this week amid reports that Kraken has settled with the US Securities and Exchange Commission and will no longer offer its staking product as a service to companies without regulatory approval.
Kraken’s SEC Settlement: A Warning for Exchanges or an Opportunity for Decentralized Alternatives?
The outcome of Kraken’s settlement with the Securities and Exchange Commission (SEC) has significant implications for the cryptocurrency industry. The SEC announced Thursday that Kraken, a cryptocurrency exchange, will pay a $30 million fine for failing to register the offering and sale of its cryptocurrency placement program as a service.
Prior to this announcement, Coinbase CEO Brian Armstrong warned on Twitter that he had received information that the “SEC intends to eliminate cryptocurrency betting for retail customers in the United States.”
At first glance, the news of the settlement between Kraken and the SEC seemed like a negative development for all crypto staking services. However, the market’s reaction suggests that only centralized exchanges like betting intermediaries, such as Kraken and Coinbase, have cause for concern. Management tokens for Lido and Rocket Pool, two of the largest combined steakhouses, have risen up to 11% over the past day.
Stakeholders play a crucial role in proof-of-stake networks like Ethereum, ensuring the network’s stability. Retail investors who cannot become standalone Ethereum validators due to high entry barriers are turning to staking as a service providers and pools.
Liquid staking, which allows the use of tokenized and tradable stake assets, grew to $12 billion, or 26%, of the $47 billion DeFi ecosystem. Lido, the largest protocol that supports ETH staking, accounts for $8 billion, or 75% of deposited funds.
The SEC’s complaint against Kraken highlighted the oversimplification of the rate to appeal to retail customers. Kraken set the earnings for its customers, while the variable reward rate was to be determined by the protocol.
Robinhood’s Crypto Revenue Drops 25% in Q4: What Does This Mean for Crypto Traders?
Revenue from Robinhood’s bitcoin business fell 25% compared to the previous quarter (Q4). Founded in 2013, the company is best known for its stock trading program, which it expanded into cryptocurrencies in 2018. Due to this, it quickly gained popularity as the main place to exchange digital currencies such as Bitcoin and Ethereum.
Revenue is falling for several reasons, one of which is the general slowdown in the Bitcoin industry. The high volatility of cryptocurrency prices in 2022 has resulted in reduced trading and reduced profits for exchanges such as Robinhood. In its presentation to the board of investors, the company claimed to have earned almost $82 million (EBITDA).
The fourth quarter was not successful, as a loss of $166 million was reported. Therefore, earnings per share decreased by $0.20. The loss was smaller than the $0.20 drop in earnings per share expected in the third quarter of 2022.
Robinhood CEO Vladi Tenev believes in the future of cryptocurrencies like Bitcoin and will continue to offer his clients access to these “fast-growing assets.”
Given the ongoing tension in the cryptocurrency market, Bitcoin and Ethereum prices are falling and continue to trade in a sell zone.
Bitcoin price
The current price of Bitcoin is $21,682 and the 24-hour trading volume is $24 billion. Bitcoin is down less than 1% in the last 24 hours. With a real market capitalization of $418 billion, CoinMarketCap is currently ranked #1.
On Saturday, Bitcoin broke through the major support area of $21,875, and a candle close below this level raises the possibility of a BTC sell trend. A bullish breakout of the $21,875 level could send the BTC price to the next resistance level of $22,300 or $22,850.
On the other hand, failure to break below the $21,750 level could extend the downtrend towards the $21,200 level. Further below, BTC’s immediate support is at $21,200, and a break below this level could potentially send BTC price down to $20,600.
Ethereum price
The price of Ethereum is $1,518 and the 24-hour trading volume is $7.5 billion. ET is down nearly 2% in the past 24 hours and ranks second on CoinMarketCap with a market cap of $185 billion.
On the technical front, Ethereum is trading just above the double support level at $1,500. Close candles above $1,500 could lift the uptrend to the $1,560 level.
This resistance level is due to the ascending channel that was previously broken on Friday. A break above $1,560 could put BTC at $1,600 or $1,680.
On the other hand, failure to break above the $1,560 level could keep the BTC price bearish and increase selling pressure, triggering a bearish break below the $1,510 level leading to the $1,435 level.
