Markets
Bitcoin climbs but still below $70,000
Key takeaways
- Bitcoin’s price fell last week ahead of inflation and Federal Reserve news, but has not rebounded as much as other risk assets.
- US presidential candidates Donald Trump and Joe Biden continue to show that crypto is a notable election issue.
- Terraform Labs has agreed to a $4.5 billion settlement with the SEC.
- Binance founder Changepeng Zhao is considered one of the 25 richest people in the world.
- This week, crypto analysts are closely watching the Bitcoin price to see if the recent volatility is over.
The past week has been a wild ride for the price of bitcoin (BTC).
The price of Bitcoin fell below $67,000 on Tuesday ahead of May inflation data and the Federal Reserve meeting. Bitcoin regained ground on Wednesday before tumbling again on Friday. While other risk assets, such as stocks, have rebounded on cooler-than-expected inflation data, Bitcoin has failed to recoup losses.
Despite bitcoin’s performance last week, the crypto is having a moment in the US presidential election campaign. Presumptive Republican nominee Donald Trump met with Bitcoin miners last week and a leaked email showed members of President Joe Biden’s administration would meet with members of the crypto community.
Elsewhere, Terraform Labs agreed to a massive $4.5 billion deal with the United States Securities and Exchange Commission (SEC) regarding the TerraUSD stablecoin disaster from 2022and an investigation report concluded that Binance founder and former CEO Changpeng “CZ” Zhao is among the 25 richest people in the world.
Crypto Grows as US Presidential Election Issue
Former President Donald Trump changed his stance on cryptocurrencies during the current election cycle, now actively courting the crypto community to gain an edge over rivals Joe Biden and Robert F. Kennedy Jr.
After meeting with Bitcoin miners at his Mar-a-Lago estate, Trump urged cryptocurrency enthusiasts on his Truth Social platform to “vote for Trump,” positioning himself as an advocate against what he calls ” Biden’s hatred for Bitcoin.”
This new approach follows Trump’s strong criticism of cryptocurrencies during his presidency, where he called them highly volatile and unregulated assets that facilitate illegal activity. But today, Trump’s campaign announced plans to accept cryptocurrency donations, aiming to mobilize a “crypto army” to secure his election victory.
Across the aisle, the Biden administration’s approach to Bitcoin and crypto has been criticized, including with a recent veto on legislation supporting the custody of cryptocurrencies by financial institutions and proposed taxes on Bitcoin mining. According to a report from The Block, Biden is also expected to start accepting campaign contributions via crypto.
According to Bitcoin Magazine, members of the Biden camp will attend a panel discussion on Bitcoin and blockchain next month.
Terraform Labs agrees to $4.5 billion SEC settlement
Last Wednesday, a court filing revealed that Terraform Labs agreed to a settlement of nearly $4.5 billion to resolve an SEC lawsuit. The filing sought court approval for the settlement, which would end a legal battle over the company’s role in the dramatic failure of TerraUSD in May 2022, which resulted in an estimated $40 billion loss for the investors.
The settlement includes approximately $3.5 billion in restitution, more than $460 million in prejudgment interest and $420 million in civil penalties. Former CEO Do Kwon will also personally contribute more than $200 million to Terraform’s bankruptcy and is prohibited from serving as an officer or director of a public company.
The deal, initially reached ahead of a May 29 hearing, aims to impose substantial financial measures and facilitate a rapid recovery for investors. The SEC emphasized that these sanctions are intended to deter future fraudulent activity in the cryptocurrency market. Terraform Laboratories declared bankrupt earlier this year, just before her SEC trial, where she was found guilty of defrauding investors.
Binance founder Changpeng Zhao is considered the 24th richest person in the world
Since his imprisonment, Binance founder Changpeng “CZ” Zhao has seen his net worth increase significantly.
Forbes now estimates Zhao’s fortune at $61 billion, making him the 24th richest person in the world.
This increase comes from its 90% stake in Binance, valued at $33 billion. Zhao resigned as CEO of the company in November 2023 following a plea agreement with the US Department of Justice. Despite the company’s legal challenges and a $4.3 billion fine, Zhao’s personal financial impact was limited to a $50 million fine. Since then, Binance has continued to grow, with its market share increasing from 38% before Zhao’s departure to 42%.
A major asset to Zhao’s wealth comes from his holdings in Binance Coin (BNB). Forbes estimates that it owns around 94 million tokens, or 64% of all BNB tokens. Despite Binance’s legal troubles, BNB surged 100% in 2024, reaching a market cap of $110 billion.
Binance’s 2017 initial token offering was undersubscribed, and forensic analysis indicates that Zhao and Binance retained a significant portion of the unsold tokens. Currently, BNB trades heavily on the Binance platform, and the token’s performance has continued to add billions to Zhao’s net worth, even as he serves his sentence.
What to expect in the markets this week
All eyes are on the price of Bitcoin this week as digital asset investment products, which include U.S.-based Bitcoin ETFs, saw outflows of more than $600 million amid the Bitcoin price decline last week, according to CoinShares.
Despite the drop in prices, the famous bullish bitcoins at MicroStrategy (MSTR) announcement another $500 million convertible note offering with the aim of buying more bitcoin before updating the offering to $700 million later in the week.
While Bitcoin has traded in a relatively tight range this month, the crypto asset has been outperformed by several Bitcoin mining stocks, as noted in a report from JPMorgan. This is believed to be a response to Core Scientific’s recommendations (CORZ) deal with CoreWeave linked to artificial intelligence.
SEC approval of ether spot ETFs now appears to be a question of “when” rather than “if.” SEC Chairman Gary Gensler noted at a Senate hearing last week, the issue will be resolved over the summer. Additionally, Bloomberg analyst Eric Balchunas gives a 50/50 chance that approval will occur by July 2. Prediction market Polymarket puts the odds of trading an ether spot ETF by July 4 at 75%.