BTC and ETH Price Drop: Kraken Crackdown Impacts Market

This week, the prices of Bitcoin and Ethereum went down. This happened after news came out that Kraken had reached a deal with the US Securities and Exchange Commission and would no longer offer its “staking-as-a-service” product to companies without first getting permission from regulators.

BTC and ETH Price Drop

Kraken’s settlement with the SEC: a warning to exchanges or a chance for decentralized alternatives?

The settlement between Kraken and the Securities and Exchange Commission (SEC) will have a big effect on the cryptocurrency industry. The SEC said on Thursday that Kraken, a cryptocurrency exchange, will have to pay a $30 million fine because it didn’t register the sale and offering of its cryptocurrency staking-as-a-service program.

On Twitter, before this news was made, the CEO of Coinbase, Brian Armstrong, issued a warning that “the SEC plans to prohibit bitcoin staking for retail clients in the United States.”

At first glance, the news that Kraken had reached an agreement with the SEC appeared to be bad news for all services that stake cryptocurrency. But the reaction of the market shows that only centralized exchanges that act as middlemen for staking, like Kraken and Coinbase, have reason to worry. Two of the biggest pooled staking services, Lido and Rocket Pool, have seen their governance tokens rise by up to 11% in the last day.

In proof-of-stake networks like Ethereum, staked assets are very important because they keep the network stable. Individual investors who can’t become Ethereum validators on their own because of the high barriers to entry turned to staking-as-a-service and pooled staking providers.

Liquid staking, which lets staked assets be tokenized and traded, has grown to $12 billion, which is 26% of the $47 billion DeFi ecosystem. Lido is the biggest protocol that supports ETH staking. It has 8 billion dollars, which is 75% of all the money that has been deposited.

In its complaint against Kraken, the SEC pointed out that the company oversimplified staking to make it more appealing to retail customers. Kraken told its customers how much they would get back, but the protocol should have decided how much they would get back if it changed.

What does it mean for crypto traders that Robinhood’s crypto revenue dropped 25% in Q4?

Over the last quarter, Robinhood’s bitcoin business brought in 25% less money (Q4). The company was started in 2013 and is best known for its stock trading program. In 2018, it added support for cryptocurrencies. Because of this, it has become very popular as a place to trade digital currencies like Bitcoin and Ethereum very quickly.

Revenue goes down for a number of reasons, one of which is that the bitcoin business as a whole is slowing down. In 2022, the high volatility of cryptocurrency prices meant that people traded less and exchanges like Robinhood made less money. In its report to the board of investors, the company said it had made almost $82 million (EBITDA).

There was a loss of $166 million in the fourth quarter, which was not a good sign. EPS went down by $0.20 because of this. For the third quarter of 2022, a drop of $0.20 per share in EPS was expected.

Vladi Tenev, the CEO of Robinhood, is optimistic about the future of cryptocurrencies like bitcoin, and the company will keep giving customers access to these “rapidly evolving assets.”

The values of Bitcoin and Ethereum are continuing to decline and trade in a “sell zone” since there are still concerns in the market for cryptocurrencies.

Bitcoin Price

The price of Bitcoin right now is $21,682, and 24 hours’ worth of trading is worth $24 billion. In the last 24 hours, Bitcoin has lost less than 1% of its value. CoinMarketCap is in the first place right now, with a market cap of $418 billion.

Bitcoin broke through a major support zone at $21,875, and if more candles close below this level, it’s more likely that BTC will go down. If the BTC price goes up and breaks through $21,875, the next resistance level could be $22,300 or $22,850.

If the price doesn’t break below $21,750, on the other hand, the downtrend could go all the way to $21,200. Further down, the next level of support for BTC is at $21,200. If this level is broken, the price of BTC could fall to $20,600.

Price of Ethereum

Ethereum costs $1,518, and $7.5 billion worth of it changes hands every 24 hours. ET has dropped by almost 2% in the last 24 hours and now has a market cap of $185 billion, which puts it at number two on CoinMarketCap.

Technically speaking, Ethereum is trading just above a double-bottom support level of $1,500. Closed candles above $1,500 could start an uptrend that goes all the way to $1,560.

An upward channel that was broken on Friday is pushing against this resistance level. If BTC breaks above $1,560, it could go to $1,600 or $1,680.

A failure to break above the level of $1,560, on the other hand, can maintain the BTC price negative and boost selling pressure, which can result in a bearish breakout below the level of $1,510 and send prices to the level of $1,435.

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