May 16, 2023

Landmark new crypto rules were signed off on Tuesday by finance ministers of the European Union. The EU Council, which represents 27 member states, unanimously approved the Markets in Crypto Assets regulation (MiCA), making the bloc set to be the first major jurisdiction in the world with a crypto licensing regime. It also agreed to new anti-money laundering measures on crypto funds transfers. “I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector,” said Elisabeth Svantesson, minister of finance for Sweden. “Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism." 

Individual wallets holding at least one bitcoin set a milestone figure earlier this week, suggesting long-term sentiment for the tokens remains intact even as broader markets weigh down prices. Data from the on-chain analytics tool Glassnode show bitcoin wallets holding more than one token crossed the one million mark on Monday, up 20% since February 2022. Bitcoin wallets holding one token grew by 79,000 in the three months following November’s collapse of crypto exchange FTX and alongside tumbling bitcoin prices which hit multiyear lows below $16,000. 

Weekly decentralized exchange (DEX) trading volume on Binance’s BNB Chain has reached its highest level in a year, according to data from DefiLlama. The week commencing May 7 saw DEX volume on BNB reach $5.11 billion, a level not seen since early May 2022, though volume did rise to just above $5 billion in the week following FTX’s November implosion. This comes as DEXs witness an uptick in popularity, perhaps as a result of U.S. regulators clamping down on centralized exchanges. In April, DEX Uniswap topped centralized exchange Coinbase in trading volume for the fourth consecutive month. Lower fees on the BNB Chain might mean users are more likely to trade there, said Katie Talati, head of research at Arca, explaining one of a number of possible reasons for the surge in volume.

Bitcoin and ether, the world's top two cryptocurrencies by market value, moved in tandem for much of 2022. That positive relationship has weakened this year, signaling an impending regime change in the market.

As of Monday, the 30-day rolling correlation between changes in bitcoin and ether prices was 77%, the lowest since 2021 and notably weaker than 96% seen two months ago, according to crypto data provider Kaiko.

Ether, in the past, has decoupled from bitcoin for brief periods. The latest weakening of correlation may be long-lasting, meaning bitcoin, the world's largest and most liquid digital asset, may no longer anchor ether and the broader market, according to Pulkit Goyal, vice president of trading at OrBit Markets.