The Breakdown First Five - Thursday, March 21, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Fed Sees Bumps in the Road

The Fed has held rates steady again, but forecasts three rate cuts to come this year. Chair Powell said that the uptick in inflation was just a “bump in the road” that hasn’t “changed the overall story.” The Fed plans to slow balance sheet runoff “fairly soon” with extensive plans to avoid a repeat of the 2019 liquidity crisis. Powell confirms there is no secret lab at the Fed cooking up CBDC. No hawkish jawboning, risk markets up in response.

4. DOGE is the Futures

Coinbase futures will launch trading for Dogecoin, Litecoin and Bitcoin Cash futures on April 1st. It’s not an April fools gag, the exchange says Doge has “transcended its origins as a meme.” Looking a little deeper, Coinbase self-certified these markets with the CFTC, suggesting these tokens are commodities like Bitcoin. Fully regulated, US-based Doge futures. This looks like a chess move in the battle against the SEC. 

3. Outflows Continue

Another crushing day of massive ETF outflows despite positive price action. $261M came out of the funds, making it three days of outflows in a row. Grayscale outflows slowed down again, but still at a gigantic $386M. No fund managed more than $50M worth of inflows, but almost all remained positive. Almost $750M in outflows so far this week, the highest outflow since the first full week and there’s still two days to go. 

2. SEC Lawyers Blackballed

With the pile of SEC scandals growing higher, A16Z has joined the call to blackball former SEC staff. The debt box scandal was the last stray. SEC lawyers were found to have deliberately misled the court in order to freeze crypto founders bank accounts, upending their lives. It’s hard to argue that anyone who hasn’t quit by now isn’t complicit in this vindictive behavior. 

1. Ethereum Foundation Investigated?

The Ethereum Foundation has removed their warrant canary, implying that they have been subpoenaed by a state actor. Further reporting from Fortune claimed that multiple US firms have received subpoenas from the SEC regarding their dealings with the Ethereum Foundation. Sources say Foundation is the target of an investigation. No clear details at this stage, but the assumption is that Gensler is fishing to find a reason to argue that ETH is a security.