Today's crypto updates include the Federal Open Market Committee (FOMC) developments, strategic blueprints for the base plans, the emergence of a U.K. stablecoin, and additional news in the digital currency sector.
In the ever-evolving world of cryptocurrency, several notable events are making headlines. Coinbase, a leading cryptocurrency exchange, has announced plans to launch a token aimed at boosting developers and builders, a move that could enhance interoperability and mass crypto adoption. However, this proposal has sparked criticism, with some suggesting it will make the U.K.'s stance on cryptocurrencies more stringent compared to the U.S. or the E.U.
Meanwhile, the Federal Open Market Committee (FOMC) meeting is scheduled for September 17th, with analysts widely expecting a rate cut of about 0.25 percentage points. This decision is seen as a measure to support economic growth amid softer labor data and subdued inflation pressures. Matt Mena, a crypto strategist at 21Shares, suggests that a 50 basis points rate cut could push Bitcoin higher.
The overall crypto market is currently at a 'neutral' level per the crypto fear and greed index. Bitcoin [BTC] is holding above $115K, with Tom Lee of Fundstrat projecting a 'monster move' for BTC and Ethereum [ETH] in the next 3 months. However, ETH has dropped 5% from nearly $4.8K to $4.5K, and Altcoins, including Ripple [XRP] and Solana [SOL], have retraced despite the market consensus of a 25 basis point (bps) Fed rate cut.
Ripple [XRP] is barely holding $3, while Solana [SOL] has slipped 7% from $249 to $230, but has since reclaimed $235. The community reaction to Base's token plan was mixed, with some stating it could be bearish for Ethereum.
In response to concerns about how Coinbase's COIN stockholders would benefit from the Base token, Brian Armstrong, CEO of Coinbase, stated that interoperability is the biggest barrier to reaching 1 billion daily active users of crypto. Armstrong noted that the token plan is not definitive, but it would help builders.
The Bank of England plans to impose a stablecoin ownership limit of £10K-£20K for individuals and £20 million for businesses. This represents a U-turn from a pledge made last year by Base to start without a token. Simon Jennings, executive director of the U.K. Cryptoasset Business Council, deemed the proposals impractical and costly to implement. Tom Duff Gordon, VP international policy at Coinbase, stated that imposing caps on stablecoins is bad for the U.K. users.
Shawn Young, chief analyst at crypto exchange MEXC, predicts that in a bullish scenario, the FOMC meeting could push BTC to reclaim the $120K-$125K price range. A bearish or cautious tone during the FOMC meeting could potentially drag BTC lower to $105K-$100K. Coinbase-incubated Ethereum L2 Base will set up a Solana bridge in a few days.
These developments underscore the dynamic nature of the cryptocurrency market, with key players like Coinbase and the Federal Reserve influencing its direction. As always, investors are advised to carefully consider their strategies and consult with financial advisors.
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