The crypto market is gearing up for a potentially volatile week as several major events unfold, with the potential to greatly impact investor sentiment and alter price trends. Among these events are the Federal Reserve’s highly anticipated interest rate decision, the Federal Open Market Committee (FOMC) meeting, and the ongoing legal battle between Binance and the U.S. Securities and Exchange Commission (SEC). All eyes in the crypto community are on these crucial developments next week.
One of the key events is the FOMC meeting, where market participants will be closely watching to see if the Federal Reserve will hike interest rates again in 2023. After a pause in June, rates rose by 25 basis points in July to 5.25-5.50%. The decision will largely hinge on U.S. Consumer Price Index (CPI) data, particularly core inflation. August’s CPI rose 3.7% year-on-year, up from July’s 3.2%, while Core CPI was 4.3%, down from 4.7% in July. This leaves both the Fed and the markets uncertain about the future course of action.
Given that inflation remains above the 2% goal and the economy is performing strongly, U.S. central bankers are expected to maintain a leaning towards stricter policy during the FOMC meeting. Even if interest rates are not increased, the announcement and any accompanying comments from Federal Reserve Chairman Jerome Powell and his team are likely to have an impact on the cryptocurrency market. Historically, Fed interest rate announcements have induced around 1% market volatility, and with Bitcoin currently trading comfortably above bearish levels at around $26,000, it will be interesting to see how the market reacts.
Another major event on the horizon is the court hearing between Binance and the SEC. The outcome of this hearing could have significant implications for the cryptocurrency market. If the ruling favors the SEC, it could potentially lead to a market sell-off, whereas a decision in favor of Binance could ignite a buying demand.
The U.S. SEC has recently presented evidence against Binance U.S., alleging non-compliance with a prior consent order. Binance U.S. has countered these claims, stating that the SEC’s demands in an emergency order are unwarranted. The ongoing lawsuit has already caused unrest in the crypto market, leading to the departure of several officials from Binance and Binance U.S., which has affected investor confidence and trading volumes.
The SEC has submitted 31 exhibits to support its motion to compel and oppose Binance U.S.’s request for a protective order. However, only 10 of these exhibits were included in the latest filings. The SEC is also asking the court to reject BAM’s plea for a protective injunction. The next hearing is scheduled for September 18 before Magistrate Judge Faruqui.
Furthermore, on September 15, the SEC moved to unseal or withdraw its previous motion to seal documents related to the Binance case. Both parties have agreed to disclose numerous SEC filings from last month. The SEC has expressed concerns about Binance U.S. not adequately separating its wallets, systems, and personnel from Binance.
If the SEC ultimately wins the case, Binance could face significant fines, operational restrictions, and strict oversight of its BNB token. Additionally, Binance CEO Changpeng Zhao (CZ) could face a permanent ban from running financial firms. The SEC alleges that Binance U.S. is putting $2.2 billion in presumably U.S.-based funds at risk, and if linked to illegal activities, these assets could potentially be seized.
As these major events unfold next week, the crypto market is preparing for a potentially volatile week. Investors will be closely monitoring the decisions and outcomes, as they have the potential to significantly impact investor sentiment and alter price trends in the crypto market. It remains to be seen how the market will react, but one thing is for certain – next week is set to be an eventful one for the crypto community.