Bitcoin dips below $28k amid caution over Coinbase’s SEC notice


An illustrative stock chart and representation of Bitcoin are seen in this multiple exposure illustration photo taken in Krakow, Poland March 21, 2023. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

Bitcoin was down on Monday. Photo: Jakub Porzycki/NurPhoto via Getty

Bitcoin (BTC-USD) dipped below the $28,000 mark suggesting investors are cautious and waiting the outcome of the SEC’s notice to Coinbase.

Bitcoin was down 1.4% to $27,864 on Monday.

Ethereum (ETH-USD) fell 2.6% to $1,756.

The global cryptocurrency market cap was at $1.2tn, a fall of 0.1%, according to Coingecko data.

Coinbase receives SEC Wells notice

Last Wednesday, the US Securities and Exchange Commission (SEC) issued Coinbase Global Inc with a Wells notice — a formal declaration that the regulator intends to recommend an enforcement action.

Shares in Coinbase (COIN) dropped nearly 13% to $67.83.

If the SEC officially classifies cryptocurrencies as securities it would impact the trade volume on cryptocurrency exchanges such as Coinbase by trade volume.

Read more: Crypto live prices

All cryptocurrencies, except bitcoin, would need to register with the SEC, and be forced to adopt technology systems to make their order books audit-compliant.

They would also face strict rules on order execution to prevent market manipulation.

Exchanges such as Coinbase could risk large fines from the SEC for listing cryptocurrencies that the regulator would deem as being unregistered securities.

SEC chair Gary Gensler said he considers all cryptocurrencies securities except for bitcoin.

Crypto market reaction to US Federal Reserve rate hike

The cryptocurrency market remained largely in the green after the Federal Reserve decided upon a less hawkish rate hike at last Wednesday’s Federal Open Market Committee (FOMC).

The Fed’s 0.25% increase takes the benchmark federal funds rate to a target range of between 4.75%-5%.

“The Committee will closely monitor incoming information and assess the implications for monetary policy,” the FOMC’s post-meeting statement said.

Read more: ‘Dressing digitally’ pins hope on blockchain to clean up fashion’s carbon footprint

“The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.“

Federal Reserve chair Jerome Powell said: “The process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”

Cryptocurrencies have historically reacted positively to lower interest rate environments, which can encourage more liquidity in global markets.

Watch: Web3: Venture capital still pouring into crypto, claims head of Outlier Ventures | The Crypto Mile

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