Cryptocurrency markets are experiencing volatile movements overshadowed by regulatory hurdles in the US and geopolitical tensions in the Middle East. David Duong, Head of Global Investment Research at Coinbase, assessed the current state of the market and the critical catalysts for the future.
The Clarity Act, expected to be a turning point for the cryptocurrency sector, has faced new obstacles in the US Senate. Duong stated that if the bill does not pass within the next six weeks, it risks being delayed until 2027.
The debates surrounding stablecoin rewards and the SEC’s jurisdiction are particularly prolonging the process. Coinbase continues to request changes to the current draft, arguing that it could restrict the industry’s development.
Duong, evaluating Bitcoin’s ability to hold above the $70,000 level despite the effects of the war in the Middle East, described this as a “resilient” situation. He argued that there could be two main reasons why Bitcoin is trading sideways while other asset classes are experiencing significant declines:
- The wallets that would generate large sales have run out on the market.
- Ongoing capital inflows into digital asset funds.
One of the most striking points of the interview was that Fannie Mae and Freddie Mac have begun accepting crypto assets as collateral in credit assessments. Thanks to a collaboration between Coinbase and Better Home & Finance, users will be able to obtain home loan down payments by using their Bitcoin or USDC assets as collateral without converting them to cash. Duong argued that this development is a giant step towards crypto being accepted as “legitimate collateral” in the mainstream financial system.
*This is not investment advice.
