Key Takeaways

• The price of bitcoin fell last week ahead of inflation and Federal Reserve news, but has not recovered as much as other risk assets.
• US presidential candidates Donald Trump and Joe Biden continue to show that encryption is a notable election issue.
• Terraform Labs has agreed to a $4.5 billion settlement with the SEC.
• Binance founder Changepeng Zhao was considered one of the 25 richest people in the world.
• This week, crypto analysts are closely watching the price of bitcoin to see if the recent volatility is over.

The past week has been a wild ride for the price of bitcoin (Bitcoin).

The price of bitcoin fell below $67,000 on Tuesday ahead of May inflation data and the Federal Reserve meeting. Bitcoin regained some ground on Wednesday before falling again on Friday. While other risk assets such as stocks have rallied on cooler-than-expected inflation data, bitcoin has failed to recoup losses.

Despite bitcoin’s performance last week, crypto is having a moment in the US presidential election campaign. Presumptive Republican nominee Donald Trump met with bitcoin miners last week and a leaked email showed that members of President Joe Biden’s administration will meet with members of the crypto community.

Elsewhere, Terraform Labs agreed to a massive $4.5 billion deal with the US Securities and Exchange Commission (SEC) About 2022 TerraUSD stablecoin debacleand an investigative report concluded that Binance founder and former CEO Changpeng “CZ” Zhao is one of the 25 richest people in the world.

Growth of Crypto as a US Presidential Election Issue

Former President Donald Trump has changed his stance on cryptocurrencies during the current election cycle, now actively courting the crypto community to gain an edge over rivals Joe Biden and Robert F. Kennedy Jr.

After meeting with bitcoin miners at his Mar-a-Lago estate, Trump urged cryptocurrency enthusiasts on his Truth Social platform to “vote for Trump,” positioning himself as a defender against what he calls “hate from Biden to Bitcoin.”

This new approach follows Trump’s previous strong criticism of cryptocurrencies during his presidency, where he labeled them as highly volatile and unregulated assets that facilitate illegal activities. Now, however, the Trump campaign has announced plans to accept cryptocurrency donations, with the aim of mobilizing a “crypto army” to ensure his electoral victory.

On the other side of the aisle, the Biden administration’s approach to Bitcoin and crypto has been criticized, especially with a recent veto on legislation supporting the custody of cryptocurrencies by financial institutions and proposed taxes in Bitcoin mining. According to a report from The Block, Biden is also expected to start accepting campaign contributions via cryptography.

People on Biden’s side will participate in a roundtable discussion on Bitcoin and blockchain next month, according to Bitcoin Magazine.

Terraform Labs Agrees to $4.5 Billion SEC Settlement

Last Wednesday, a court filing revealed that Terraform Labs consented to a nearly $4.5 billion settlement to resolve an SEC lawsuit. The filing asked for court approval of the deal, which would end a legal battle over the company’s role in the dramatic failure of TerraUSD in May 2022, which led to an estimated $40 billion loss for investors.

The settlement comprises about $3.5 billion in restitution, more than $460 million in prejudgment interest and $420 million as a civil penalty. Former CEO Do Kwon will also personally contribute more than $200 million to Terraform’s bankruptcy estate and is barred from serving as an officer or director of a public company.

This agreement, originally reached before a hearing on May 29, aims to impose substantial financial remedies and facilitate rapid recovery for investors. The SEC highlighted that these penalties are intended to prevent future fraudulent activities in the cryptocurrency market. Terraform Labs declared bankruptcy earlier this year, shortly before his SEC trial, where he was found guilty of defrauding investors.

Binance founder Changpeng Zhao is estimated to be the 24th richest person in the world

Since his arrest, Binance founder Changpeng “CZ” Zhao has seen a significant increase in his net worth.

Forbes now estimates that Zhao’s fortune is $61 billion, making him the 24th richest person in the world.

This increase comes from its 90% stake in Binance, valued at US$33 billion. Zhao stepped down as the company’s CEO in November 2023 as a result of a judicial agreement with the US Department of Justice. Despite the company’s legal challenges and a $4.3 billion fine, Zhao’s personal financial impact was limited to a $50 million fine. Since then, Binance has continued to grow, with its market share rising from 38% to 42% before Zhao’s departure.

A big boost to Zhao’s wealth comes from his holdings in Binance Coin (BNB). Forbes estimates that he owns around 94 million tokens, which represents 64% of all BNB tokens. Despite Binance’s legal troubles, BNB rose 100% in 2024, reaching a market cap of $110 billion.

Binance’s 2017 initial coin offering was undersubscribed and forensic analysis indicates that Zhao and Binance retained a significant portion of the unsold tokens. BNB currently trades heavily on the Binance platform, and the token’s performance has continued to add billions to Zhao’s net worth even as he serves his sentence.

What to expect from the markets this week

All eyes are on the price of bitcoin this week as digital asset investment products, which include US-based bitcoin ETFs, have experienced more than $600 million in outflows amid the bitcoin price crash in last week, according to CoinShares.

Despite the price drop, the notorious bitcoin bulls on MicroStrategy (MSTR) announced another $500 million convertible note offering for the purpose of buying more bitcoin before upgrading the offering to $700 million later in the week.

Although bitcoin has traded in a relatively narrow range this month, the crypto asset has been outperformed by several bitcoin mining stocks, as noted by a JPMorgan report. This is believed to be a response to Core Scientific (CORZ) deal with CoreWeave related to artificial intelligence.

SEC approval of spot ether ETFs also now appears to be a question of “when” rather than “if.” SEC Chairman Gary Gensler indicated at a Senate hearing last week that the matter will be resolved over the summer. Furthermore, Bloomberg analyst Eric Balchunas gives a 50% chance that approval will occur by July 2. Prediction Market Polymarket puts the odds of trading a spot ether ETF by July 4th at 75%.

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