M6 Labs L1, L2 & DeFi Weekly

GM, Anon! Never a slow week in crypto, however, when it comes to price action, things have been relatively stagnant as the market remains within a range. Some are anticipating a downward movement toward lower lows in the short-term, while others believe we may have already hit the bottom. Let's take a closer look!

State Of The Market: Tis The Season of Giving & Airdrops

TLDR

• The Federal Reserve maintains interest rates at 5.5%, causing a minor market dip, while a potential rate cut looms in March.

• Bitcoin's mining difficulty rises, driven by speculators and short-term holders, despite market sentiment hitting a three-month low.

• The UAE conducts its first digital dirham transfer using the mBridge CBDC platform, signaling advancements in digital currencies.

• Grayscale experiences significant outflows, while newly launched US ETFs attract inflows.

• Spot Bitcoin ETFs see renewed interest, while Ethereum ETF approval may happen in May.

The Federal Reserve announced its decision to maintain interest rates at 5.5%. In their statement, the Fed mentioned, "The committee does not anticipate reducing the target range until it has a stronger belief that inflation is steadily progressing towards the 2 percent mark." 

• This unexpected decision led to a minor market downturn, as many had anticipated a rate cut. 

• However, the second interest rate decision scheduled for March indicates a 47% probability of a 25bps rate reduction. 

Bitcoin's mining difficulty is on the rise, indicating a positive trajectory, and speculators are driving a bounce in the market with renewed activity among short-term holders. However, market sentiment has hit a three-month low due to sell-side pressure and concerns about the Grayscale Bitcoin Trust. In other news, the UAE conducted its first digital dirham transfer via the mBridge CBDC platform, sending 50M dirhams to China. Vitalik Buterin gave his thoughts on the promise and challenges of crypto + AI applications in an article, exploring how AI can enhance crypto mechanisms.

X has received a money transmitter license for payment services in Nevada, while Russia prioritizes moving away from the US Dollar for trade settlements in 2024. Additionally, PayPal has announced layoffs of 2,500 employees. Visa is partnering with Transak to simplify crypto-to-fiat conversions in 145 countries, offering greater accessibility to crypto users globally.