US Treasury Touches "Crypto-waters"

On 6th of April, the U.S. Department of the Treasury published the 2023 DeFi Illicit Finance Risk Assessment, the first illicit finance risk assessment conducted on decentralized finance (DeFi) in the world. The assessment considers risks associated with what are commonly called DeFi services.

The document is 42 pages long. This report looks at how criminals are using DeFi services to move and hide money illegally. DeFi services use technology called blockchain and smart contracts to allow people to make transactions without banks or other financial institutions.

However, many DeFi services are not following the rules meant to stop money laundering and financing terrorism. Some DeFi services are trying to avoid these rules by claiming to be fully decentralized, but this doesn't excuse them from following the rules.

The report recommends improving the rules and regulations for DeFi services to make sure they follow the laws and don't help criminals.

The cryptocurrency market may face regulatory scrutiny as authorities look to increase oversight on digital assets, so be informed and prepared for real bombshells in the not so distant future.

What do you think is the real target of the Treasury?

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I would love to see your comments on this news.

Let me update some crypto charts to snapshot what’s going there. The comparison chart of major cryptos vs. the market follows below.

BTC ETH Total Market

Source: TradingView

The primary cryptocurrency, BTC (orange line), has outperformed both the second-largest cryptocurrency, ETH (black line), and the overall cryptocurrency market excluding BTC and ETH (blue line) year-to-date. It has gained almost 68% compared to 54% for the second largest crypto (ETH) and only 28% for the total crypto market excluding BTC and ETH.

It appears that the cryptocurrency market has matured over time, with various scams and market busts occurring, as well as new cryptocurrencies emerging and then fading away.

However, two of the original cryptocurrencies, BTC and ETH, continue to remain strong and dominant. Despite the growth of these major players, the rest of the market seems to have reached a plateau, with less trust in the market as indicated by the flatness of the blue line.

The dominance chart is the next.

BTC ETH Dominance

Source: TradingView

The chart clearly shows that the main coin has made significant progress in terms of market share, hitting a peak of 48% in July 2021.

The next barrier to overcome is the middle of the range at 57%, which could further solidify its position as the trusted "first child" of the crypto market.

On the other hand, Ethereum's market dominance has remained flat at 20%, with little movement over the past two years.

The final chart depicts the total crypto market below.

Total Crypto Market Weekly

Source: TradingView

The total crypto market cap, which is currently slightly above $1.1 trillion, has been showing small volatility for the past three months around the strong barrier close to $1.2 trillion. Although the cap recently tested this mark again, it has remained unbroken so far.

We can observe a similar scenario that occurred last August, where the market faced a strong resistance near the $1.2 trillion mark, which eventually led to a rejection and a collapse in the crypto market cap.

However, the current situation is the second attempt to break this barrier, and if successful, the market could potentially double to reach $2.2 trillion. This level is significant as it intersects with the top of the Right Shoulder of the former Head & Shoulders pattern (blue dotted line) and the broken Neckline (purple dashed line).

On the downside, there is a limited risk as the market has established a double valley at $727 billion, which acted as the lows of 2022.

Which way do you think the crypto market will go?

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Intelligent trades!

Aibek Burabayev Contributor

Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from for their opinion.

2 thoughts on “US Treasury Touches "Crypto-waters"

  1. Dear Ted, thank you for taking the time to share your thoughts.
    Your analogy regarding the Liberty Dollar and the potential for government action against alternative currencies is interesting. Regulatory authorities are becoming more concerned about the use of cryptocurrencies for illegal activities. It's important to be aware that digital assets operate on a decentralized network and are not controlled by a single entity or government. However, regulations for digital assets are evolving, so it's important to stay informed about any changes that may affect the cryptocurrency market.
    Best regards, Aibek

  2. Does anyone remember what the U.S. Treasury did to William Innes, the man who decided to start minting his own “Liberty Dollar” coins in 2009? Why would anyone think this time will be different? If crypto threatens competition with the USD (or a Fed-backed CBDC) in any way shape or form, it will be dealt with harshly.

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