The SEC is about to take a major step

Every week Amdax summarizes what is happening in the crypto market for you. Want to know more? Click through the links in this article for more depth.

Market update

Three steps to get you up to speed:

1. Bitcoin has almost come to a standstill. The bitcoin price has been moving between 63,000 and 66,000 dollars for weeks now, and today it sits around 63,700 dollars. Volatility is at its lowest point of the year, which is partly down to the summer: lower trading volumes and few large players active in the market. The pattern is not unusual. After the declines of the past few months, a period of low volatility is historically normal. What stands out is that the ETF market keeps moving in the meantime. Last week, US spot bitcoin ETFs took in around 3 billion dollars, a strong week despite little price movement.

2. The SEC is coming with its own crypto rules. On Friday, the US regulator the SEC votes on a proposal called "Regulation Crypto." It would be the first formal crypto regulation under this chair, and that is a meaningful difference from what has been on the table so far: a future chair can withdraw policy statements in a single afternoon, but not a published rule. The timing says a lot, because the US Senate went into its summer recess without voting on the CLARITY-Act, the law meant to set the market structure for crypto assets. The regulator is no longer waiting on lawmakers. On Friday, the SEC only decides whether the proposal goes out for consultation, so there will not be any big changes right away. Months of comment rounds follow after that, and the expectation is that it will not take effect until 2027.

3. Bitcoin split off, and no one followed. On August 8, the Bitcoin blockchain split in two, and within a day it was over. The trigger was BIP-110, a proposal to limit how much non-financial data a transaction can carry. The debate behind it has been running for years. Supporters see data like Ordinals and Runes as spam that clutters the blockchain and has no place on a payment network. Opponents reason the other way around: as long as you pay, you can use the network for whatever you want, and in the long run that principle is essential to the health of Bitcoin. At block 961,632, nodes enforcing the rule began rejecting blocks from the rest. Only 2.53 percent of the blocks in the signaling period had backed the proposal, well below its own threshold of 55 percent. In the end, more than 99.8 percent of total hash power stayed on the main chain.

Ries' take

It is the quiet season. The price is not moving, and volumes are low. In a week like this, it is tempting to conclude that nothing is happening. There was more to this week than the price let on. The SEC is starting on rules that cannot be undone with a single stroke of the pen. On the network itself, you could see how decision-making in Bitcoin really works: no board, no vote, just a proposal that splits off and then stalls because the hash power does not follow. Today the price is waiting on the US inflation figures. The rest did not wait.

Behin the scenes

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