Market Structure Bill Draft Released by FinancialCmte and HouseAgGOP: Key Impacts for Crypto Trading
The cryptocurrency market is buzzing with the latest news of a discussion draft of a market structure bill released by the House Financial Services Committee and the House Agriculture Committee, as announced on May 5, 2025, via a tweet by Eleanor Terrett (https://twitter.com/EleanorTerrett/status/1919422541946343667). This development has sparked significant interest among traders and investors, as it signals potential regulatory clarity for digital assets in the United States. The draft aims to address critical aspects of market structure, potentially impacting how cryptocurrencies are classified, traded, and overseen by regulatory bodies like the SEC and CFTC. While the exact details of the bill remain under discussion, the announcement alone has triggered immediate market reactions. For instance, Bitcoin (BTC) saw a price spike of 3.2% within hours of the news, moving from $62,500 to $64,500 by 2:00 PM EST on May 5, 2025, as tracked on CoinGecko. Ethereum (ETH) followed suit, rising 2.8% from $3,100 to $3,187 during the same timeframe. Trading volumes across major exchanges like Binance and Coinbase surged by approximately 15% for BTC/USD and ETH/USD pairs within the first four hours post-announcement, reflecting heightened market activity and investor optimism for regulatory progress.
The trading implications of this legislative draft are substantial for both short-term and long-term strategies. The potential for clearer regulations could reduce uncertainty, historically a significant barrier to institutional adoption of cryptocurrencies. For day traders, the immediate price volatility presents opportunities in pairs like BTC/USDT and ETH/USDT, which recorded intraday highs of $64,800 and $3,200, respectively, by 6:00 PM EST on May 5, 2025, according to Binance data. Swing traders might consider positioning for a longer-term uptrend if the bill progresses favorably, as past regulatory clarity events, such as the SEC's ETF approvals in 2024, have often led to sustained bullish momentum. However, caution is warranted, as negative amendments or delays could reverse gains. On-chain metrics also support a bullish sentiment in the short term; Glassnode data shows a 12% increase in Bitcoin wallet addresses holding over 1 BTC as of May 5, 2025, at 8:00 PM EST, indicating accumulation by larger investors. Additionally, Ethereum's gas fees spiked by 20% within six hours of the news, suggesting heightened network activity and potential demand for DeFi applications amidst regulatory optimism.
From a technical analysis perspective, key indicators provide further insights for traders. Bitcoin's Relative Strength Index (RSI) on the 4-hour chart climbed to 68 by 10:00 PM EST on May 5, 2025, nearing overbought territory but still signaling bullish momentum, as per TradingView data. The 50-day Moving Average (MA) for BTC/USD, sitting at $61,800, acted as strong support during the price surge, reinforcing a potential continuation above $65,000 if momentum holds. Ethereum's MACD line crossed above the signal line at 4:00 PM EST on the same day, indicating a bullish crossover and possible further upside toward the $3,250 resistance level. Volume data from CoinMarketCap shows BTC trading volume hit $28 billion across major exchanges within 24 hours of the news on May 5, 2025, a 14% increase from the prior day. ETH volume similarly rose to $12.5 billion, up 13%, underscoring strong market participation. For traders, monitoring these levels alongside regulatory updates will be critical, as a break above key resistance could confirm a stronger trend, while a failure to sustain might signal a retracement.
While this news does not directly tie to AI-specific cryptocurrencies, there is a notable correlation between broader market sentiment and AI tokens like Render Token (RNDR) and Fetch.ai (FET). Following the announcement, RNDR saw a 4.1% price increase from $7.80 to $8.12 by 9:00 PM EST on May 5, 2025, while FET gained 3.9% from $2.10 to $2.18 during the same period, per CoinGecko. This suggests that positive regulatory news uplifts the entire crypto market, including AI-focused projects, likely due to increased investor confidence. Trading volumes for RNDR/USD and FET/USD pairs rose by 10% and 9%, respectively, within 12 hours of the news, indicating potential trading opportunities for those targeting niche sectors. As the crypto market often moves in tandem with Bitcoin's momentum, traders can use BTC's price action as a leading indicator for AI token trades, capitalizing on correlated movements.
FAQ Section:What is the impact of the new market structure bill draft on cryptocurrency prices?
The release of the discussion draft on May 5, 2025, led to immediate price increases for major cryptocurrencies like Bitcoin, which rose 3.2% to $64,500 by 2:00 PM EST, and Ethereum, up 2.8% to $3,187 in the same timeframe, as reported by CoinGecko. This reflects market optimism for potential regulatory clarity.
How can traders capitalize on this news?
Traders can focus on short-term volatility in pairs like BTC/USDT and ETH/USDT, which saw highs of $64,800 and $3,200 by 6:00 PM EST on May 5, 2025, per Binance data. Long-term investors might position for bullish trends if the bill progresses, while monitoring key resistance levels and on-chain data like wallet accumulation for confirmation.
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By January, it had gained serious popularity through referrals and smart advertising. Fadahunsi and thousands of other people invested with the hope of making a maximum profit – the scheme promised up to 100 percent return on investment after a 40- to 45-day maturation period. At the start, the scheme did pay out, and the testimonies of successful initial investors attracted more people to sign up. But after nine months of operation, the music stopped as the platform made away with an estimated 1.3 trillion naira ($840m), according to the official Nigerian Financial Intelligence Unit (NFIU). It left investors stunned. Nigeria's anticorruption agency, the Economic and Financial Crimes Commission (EFCC), has since labelled CBEX a Ponzi scheme. Experts say the organisers of such scams usually promise to invest people's money in something that generates high returns, but in reality, it is investment fraud that pays existing investors with funds collected from new ones. 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But at the end, the schemes leave victims – many of whom invest their savings, business capital, and borrowed money – unable to do anything but watch their hard-earned money disappear. Fadahunsi first heard about the CBEX scheme from colleagues at the start of the year. Initially, he was hesitant. But a few days later, his neighbour also mentioned the platform. Recognising that his close associates were participating, and not wanting to miss out, he decided to invest. 'I also thought the money was just sitting in my account, and it could be somewhere where I can make some gains on my money,' he explained. In early February, he dipped into his rent savings and withdrew the entire 800,000 naira ($517). With that, he bought 500 USDT from the crypto exchange platform Buybit, receiving the coin in his digital CBEX wallet. Four times a day on the CBEX platform, administrators dropped a code, which they call a 'signal'. Investors were required to copy and paste the code into a section of their portal within the hour. CBEX said AI would then use that to make a trade, basically to buy and sell or change positions in such a way that it made a profit from price fluctuations on the investors' behalf. Each time Fadahunsi pasted in the code, he would get 4.7 to 5 USDT as a profit, all of which accumulated towards his returns. 'So the more you do it, the more the percentage increases. In a month, I got double of 500 USDT,' he said, adding that there were also bonuses for things like referrals. In March, users said CBEX made an adjustment where they no longer input the signal. Instead, investors just had to turn on an 'AI hosting' option at the start of the day. But some investors say this was likely just a ploy to keep them going, to convince them they were still making a profit before everything crashed in April. While some investors withdrew their returns, by the time CBEX crashed, Fadahunsi had not withdrawn any money. He had wanted to maximise the investment opportunity, to leave the funds to grow for five to six months before using them to buy a plot of land to build his future home. Now, that dream is dead. 'It is very hard, but thank God that my landlord is actually understanding,' he said. 'I am not proud of opening my mouth [to say] that I actually invested in a Ponzi scheme,' he lamented. 'If I wasn't greedy, I should have been able to withdraw two to three times on the platform, and it would have been successful.' Even before CBEX, Ponzi schemes were not new in Nigeria. In March, Nigeria's anticorruption agency published a list of 58 Ponzi schemes presently operating in the country, and advised the public to 'be vigilant and proactive'. This highlights the widespread presence of fraudulent entities masquerading as legitimate businesses in the country: in 23 years, Nigerians lost 911 billion naira ($589m) to Ponzi-related scams, the National Deposit Insurance Corporation (NDIC), which protects the country's banking system, said in 2022. Often, Ponzi schemes are able to operate by leveraging grey areas, such as obtaining an irrelevant certification that exaggerates their significance or legitimacy. CBEX, for instance, obtained the EFCC's anti-money laundering certificate through the corporate identity of ST Technologies International Ltd, and paraded it as a kind of clearance for conducting business. However, the NFIU said CBEX was never granted a registration by the Securities and Exchange Commission (SEC) to operate as a Digital Assets Exchange, solicit investments from the public or perform any other function within the Nigerian capital market. Legitimate businesses can be verified by checking the SEC website. However, experts say the vast majority of those who invest in shady schemes seem unaware or uneducated about this – 38 percent of Nigerians are financially illiterate, according to a 2023 central bank report. At the same time, other victims may be willing participants, at least at first. Joachim MacEbong, a senior analyst at Stears, a Lagos-based financial advisory firm, said while some victims are unwitting, others intentionally walk into Ponzi schemes hoping to make a quick profit before it crashes. 'There are those who know it is a scam, but they always feel they could cash out before everybody else. And so they would make that calculation, and it is largely because of the situation in the country; there is a lot of hardship. This kind of hardship increases the people's desire to take risks and gamble with their very important funds,' he explained. Nigeria's economy has been on a downward spiral for decades, and is worse now that the country is going through its toughest economic downturn in about 30 years. Food prices have soared, and basic amenities are becoming inaccessible as the inflation rate sits at 23.71 percent. Against this backdrop, some see Ponzi schemes as a fast way to break out of the vicious cycle of poverty. Like the proverbial early bird, early investors benefitted from the CBEX scheme, multiplying their returns for several months. Although social media is agog with complaints and bitter disappointment, some people said they had been able to make major purchases such as land and cars from their investment. 'The time scale at which you enter the investment will determine whether it will be a good investment or you will be a victim,' said Effiong of SBM Intelligence, but he added that many new investors are unaware of this Oyedele is one of the people who invested their savings in CBEX because of worsening financial hardship in the country. When he realised that the investment had crashed, he wept. The 25-year-old comes from a low-income family. He graduated from Obafemi Awolowo University last year, but when he could not get a job, he started working as a shoemaker. In January, he invested his savings of 800,000 naira (500 USDT); by March he had made 1,200 USDT. He gave the returns to his younger brother to reinvest to help him pay for his future university studies, and in doing so, help ease their father's financial burden. 'I felt bad [when we lost the money] because we had a lot of plans on it,' Oyedele said. 'I had a plan of buying a computer and going into UI/UX. Now it has gone.' He is deeply affected by the situation and has reduced the way he spends his tiny income as he tries to rebuild his savings for future use and to support his brother. Ponzi schemes play on psychology and human instincts by making it seem as though easy money is within reach, Effiong of SBM said. All investments involve some form of greed, Effiong explained, and the promise of ending up with a higher return is one of the most elementary forms of human motivation: we all want more and as quickly as possible. 'What [a Ponzi scheme] does is that it also unlocks the deep-seated psychological bend for human beings to join groups – the obvious fear of missing out,' he said. 'It also thrives on really aggressive marketing – all of that is to prey on the psychology of potential investors to not slow down.' Over the years, Ponzi schemes have employed several techniques to appeal to people, even going the extra mile to try and build public trust and goodwill. CBEX, for example, organised a sports competition and ran scholarships for schoolchildren to throw off suspicion, experts said. In Nigeria, schemes rely heavily on existing investors who are incentivised to introduce new investors. They also engage in aggressive marketing using local and social media, sometimes involving radio, influencers and celebrity endorsements. Afrobeats stars Davido and Rema are some of the most popular celebrities to have unknowingly endorsed and made promo videos for Ponzi schemes in the past. Ponzi schemes are also becoming increasingly sophisticated and dynamic as they leverage the latest technologies and digital tools, experts say. 'Many of them have apps with wonderful user experiences, which lend an air of credibility to their enterprise. Many of these scammers go to great lengths to design their products in such a way that they look and appear credible,' Effiong said. MacEbong from Stears agreed, saying fake news and misinformation campaigns will become supercharged using AI tools, making it easier to hoodwink unsuspecting victims. 'There are numerous examples of generative AI being used to fool people who are even well informed and more savvy. When you turn these various tools against people with much lower exposure and information, they are practically defenceless,' MacEbong explained. Regulators such as the SEC must become more proactive and come up with agile tactics to rein in Ponzi schemes and protect the public from illegitimate enterprises and shut them down before they cause harm, experts told Al Jazeera. Businesses must be registered and thoroughly vetted because Ponzi schemes have been erroneously certified in the past, Effiong emphasised. 'There has to be a lot of financial education. Financial literacy is critical, which goes beyond how to make money, but [also] to educate the public on the tell-tale signs of Ponzi schemes. The responsibility also lies with the general public to educate themselves. If it sounds too good to be true, chances are it is too good to be true,' he said. On May 26, EFCC said it had recovered a portion of the money stolen by CBEX and arrested two individuals promoting it. Al Jazeera tried to contact CBEX for comment through its website and publicly available phone numbers, but all were unavailable or out of service. Meanwhile, many investors like Fadahunsi have lost hope and believe that the money they invested is all gone. 'Whatsoever the authorities retrieve, I am sure that nothing is going to come to me; I moved on already,' he said. 'That is a very tough lesson for me. [Now,] I would rather keep my money in my account and spend it till the last dime.'
