Inflation concerns and a general sense of trepidation about the future of the global economy continue to put a damper on Bitcoin and altcoin prices and currently the Crypto Fear and Greed index is solidly in the ‘fear’ zone where it has been parked since the beginning of December.
Crypto Fear & Greed Index. Source: Alternative
Despite the brief bump in prices seen across the markets following the recent Federal Open Market Committee (FOMC) meeting where Fed Chair Jerome Powell indicated that interest rates would remain low for the time being, the overall sentiment in the crypto market continues to wane, signaling that 2021 could end on a bearish note.
BTC price could dampen due to macro concerns
In a recent report from Delphi Digital, analysts noted that the price of Bitcoin (BTC) has been seen to closely track changes in sentiment during market downturns and it can often take some time for the trend to reverse.
BTC price vs. Crypto Fear & Greed Index. Source: Delphi Digital
Delphi Digital went on to say that the current technical setup for BTC “leaves much to be desired” especially after the price fell back under the 200-day exponential moving average and is in the process of testing its 200-day simple moving average.
A similar setup was seen was following the major market pullback in May 2021 and it was another two months before BTC was able to find a local bottom.
BTC/USD vs. 200-day EMA & SMA. Source: Delphi Digital
Coinciding with the market pullback in May and the recent weakness and volatile market conditions is an increase in the volume of stablecoins transacted. The volume transacted on Dec. 14 spiked to $57 billion whereas the daily average had been consistently between $10 to $20 billion.
Daily stablecoin transfer volume. Source: Dune Analytics
A similar spike in stablecoin volume was observed during the pullback in May, leading Delphi Digital to warn that both BTC and Ether (ETH) could see their prices oscillate for the remainder of the year.
Delphi Digital said,
“Given this, the most likely path forward is more choppy/sideways price action heading into year-end, though any major risk-off event or volatility spike that punishes risk assets would likely drag on BTC and the broader crypto market as well.”
Related:Historically accurate ‘momentum indicator’ hints at possible Bitcoin breakout ahead
The market is gearing up for a rally in Q1 2022
A similar expectation of choppy markets was expressed by the crypto analytics firm Jarvis Labs, which also pointed to some early “bottoming” signals according to a wide array of data.
BTC/USD vs. 30-day returns. Source: Jarvis Labs
Jarvis Labs highlighted evidence that shows retail traders buying the recent dip and other signs which point to whales accumulating in the current range, but the analysts also noted that the short-term holder realized price is $53,000 and recommended caution for traders “until this level is flipped.”
In summary, Jarvis Labs stated that $42,000 is now the local bottom for BTC, but warned that it needs to recover $53,000 soon.
The overall cryptocurrency market cap now stands at $2.233 trillion and Bitcoin’s dominance rate is 40.6%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The top advertising watchdog in the United Kingdom is cracking down on crypto ads that the agency says appear to be taking advantage of customer naivety.
The Advertising Standards Authority (ASA), the UK’s independent advertising regulator, slapped bans on seven crypto-related advertisements on Wednesday in a series of rulings.
Six of the bans are directed at crypto exchanges, including Coinbase Europe, Kraken, Coinburp, Luno, EXMO, and eToro. The UK regulator accused each of the advertisements of failing to illustrate the risks of cryptocurrency investments.
The ASA also said the ads were “irresponsible because [they] took advantage of consumers’ inexperience or credulity”. The regulator forbids each company from displaying the ads any further.
Additionally, the ASA banned an advertisement from the pizza chain Papa John’s, which tweeted “turn pizza into £10 [$13.25] worth of Bitcoin (BTC).”
The chain also tweeted that it had “partnered with @LunoGlobal to offer FREE Bitcoin worth £10 [$13.25] for every pizza bought via our ‘£15 [$19.88] off when you spend £30 [$39.76]’.” Papa John’s ran a similar advertisement on its website.
The ASA has banned the ads for allegedly taking advantage of consumers’ “inexperience or credulity” and for creating marketing that “trivialized investment in cryptocurrency.”
Papa John’s reportedly argued that they “ran the promotion to raise awareness of the connection between cryptocurrency and pizza” in anticipation of “Bitcoin Pizza Day” in May.
Bitcoin Pizza Day commemorates May 22, 2010, the day an early crypto adopter spent 10,000 BTC on two Papa John’s pizzas. That amount of Bitcoin is now worth about $490 million at time of writing.
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Altcoins like Algorand and Solana have recorded some of the highest losses following the market crash. This has been apparent in the performances of these digital assets in the past week. While the market at large had experienced dips, Algorand, Solana, and Hedera had led the pack for the worst performing coins for last week.
Altcoins Suffer Massive Losses
The crash which started with the top coin, Bitcoin, had inadvertently spilled over onto altcoins. Most had suffered greatly with the highest losses being recorded across digital assets such as Algorand and Solana. These cryptocurrencies had all recorded at least 20% price drops in the space of a week and even higher losses across monthly records.
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Algorand had seen the highest losses with a 24.8% total loss for last week that brought its price to $1.35. The total losses for the month came out to 35.5%. Solana suffered losses of 20.3% in the same one-week time frame, along with 36% losses for the month. Hedera recorded 20.1% losses on the week-long scale, marking the lowest of the three but saw the highest losses on a monthly average with a 49.2% loss.
Algorand and Solana record highest losses | Source: Arcane Research
BNB also suffered alongside fellow altcoins, as did Ethereum. According to Arcane Research, BNB recorded an 11% loss for the week while Ethereum saw a 14% total loss, underperforming Bitcoin for the week.
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The top three worst-performing coins were noted to be Layer1 tokens, which may suggest that Layer1s are beginning to taper off in their outperformance of the market. However, the dip has been market-wide and may only be temporary.
Bitcoin Not Much Better Off
The altcoins had suffered much more than bitcoin for the week but bitcoin itself had not recorded the best performance either. The digital asset which had been on a streak for the last month had suddenly reached a roadblock, struggling to break through $50,000 once again. Bitcoin had lost 8% of its total value over the same seven-day timeframe. Lesser than its altcoins counterparts but still significant nonetheless.
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Bitcoin outperformed Ethereum for the week, once again claiming dominance over the number 2 cryptocurrency in the market. Ethereum’s drop below $4,000 this past week helps to place bitcoin solidly above it in terms of performance.
The top three coins by market cap, namely BTC, ETH, and BNB, all had a negative week, all dropping below key resistance points. This comes on the back of massive sell-offs that have been recorded in the market in the past weeks, sending the value of cryptocurrencies all across the market plummeting.
BTC struggling at $48K | Source: BTCUSD on TradingView.com
Featured image from Investment U, charts from Arcane Research and TradingView.com
WAGMI United has formed an ownership group of NFT collectors, crypto enthusiasts, and sports execs to buy a soccer team.
It plans on upending the English Football League by tapping into new funding sources.
Running a soccer club is easy—just look at “Ted Lasso,” in which an American football coach tries his hand at the world’s game, winning over the team with his pluck and can-do spirit.
In true American fashion, a group of investors that includes NFT evangelist Gary Vaynerchuk and Philadelphia 76ers President Daryl Morey, says it “is in advanced negotiations to purchase an English Football League club” using cryptocurrency.
The organization behind the purchase, WAGMI United—a play on the crypto rallying cry “We’re All Gonna Make It”—is claiming it’s the “first time the sale of a professional sports team has been partially financed through cryptocurrency.” However, partial stakes—if not wholesale transfers of control—in pro sports teams have been financed with crypto; a Club Necaxa owner this year sold a 1% stake in the Mexican soccer team via NFT.
WAGMI United says, once final, it will incorporate a “cutting-edge and crypto-centric approach to running the club.” Though the target acquisition remains undisclosed, co-founders Preston Johnson and Eben Smith (co-creator of the PUNKS Comic NFTs and co-founder of the Digital Collectibles Agency, respectively) are already referring to it as “Crypto’s Club.”
WAGMI United didn’t go into details about what a crypto-centric approach might look like, beyond team NFTs for supporters and more decentralized ownership and operations, which could be a subtle nod to DAO—decentralized autonomous organizations that use tokens to represent a share of ownership and decision-making power.
While it’s easy to imagine club token holders voting for their starting 11 each week, a press release stressed the importance of analytics for club success—as does the inclusion of Morey in the ownership group. Morey is the basketball equivalent of Billy Beane, the Oakland A’s front office executive profiled in “Moneyball” for his incorporation of advanced statistics in personnel and tactical decisions.
“Throughout my entire career, I’ve always been on the lookout for new approaches that can change the game and give teams an edge,” said Morey. “By bringing new technologies and fresh thinking to the world of English football, I believe WAGMI United could be on the leading edge of a revolution in how sports franchises are run—both on the field and in the front office.”
VaynerX Chairman Vaynerchuk, meanwhile, alluded to ways of leveraging Web3 tech for sports franchises. “NFTs have an unparalleled power to bring people together and build dynamic, passionate communities that unlock an untold amount of creativity and collectively tell incredible stories,” he said. “I don’t know if we’ll win the league with WAGMI United, but I know we’ll stay true to the community.”
According to the release, the ownership group also includes Universal Music Group executive Celine Joshua, NFT collectors The Khalili Brothers, social media influencers Bryce Hall and Caspar Lee, and even NFT collector Cozomo de’ Medici, as well as Aave co-founder Jordan Gustave and Coinbase Senior Director of Product David Farmer. Tiger Global, Slow Ventures, and Courtside Ventures have also pitched in funding.
But “Crypto’s Club” doesn’t think WAGMI United will live or die on the ownership group’s pocketbooks. That’s where the fans come in. “This unprecedented digital-first, community-powered approach will allow WAGMI United to increase the club’s budget far beyond levels typically seen by an EFL side of this size — providing valuable new fundings streams that will be used to improve the on-field product,” reads the press release.
Those in the middle of the cryptocurrency and soccer fandom Venn diagram may be salivating at the thought of having a crypto-centric club. It recalls the publicly owned Green Bay Packers or Spanish mega-club FC Barcelona, both of which have eschewed ownership groups made up of carpetbagging billionaires with little connection to the community.
This won’t be that—at least not for a few years, at minimum. The English Football League is roughly equivalent to the Minor Leagues in baseball. However, whole teams move up to a better division if they perform well enough (or down if they are among the losingest teams). The English Football League itself has three divisions, each with 24 teams. If, for instance, WAGMI United buys a League Two club, it would need to win promotion to League One, then The Championship, then the Premier League, the top of the English football pyramid.
WAGMI United thinks it’s got it covered. It predicts the club “will quickly charge up the table, build a culture of winning and innovation that leads to continued promotion up the EFL ranks, and eventually, earn a spot in the Premier League.”
But hey. If NFTs could go from all-but-worthless to a multibillion dollar industry in under a year, how hard could creating a winning football club be?
The Stellar Development Foundation (SDF) has been working with the Ukrainian government on their national Central Bank Digital Currency (CBDC) for a while. The collaboration has started to produce results as the SDF, Bitt, and TASCOMBANK recently deployed a pilot project for the electronic hryvnia on this network.
Related Reading | An Introduction To Stellar And XLM: Mission, Control, And Consensus
Per a press release, the partners will test the CBDC’s use cases and its programmable capabilities. These will be leveraged to pay employees at a company called Diia, and to perform payments to merchants and individuals.
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According to the release published by Bitt, the project has been under the supervision of the National Bank of Ukraine aided by their Ministry of Digital Transformation. In that sense, Ukraine’s Deputy Minister of Digital Transformation, Oleksandr Bornyakov commented the following on their CBDC’s test phase:
This pilot project will serve as a technological basis for the issuance of electronic money and is the next key step to advance innovation of payment and financial infrastructure in Ukraine.
During the trial on Stellar, the partners will also test the capacity to issue digital currency with “asset-control capabilities for issue”s”. The banking institution will be in charge of testing the implementation of the hryvnia on Bitt’s Digital Currency Management System (DCMS).
The latter company has been in charge of developing a stablecoin with its payment rails for the National Bank of Belize, and it’s behind the Eastern Caribbean Central Bank (ECCB) initiative to launch a CBDC. The target for this project, per its official website, is to increase “opportunities for financial growth”.
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Similar to this project, the digital hryvnia will use the “moderns software techniques” and alleged scalable and performant benefits from the DCMS. This system will “protect” the user’s data while regulatory bodies still can access “needed” information, the official website adds the following on their DCMS:
Security is designed-in, to use secure defaults, minimize attack surfaces and provide defense-in-depth. Independent modules allow each component to scale independently of others, allowing automatic adjustment to meet variable demands.
Stellar Spearheads Ukranian Initiative
With its DCMS system Bitt will provide secure minting, currency manager, and a monetary transaction network. Thus, tackling three of the most important items in every CBDC project. Volodymyr Dubey, Chairman of the for TASCOMBANK, said:
Cooperation with Bitt to build on Stellar allows us to connect our core banking system with blockchain-based infrastructure, creating an ecosystem that includes a full range of banking products and operations with electronic currency on the Stellar blockchain.
Dubey also expressed excitement to improve the country’s financial products by using virtual assets. The Ukranian Central Bank and TASCOMBANK have long-term strategies that include innovation supported on blockchain technology and the digital economy.
Executive Director and CEO of the Stellar Development Foundation Denelle Dixon added the following:
Stellar is an open network that was designed with asset issuance in mind, and is uniquely suited to assets like the electronic hryvnia. It offers issuers, like TASCOMBANK, a suite of controls that they can configure for their asset control needs while maintaining the interoperability and flexibility of an open ledger.
Related Reading |Stellar To Launch New Europe-Africa Payment Corridor With This Partner
As of press time, XLM trades at $0,26 with a 2.9% loss in the past 24 hours.
XLM on a downtrend in the 4-hour chart. Source: XLMUSDT Tradingview
On Thursday, HSBC and IBM announced the successful test of an advanced token and digital wallet settlement between two central bank digital currencies, or CBDCs, in a cloud environment. The experiment consisted of transactions between CBDCs, eBonds, and forex. IBM’s Hyperledger Fabric and enterprise technology provider R3’s Corda served as the basis of the distributed ledger facilitating the transactions.
The project was overseen by central bank Banque de France as part of a series of tranche projects to implement a digital Euro. Previously the French and Swiss central banks reported positive results on a pilot run of the digital Swiss Franc and Euro. Nevertheless, the two financial institutions issued caution on the subject, citing regulatory concerns.
Mark Williamson, managing director of GFX eRisk, partnerships & propositions at HSBC, said:
Interoperability across different distributed ledgers and technologies was key in demonstrating how to save time, reduce market risk and improve security for transactions between central banks, commercial banks, and in time our clients around the world.
Likhit Wagle, general manager of global banking & financial markets at IBM, added:
As central banks around the world begin to explore the potential for CBDC to bring greater transparency and security to financial transactions, this initiative provides a comprehensive roadmap.
Across the world, CBDCs are gaining traction in part due to their utility as a means to combat the rises of stablecoins, which, to some, represent a threat to the financial system. This month alone, Australian Reserve Bank’s Project Atom CBDC research uncovered numerous benefits. Around the same time, Kazakhstan’s central bank reported positive results on its CBDC pilot project. The Eastern Caribbean CBDC expanded to two other countries, and Russia is prioritizing the development of a digital Ruble.
Gita Gopinath – Chief Economist for the International Monetary Fund – recently said that developing economies should refrain from banning crypto. Instead, she called global regulation of the industry “the need of the hour”.
The Global Challenge of Crypto
Gopinath outlined the regulatory difficulties around crypto at an event by the National Council of Applied Economic Research (NCAER) on Wednesday. She said that global policy on crypto is an urgent need to address the challenges the technology poses to emerging markets.
Moreover, she said banning them was simply impractical, given the global presence that exchanges possess.
“Regulating crypto assets and currencies is essential, especially for emerging and developing economies, as banning them may not work as crypto exchanges are located offshore, which makes it easier for an individual to trade in them despite the ban,” she said.
This September, China announced a ban on all crypto exchanges from the country, after which exchanges such as Bitmart and Biki fled the country. Meanwhile, India is still deliberating over an equivalent ban.
Gopinath placed emphasis on making a ‘global’ policy around crypto, as cross-border transactions make any single nation’s regulations against it quite weak. They can be used to evade “exchange rate controls, capital controls, and capital flow measures,” she said.
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Michael Saylor – CEO of MIcroStrategy, the world’s largest owner of Bitcoin – has highlighted this exact property as extremely helpful from a business perspective. Unlike real estate, Bitcoin can be transferred across borders at “the speed of light” to the most tax-friendly jurisdictions.
Christine Lagarde – President of the European Central Bank – has also pushed for global cryptocurrency regulation, to combat its decentralized “money laundering” capabilities.
Regulation Over Banning
Besides India and China, most other jurisdictions have ruled out banning cryptocurrencies, instead taking a regulatory approach. In fact, many US officials see China’s ban as an excellent opportunity to welcome the industry, capitalizing on its innovation. These include Ted Cruz, Hester Peirce, and Pat Toomey, among others.
Singapore has also chosen not to ban. MAS director Ravi Menon believes crypto could “lead to a very good outcome for the economy and society,” and would rather craft a regulatory framework for it to operate within.
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Circle, the company that created the USDC stablecoin, announced a partnership with public charity Endaoment to create a disaster relief fund. The fund will help mid-western American communities impacted by last week’s deadly tornadoes. The two entities hope to raise $1 million in grants to support the American Red Cross and local non-profits.
Via Endaoment, blockchain enthusiasts will be able to directly contribute USDC or other cryptos using connected wallets with a minimum donation of $20. The funds will be distributed in $20,000 intervals to seven participating charities, the Team Western Kentucky Tornado Relief Fund, Center for Disaster Philanthropy, Team Rubicon, All Hands and Hearts, Midwest Food Bank NFP, American Red Cross, and Mutual Aid Relief. At the time of publication, the fund has received over $4,600 in donations.
Robert Heeger, founder, and CEO of Endaoment, said the following regarding the partnership:
“It is through incredible partners like Circle that we have been able to grant more than $11 million worth of donations to nearly 300 nonprofits this year. With Circle’s support, we can expand our reach and continue to empower the community to allocate charitable gifts to causes in need of funding autonomously.”
An unusual cluster of tornadoes swept across the U.S. Midwestern and Southern states the week prior, with wind speeds reaching as high s 150 mph (241.4 km/h). Kentucky was one of the hardest-hit states, with at least 74 fatalities and more than 100 missing persons still accounted for.
A man whose home was destroyed during the deadly tornado outbreak in Kentucky, plays a hymn on his piano that was spared during the storm. Beauty in the midst of sorrow and pain. pic.twitter.com/9goymGYK3L
TOPSHOT – A woman buys in a store that accepts bitcoins in El Zonte, La Libertad, El Salvador on … [+]September 4, 2021. – The Congress of El Salvador approved in June a law that will make bitcoin legal tender in the country from September 7, with the aim of boosting its economy although analysts warn of a negative impact. (Photo by MARVIN RECINOS / AFP) (Photo by MARVIN RECINOS/AFP via Getty Images)
AFP via Getty Images
A consistent thread about bitcoin has been that if it succeeds, it will inevitably invite government legislation and regulation to shut it down. This has been a backhanded critique of sorts advanced by investors like Ray Dalio who are “on bitcoin’s side”, but worry about its success attracting the attention of the state powers that be.
This isn’t an altogether surprising or irrational fear. We live centuries after the establishment of the nation-state as all-powerful welfare state, military, and taxation hub. It’s clear that state powers are often only reined in by “political” constraints (rather than physical or technical ones). Could governments shut down bitcoin if they wanted to?
This is probably a lot harder than one might think. Bitcoin is somewhat resilient to government crackdowns because of its origin, and the way the network is built. While states, if focused enough, could probably inflict some damage to bitcoin if it was a central state objective across the board, there are many factors for why a “government crackdown” on bitcoin is overrated for destroying the network.
1- It requires large-scale coordination among many different multilateral bodies and states
Since bitcoin is internationalized, it would require consent and coordination among almost every nation-state in order to effectively crack down on bitcoin. While the major world powers (such as the United States and China) have a bloc-like effect, and whereas there has been more coordination (often US-led) on issues such as climate change and corporate tax rates, when you look at issues as diverse as COVID-19 and the tit-for-tats of “strategic rivals” and Olympic boycotts — it is still difficult to see countries focusing on bitcoin in unison.
Large-scale coordination would be required to shut down the network in any meaningful way: otherwise, people could transact and support the bitcoin network in other nations or even in space. A slow nation-by-nation ban can affect the network: at an extreme, an unlikely state-led ban in the United States might choke off bitcoin from American-led financial systems and markets with near-total global reach. Yet, so long as bitcoin was trans-actable across other states, a “global ban” could not be accomplished nor a “government crackdown”.
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2- There is no central node that states can really pressure
One of the most unique points about bitcoin is that there is no central leader figure to pin down. Satoshi’s disappearance, and Hal Finney’s untimely death, have led to a situation where there isn’t a “company CEO” or some other central leader to go after. While there are pressure points nation-states can use to pursue their objectives (for example, physical concentration of miners, key technical contributors still constrained by borders), there isn’t a central one, but rather a set of diffused ones. We saw this when the Chinese state banned bitcoin mining in its territory: did that spell the end of bitcoin? No: miners simply shifted their equipment elsewhere, and within a few months, hash rate was as high if not higher than what it was before.
States are not used to dealing with organizations like this: they are used to dealing with multinational corporations to a certain extent, but there are usually a set of central pressure points and leadership that a state can lean on to get that corporation to adhere to certain rules and regulations. That, due to bitcoin’s unique creation story, is very unlikely to happen with any attacks on the bitcoin network.
3- Code is speech
In the United States, code is regarded as “protected” speech — software source code which powers bitcoin is protected by the First Amendment. In order to attack the distribution of code that powers bitcoin, countries like the United States would have to fundamentally change themselves and subvert long-held covenants of limited powers and the rule of law. This is not impossible (bitcoin, over a decades and even centuries long time horizon is a bet that (some) technical constraints are better than purely political ones for maintaining rule of law) but would be very out of character, and probably politically untenable.
4- States can be induced by bitcoin for commercial and other reasons
The Internet may never have been encrypted at all — export controls were initially placed on encryption, and commercial uses were seen skeptically. However, states partially relented when the commercial possibility of the Internet became clear. Now encryption powers communications as well as online banking and e-commerce sales. This is not something states like: the Five Eyes and allied countries want to subvert end-to-end encryption and authoritarian states like the Chinese state either have backdoors or other mechanisms to promote social control. Yet it shows that, when faced with something that might threaten national security, the need for states to show GDP outcomes and to deliver wealth to their peoples might override their preferences in other areas.
As more and more countries adapt bitcoin in some fashion, this pressure will become larger until perhaps one day, we might see a bitcoin-friendly bloc of nations emerge similar to the Cairns Group for agriculture. Some will find that their domestic power-generation is more efficiently parsed through open-source bitcoin rather than supporting the fractional reserves of other countries. The more states are turned over to supporting the bitcoin network, the harder it will be for other states to attack it.
5- Bitcoin’s threat model has long included state-level powers
The way bitcoin is implemented makes it (more) prohibitive for any centralized collection of computers to disrupt the system.
With more than 170,000 PH/s of hash rate securing the system (as of the date of writing) from a coordinated 51% attack (where an attacker could take over the system and propogate invalid spends in order to down the system for legitimate users, or to benefit monetarily from it), a projected security budget of around $45-60mn a day, and enough stakeholders (from investors, code contributors, analytics firms, miners and businesses — and now governments — that accept bitcoin) who have placed their financial livelihoods on monitoring the chain such that bitcoin could be secure beyond its fundamental dynamics — bitcoin is large enough to warrant significant resources for any attack, resources that wouldn’t be available for just any nation-state, and which would have to be continually deployed in a way that would make it hard to obscure who the attacker was.
—-
We live in a heady time where “magic Internet money” has suddenly become the concern of Clausewitz readers around the world. As bitcoin grows more prominent, the possibility that it attracts state powers to disrupt or fully coopt it grows — yet those who play some part in the network, either from investing, transacting or supporting its infrastructure, can rest assured that the system has some inherent properties that make it more resilient than you might expect to even the strongest of attacks.
