Cryptocurrency exchange Bittrex will close its U.S. platform on April 30, according to an announcement from the company on Friday. After nine years of operation, Bittrex co-founder and CEO Ritchie Lai stated that the current U.S. regulatory and economic environment made it “economically unviable” for the exchange to continue operating in the country.
Lai cited unclear regulatory requirements that are enforced without appropriate discussion or input, resulting in an uneven competitive landscape as the reasons behind the closure. He added that operating in the U.S. was no longer feasible for Bittrex.
Despite the shutdown of its U.S. platform, Lai assured customers that all their funds are safe and available for withdrawal. The closure will not affect Bittrex Global, which operates in Europe, Canada, and South America, among other locales, and will remain open for trading.
Bittrex’s decision to shut down its U.S. platform is not the first time a crypto exchange has faced regulatory hurdles. In recent weeks and months, U.S. regulators have increased their oversight of crypto-related companies. Coinbase recently disclosed receiving a Wells Notice from the U.S. Securities and Exchange Commission (SEC), while Kraken paid a $30 million fine in a settlement with the same agency after shuttering its crypto staking service.
Binance and its CEO and founder Changpeng Zhao were also recently named in a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC). The complaint alleges the offering of unregistered crypto derivatives products in the U.S.
The crypto industry has been grappling with regulatory challenges in the U.S., with some companies choosing to exit the market altogether. However, other companies, like Bittrex Global, continue to operate and expand their reach in other parts of the world.
Bittrex Global operates in over 100 countries and recently launched a new platform for institutional investors. The exchange’s closure of its U.S. platform may be a strategic decision to focus on expanding its operations elsewhere.
The crypto industry is still in its early stages, and regulatory challenges are expected to persist. The industry’s stakeholders will need to work with regulators to find a balance between innovation and compliance to ensure the healthy growth of the industry.
The crypto market cap has recently begun to recover regaining $2 trillion. However, an analyst thinks a bear call could be in place given several similarities between the dot-com bubble in 2000 and the current crypto market.
Related Reading | Crypto Market Cap Regained $2 Trillion With Bitcoin Reaching At $45K
Crypto Mirrors The Internet. Good Or Bad News?
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Recent studies show that the adoption curve of cryptocurrencies is looking similar to the early adoption of the internet around 1993, which could point in at a hyper-inflection point to happen soon where crypto and its related technologies become a regular tool used in everyone’s day-to-day lives. This could call for demand to increase and value to rise with it.
However, an analyst predicts that similarities with the internet could turn into a repetition in history where the crypto market would drop around 80% as the Nasdaq did back in 2000 amidst the dotcom bubble, a result of speculative investments and an overabundance of capital markets funding dotcom startups that later failed to make a return.
Investopedia explains that the dotcom bubble “was a rapid rise in U.S. technology stock equity valuations fueled by investments in Internet-based companies in the late 1990s.” The Nasdaq rose five-fold between 1995 and 2000, but then dropped reaching almost 77% in losses by Oct. 4, 2002.
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“Even the share prices of blue-chip technology stocks like Cisco, Intel, and Oracle lost more than 80% of their value. It would take 15 years for the Nasdaq to regain its peak, which it did on April 24, 2015.”
Analyst Tasha Che shared via Twitter a take that traces the possibility for the crypto market to enter an extended bear market with a similar drop to the Nasdaq’s in the 2000s. Che sees these main similarities:
By 2000, the internet had a user base of 413 million people, around 6% of the world’s population. Nowadays, around 60% of the global population is using the internet, says Internet World Stats. In parallel, recent data collected by the GWI indicates that 10% of working-age internet users own some form of cryptocurrency, roughly 6% of the current world’s population as well.
Both markets had a multi-year bull run due to the hype over “breakthrough tech” while being “thinly supported by actual use cases”.
“Monetary policy headwind”. In a similar macroeconomic scenario, in 2000 The Federal Reserve lifted 6 rate hikes by quarter-point in 1 year in an effort to slow down the rising prices of goods and services.
“In 2000 Bloomberg Internet Index reached a peak market cap of $2.9 trillion (about $3.5 trillion to today’s dollars)”, which then fell to $1,2 trillion by the end of the same year. Chen believes that “Given internet stocks back then cover wider subsectors than crypto today, a $2.5-3 trillion market cap would put crypto at par w/ dot-com valuation then.”
Crypto total market cap at $1,9 trillion in the daily chart | Source: TradingView.com
The expert further noted that the two years that Nasdaq dropped 80%, “It was blessing in disguise for internet industry–weeded out opportunists, gave real builders breathing room to build & allowed organic growth. But absolutely brutal for investors.”
Chen states that this opinion is not “a straight bear call” given that “history doesn’t repeat blow by blow”, but with such a similar setup she thinks it may be “in the cards”. The missing factor is a blow-off top, which is defined as “a sudden rise in price and volume, followed by a sharp decline in price also with high volume.”
If that blow-off top happens in the next few months by going back to the $3 trillion cryptos total market cap range, Chen thinks we would “almost surely see history rhymes.”
Related Reading | Crypto Winter Is Thawing With Bitcoin And Ethereum Rebound Signal
The Opposite View
However, other users pointed out that Chen’s data does not properly take into account the nearly 5x M2 money supply increase over the last 20 years, which has risen from $4.6 trillion in 2000 to $18.45 trillion in 2020.
Another user noted that the two markets may not be systemically correlated outside of sentiment given that the Internet speculation in 2000 gave foot to the overly inflated market, but the now speculation in crypto could be seen as “a parallel liquid market.”
It was also pointed out that crypto represents a different case due to the assets being more reflexive. Growth in usage can reflect in price and increases in price can lead to usage. However, the dotcom bubble did not slow down internet usage as “nobody needed to buy AMZN to use Amazon.”
Chris Sununu, who has served as the Governor of New Hampshire since 2017, has established a commission aimed at investigating the technology and laws around digital assets in addition to recommending new legislation.
On Wednesday, the New Hampshire Governor’s office announced it would be issuing Executive Order 2022-1 to create the Governor’s Commission on Cryptocurrencies and Digital Assets. Governor Sununu cited the “rising use and acceptance” of crypto as well as the growth of distributed ledger and blockchain technologies in his decision to establish the commission.
According to the executive order, the crypto commission will have 180 days — until Aug. 8 — to submit a report to officials within the New Hampshire state government consisting of a “review and investigation regarding the current status of the cryptocurrency and digital asset industry” as well as on applicable laws in the United States and abroad. The commission will have the authority to hold public hearings to hear from industry and regulatory experts, and “make findings and determinations regarding the role and effectiveness of current state laws and regulations governing cryptocurrencies and other digital assets” while balancing economic competitiveness, the possible impacts on the financial system, and privacy concerns.
The order states that the commission will consist of “three public members with recognized experience with cryptocurrencies, digital assets and the provision of services to institutions or consumers with respect to digital assets,” the state Attorney General, Commissioner of the Bank Department, a state senator, a state representative, a representative of the New Hampshire Bankers Association, a representative of the Cooperative Credit Union Association, and three appointees. The New Hampshire Governor also has the authority to designate his own substitutes for most of the commission members.
Governor Sununu cited “well intentioned legislation regarding cryptocurrencies and digital assets” in the order, likely referring to a bill proposing state agencies be allowed to accept crypto for tax payments — the legislation failed in 2020, with many lawmakers invoking the volatility of Bitcoin (BTC). The governor also named Ether (ETH), Binance Coin (BNB), Tether (USDT), and USD Coin (USDC) as tokens quickly “gaining momentum.”
“New Hampshire is a hub of financial innovation, and this Executive Order will further our commitment to attracting high quality banking and financial businesses in a safe and responsible manner,” said Governor Sununu.
Related:US lawmaker pushes for state-level regulations on stablecoins at hearing on digital assets
Possibly due to the lack of a clear regulatory framework at the federal level, lawmakers in U.S. states seem to be stepping up legislative proposals to recognize, invest in, or otherwise handle crypto and blockchain. In December, Florida Governor Ron DeSantis offered a budget proposal suggesting local businesses be allowed to “pay state fees via cryptocurrency directly to the Department of State.” Earlier this month, a member of the Tennessee House of Representatives introduced legislation which would establish a study committee on crypto and blockchain.
Bitcoin price recovered to within $45k after sliding below $44k as analysts indicated probable swings for the flagship cryptocurrency. The release of US inflation rates seems to have had no effect on the king cryptocurrency.
Bitcoin’s price rose past a crucial barrier overnight Wednesday, reaching $45,300, before falling as the broader market dipped in early trades after US markets opened.
Bitcoin Unaffected By Inflation Rates
Over the last 24 hours, BTC/USD has moved in a range of $43,402.81 – $45,398.91, exhibiting high volatility. Trading volume has climbed by 16.21% to $28.8 billion, while the overall market cap is around $860.47 billion dollars, leading in a 42% market dominance.
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As investors analyzed new US inflation data, which came in at 7.5% year-over-year vs an expected 7.3%, the earlier decline took shape. Risky assets like crypto and equities have reacted negatively, with all eyes on the Federal Reserve’s upcoming rate hike in March.
BTC/USD steadies above $45k. Source: TradingView
Despite being 0.2% higher than predicted, rising inflation did not have the same favorable impact on risk assets like Bitcoin as it had in recent months.
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The S&P 500 fell 0.23%, the Nasdaq composite fell 0.18%, and the Dow Jones Industrial Average remained barely above the flat line.
According to analysts, the Federal Reserve may now have additional motivation to begin raising interest rates sooner due to the speed of year-over-year price increases.
Crypto trader and analyst Michael van de Poppe observed:
“The Consumer Price Index (CPI) results for the U.S.A. are coming in at 7.5% year-over-year, the expectations were 7.3% year-over-year.$DXY is shooting up and risk-on assets are dropping down like Bitcoin & equities.Likelihood that the FED will start rate hikes in March.”
However, for economist Lyn Alden, it was cash savers who had been losing the most from inflation. she noted alongside a chart:
U.S. CPI vs. effective federal funds rate chart. Source: Lyn Alden/ Twitter
“Official inflation currently has its biggest gap over short-term interest rates since 1951. People holding cash in a bank or T-bills over the past year lost over 7% of their purchasing power.”
Related article | Investors Take Refuge In Bitcoin As Inflation Rises
BTC Will Hit $50k In Short term
The Fed will be put to the test here, as they had hoped for a steady tightening cycle rather than a hasty tightening that would appear to be a policy blunder. The political pressure on the Biden administration and Democrats will increase as core inflation rises over the Fed’s objective and real average hourly earnings fall. Although November is still a long way off, this inflation report shows that price hikes are everywhere, and there is rising opposition to new fiscal stimulus measures that would exacerbate pricing pressures.
As investors predict that pricing pressures may be peaking just before the Fed’s March policy meeting, US stocks have regained most of their inflation-related losses.
Given the rise in global bond yields, Bitcoin prices are holding up well. Bitcoin’s optimal future environment is risk appetite, which may be tough to achieve until after the Fed’s first couple of rate hikes. Institutional investors in Bitcoin are focusing on Treasuries because the momentum trade appears to be quite simple. For the short term, Bitcoin appears to be settling in between $40,000 and $50,000.
Cameron Winklevoss, co-founder of Gemini, feels Bitcoin is still the best inflation hedge, corroborating thoughts from the crypto community and even mainstream investors.
Inflation hit 7.5% in January. Highest in four decades. It continues to accelerate.
The best way to shield yourself from this pernicious, silent tax on your life’s work — your blood, sweat, and tears — is bitcoin.
— Cameron Winklevoss (@cameron) February 10, 2022
Related article | Bitcoin Aims For $48K? BTC Reacts Upward To U.S. Inflation Report
Featured image from iStockPhoto, Charts from TradingView.com
XLM has been following the general sentiment in the crypto market and records bullish momentum in lower timeframes. The cryptocurrency records high volatility in the past day, as the U.S. published its latest Consumer Price Index (CPI) which continues to trend higher.
Related Reading | Stellar To Deploy Smart Contracts By End Of 2022? XLM Reacts To The Upside
As of press time, XLM is trading at $0.23 with a 1.7% loss in the last 24 hours, a 3.2% and 22.6% profit in the last hour and 30 days, respectively.
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XLM moves to the upside on the daily chart. Source: XLMUSDT Tradingview
Although XLM has been following the general market trend, it has been lagging when compared to Bitcoin, Ethereum, and other largest cryptocurrencies. Data from Material Indicators suggest the recent upside move to the upside was sold off by small investors.
As the market approached the CPI print, investors with ask orders of up to $10,000 drove the price down, but bulls were quick at reverting the downside trend. This positive reaction suggests investors have already price-in inflation impact on the market, at least, for the short term.
Bullish intraday reversal on the open. Market saying inflation doesn’t matter for now any longer.
— Alex Krüger (@krugermacro) February 10, 2022
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Thus, XLM’s price and the crypto market could see an extended bullish trend. Additional data provided by Material Indicators shows that Stellar bounced back on critical support, as there was a cluster of bidding orders around today’s lows near $0.22.
To the upside, $0.240 could operate as the next major resistance area, but bulls could breach through these levels if they managed to sustain momentum. The CPI print was higher than expected with a 7.5% and will continue to be a macro-economic risk for XLM bulls and crypto bulls.
Source: Two Prime Digital Assets via Twitter
However, the short term seems poised for more gains. At least until mid-March when the U.S. Federal Reserve should announce a decision on their monetary policy.
The Bullish Case For XLM And The Stellar Ecosystem
XLM’s price recent price action could be supported by several bullish developments on the Stellar ecosystem. Denelle Dixon CEO at the Stellar Development Foundation (SDF) summarized some of the use cases hosted on this ecosystem and impacting the real world.
First, Dixon mentioned the partnership with MoneyGram which has allowed the payment company to provide its users with a “way to seamlessly convert USDC to cash, or cash to USDC”. Thus, creating a gateway from fiat to crypto and vice-versa with its low costs and fast settlement improvements.
In addition, Dixon highlighted the Stellar-based use case developed with Tribal Credit which enables merchants in Mexico to send local currency payments to the United States. These payments are received by U.S.-based businesses in dollars which removes trading friction for small and medium-sized operations.
Related Reading |Stellar Development Foundation Launches New Account Model, How Users Will Benefit
Thus, potentially onboarding more companies onto the Stellar ecosystem. In addition, Leaf Global Fintech has developed a solution with a UNICEF-backed digital wallet that lets people save money in multiple currencies, Dixon said, to help refugees to protect themselves against inflation, move money across borders, and protect themselves against theft. Dixon concluded with the following:
Blockchain is real, it’s here, and it’s solving real problems. It’s time we start talking about how it’s already unlocking new opportunities for migrant workers, refugees, the unbanked, and small and medium businesses all over the globe.
CLEVELAND, OHIO – SEPTEMBER 29: U.S. President Donald Trump and Democratic presidential nominee Joe … [+]Biden participate in the first presidential debate moderated by Fox News anchor Chris Wallace (C) at the Health Education Campus of Case Western Reserve University on September 29, 2020 in Cleveland, Ohio. This is the first of three planned debates between the two candidates in the lead up to the election on November 3. (Photo by Scott Olson/Getty Images)
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No, it’s not because they will agree Bitcoin is a new and better form of money.
In fact, it won’t be altruism uniting bitterly divided left-wing and right-wing politicians in their advocacy for the technology. Rather, the reason Democrats and Republicans will embrace Bitcoin is because Bitcoin will create jobs – high-income jobs, particularly, in heartland and rural America.
If you’re new to Bitcoin, it might not be clear why this is the case. Understanding what Bitcoin achieves, why it matters, and why it differs from other cryptocurrencies remains difficult, and for some like myself, it’s been a career-long pursuit.
Simply put, Bitcoin requires energy. A truly decentralized monetary system, Bitcoin allows anyone in the world the opportunity to provide the computation it needs to update its global ledger of transactions.
A decade ago, this energy could be provided with a graphics card (like the one in your gaming computer) or on a laptop (like the one you might be reading this article on), and the Bitcoin you received wouldn’t have been worth much. In 2010, the 50 BTC you received for adding a block to the ledger might have netted you just $50 at most.
But that’s no longer the case. As Bitcoin has become more popular, it has become more valuable. Today, those who mine Bitcoin blocks receive 6.25 BTC worth $250,000, a figure that’s incentivizing advances in the business of mining Bitcoin.
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This has encouraged America’s entrepreneurs to do what they have always done, take advantage of opportunity to build profitable businesses. Yet, it’s becoming clear the kind of businesses Bitcoin entrepreneurs are creating are novel within our economy.
Just take a look at the following chart, which shows the distribution of new Bitcoin mining operations. It doesn’t take much to see this differs from the hiring profile of the average Silicon Valley unicorn or Wall Street upstart.
US bitcoin mining power distribution by state. Bloomberg
Foundry USA
As the co-authors of a new book on Bitcoin policy, we’ve seen this transition firsthand, and we have to admit, it’s even surprised us to see the large number of public U.S. companies that are now mining Bitcoin and serving our energy grid.
In the following article, excerpted from our book, Bitcoin and the American Dream, we detail how Bitcoin is making economical new forms of energy production, revitalizing American towns, and incentivizing the use of formerly wasted energy.
Bitcoin Creates Jobs and Revitalizes Industry
In gritty, proud, blue-collar communities across middle America, the decline of domestic manufacturing is a major concern.
At the dawn of the 1980s, US manufacturing accounted for one-fifth of all American jobs. More significantly, it supported the livelihood of one-third of American men between the ages of 21 and 55 with a high school education or below.
Georgia, Indiana, Michigan, Minnesota, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, West Virginia, and Wisconsin were decimated, losing 5.5 million jobs since the start of the new millennium.
For too long, this has been a problem without answers for America’s Middle Class.
The struggle to replace these jobs has been an unrealized priority of presidents from both political parties. Politicians blame foreign competition, burdensome regulation, technical automation, and corporate outsourcing, but for Rust Belt Americans there has been too much talk with too little progress.
However, there is hope. Bitcoin is uniquely poised to address this problem. Its industry thrives in exactly the communities domestic manufacturers abandoned long ago.
Bitcoin Mining Is Big Business
Bitcoin mining is a process where large numbers of specialty computers are deployed to secure the monetary network. The business is not wholly different from large-scale data center operations. Miners generate the computations necessary for Bitcoin’s operation and security, and receive new money issued by the software. They secure transactions on a global public ledger, which anyone can verify.
Bitcoin miners consume megawatts of electricity. The power requirements are similar to auto factories or smelting plants. Hence, these businesses are finding the factories of the Rust Belt an attractive destination.
This is a notable trend. No other industry currently offers a competing vision for how to revive these decommissioned facilities.
Unlike today’s manufacturers, which are reducing jobs through specialization, Bitcoin miners have the need for a large variety of employees. Jobs are centered on equipment repair, and facilities management. They may also require expertise in construction, HVAC, and electrical engineering as well as finance, sales and marketing.
Jobs in the Bitcoin sector are also high-paying. The industry average for salaries is around $108,000 per year. That could go a long way in areas that badly need to replace manufacturing employment.
Rebuilding Manufacturing Towns
A great example of the revitalization Bitcoin mining can bring comes from the small town of Rockdale, Texas. Rockdale was hit hard when one of the nation’s top aluminum smelters, the town’s largest employer, shut down.
Today, the story couldn’t be more different.
This former manufacturing town had just the abundant energy Bitcoin mining facilities needed. Attracted by this infrastructure, Riot Blockchain, a publicly traded company, was inspired to build a brand-new 300-megawatt mining facility in the town.
Two hundred construction workers were dedicated to the revival effort, and as of 2021, Riot is producing 500 bitcoins per month ($22 million) at this facility.
Emboldened by this success, Riot is expanding further. It is building more facilities in Rockdale and creating even more local jobs as its business grows.
Promoting Renewable Energy
Offsetting excitement about job creation in rural America are concerns about the demand Bitcoin miners place on our vital national electrical grid. Environmental justice and climate change are concerns for voters, including many swing-state independents.
But the facts on Bitcoin mining do not match accusations leveled by critics.
Bitcoin is not dependent on how its energy is supplied. There is nothing about mining equipment that needs to use coal or burn oil. What’s more, miners are portable and can go directly to untapped green power sources. Say an American energy business wants to build a new facility to harness our untapped wind, hydro-electric, or solar energy, they can now mine Bitcoin to recoup costs prior to connecting to the grid.
A lot of renewable energy is not portable, so energy costs vary significantly based on location and timing. Wind energy outside Fargo is worth less than wind energy outside Chicago, and solar energy in the middle of the day is cheaper than in the morning.
Miners, however, are highly flexible. All miners need to sell Bitcoin to the global market is an internet connection and a supply of energy.
Already, this is having a powerful impact. A 2021 report shows that 57% of all American Bitcoin mining is conducted with sustainable power sources.
Grid Stabilization
Bitcoin mining finances the construction of renewable energy production by providing a guaranteed consumer.
Once connected to the grid, miners can balance out the fluctuating energy supply from renewables like solar and wind. They are responsible consumers of energy, mining bitcoins during times of low demand, and serving the grid during times of peak demand. This ensures other electricity customers do not suffer rolling blackouts. Utilities call this a “controlled load resource,” and miners are a fast-responding, large-scale resource.
Both Bitcoin mining and gas turbines close the gap between supply and demand, but gas turbines do it by raising supply, whereas Bitcoin miners do it by reducing demand.
Mining finances the initial buildout of renewable energy production, ahead of connection to the grid, and once connected, it continues to finance the operations of the utility.
This addresses a key challenge for renewable energy: matching supply and demand.
Stranded Energy
Even more promising is how Bitcoin mining makes investing in stranded and renewable energies more cost effective for entrepreneurs and energy consumers.
Bitcoin miners can set up at the site of energy production, and use energy that would otherwise go wasted. This is called stranded energy, because there’s no economical way to get the energy to where it might be used.
One example of stranded energy is flare gas. Petroleum wells are located in remote rural areas, and there are often no pipelines that can transport this gas to the market. This means most producers vent or flare that gas into the atmosphere, adding pollution and wasting a potential source of energy.
Because Bitcoin miners are portable, they can run off of flare gas, and this has already become an industry of its own. There are companies that mine Bitcoin using shipping containers and tractor trailers filled with specialty equipment. These can pull into a remote oil field, even one surrounded by snow, farms or desert, and mine Bitcoin.
Dairy and pork farmers are even using animal waste, processing it on site and using the energy to mine Bitcoin, as an alternative to risking water table contamination in landfills. This naturally occurring methane product, which has high amounts of greenhouse gas emissions, is now being repurposed as fuel for mining. Utilizing an overlooked stranded resource, mining could benefit the balance sheets of America’s farmers, an industry with notoriously slim margins.
In short, with Bitcoin, there is now a viable use for America’s stranded energy. If aided by smart policy, it could bring revenue to rural communities, strengthening our energy grid and reducing pollution.
Alternatives to Bitcoin Mining
The environmental impact of Bitcoin mining is not it’s only popular misconception.
Many politicians want to encourage the development of alternative cryptocurrencies on the basis they are less energy reliant. But while these ambitions are well-intentioned, the investors backing these networks lack an understanding of Bitcoin’s design and the drawbacks that come from these modifications.
As outlined before in this book, Bitcoin is decentralized. No individual enjoys special privilege over any others. This is unlike our current financial system where there are distinct advantages for gatekeepers and the wealthy.
Key to Bitcoin’s decentralization is the free market competition for Bitcoin enabled by proof-of-work, the consensus method that requires Bitcoin mining. Proof-of-work allows anyone from anywhere in the world to mine Bitcoin, whether this is a farmer in rural Iowa or an ambitious stranded energy producer in remote Alaska.
Miners just have to follow the rules and provide computation.
Alternative models do away with this system, removing the need for energy, and they do not create jobs or stabilize our energy grid. These systems share many of the same pitfalls as our traditional financial system, only with new gatekeepers.
“Bitcoin and the American Dream” isnow available in full on Amazon.
The market is reacting negatively to the consumer price index’s report on U.S. inflation.
Bitcoin, Ethereum Dip on Inflation Update
U.S. inflation has hit a 40-year year-on-year high, and crypto assets are sliding in response.
BTC/USD (Source: CoinGecko)
Bitcoin and Ethereum both dipped Thursday immediately after the Labor Department reported that the consumer price index had jumped 7.5% since last year. Price hikes in January contributed to the yearly rise as the cost of all items increased by 0.6%.
The 7.5% figure is the highest U.S. inflation rate the CPI has recorded since 1982. The Dow Jones had estimated that the figure would come in at 7.2%. Markets quickly reacted as the news that the rate had surpassed predictions broke, with futures on the S&P 500 and Nasdaq-100 respectively falling 0.8% and 1.3%.
Bitcoin took a 3.5% dip from around $45,000 to $43,400, while Ethereum fell from around $3,250 to $3,100. Many other lower cap assets, including the alternative Layer 1 coins Solana, Avalanche, and Terra, were harder hit.
The slump across global markets marks a stark contrast to the reaction to the news that U.S. inflation had hit record levels in November, when Bitcoin and Ethereum both rallied to all-time highs on the same day. The difference this time around is that the 7.5% jump indicates that the Federal Reserve is likely to push ahead with significant interest rate hikes in 2022 as planned (when interest rates increase, risk-on assets tend to tumble as the cost of borrowing money jumps).
The Fed first signaled that interest rate hikes would be coming in December, and crypto assets dipped on the news. Markets then dipped when Jerome Powell confirmed the rate increases in January. The market has looked shaky since, with both Bitcoin and Ethereum maintain momentum. They’re respectively down 37.5% and 36.2% from their highs recorded in November.
With interest rate hikes looking increasingly likely this year, crypto believers will be hoping that the market can make a recovery without spilling too much more blood.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
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The Philippines was ranked third in Southeast Asia in terms of adopting of digital assets, according … [+]to Chainalysis.
AFP via Getty Images
Philippine Digital Asset Exchange (PDAX) has raised more than $50 million in a funding round led by U.S. investment firm Tiger Global Management as the cryptocurrency exchange looks to make virtual assets more accessible in the Southeast Asian country.
UBX, the venture fund of UnionBank of the Philippines, which counts one of the country’s richest clans, the Aboitiz family, as its largest shareholder, has taken part in the financing round, PDAX said in a statement on Thursday. Other investors include Kingsway Capital, Jump Capital, U.S. blockchain payments firm Ripple and DG Daiwa Ventures, the investment company jointly established by Japan’s Daiwa Securities Group and Digital Garage, among others.
“Today, PDAX facilitates the exchange of crypto and fiat currencies, and enables payments in and out of metaverse applications,” Nichel Gaba, founder and CEO of PDAX, said in the statement. “We are in the middle of developments that will continue to make access to digital assets safer, easier and more efficient for everyone.”
Nichel Gaba, founder and CEO of PDAX.
Courtesy of PDAX
Tiger Global led another $12.5 million funding round in PDAX last August, according to the crypto company. BC Group, a Hong Kong-listed firm that runs the city’s first licensed digital asset platform named OSL, also participated in the round.
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The new investments underscore the potential for cryptocurrencies in the Philippines. The country was ranked third in Southeast Asia in terms of adopting of digital assets last year, according to blockchain data platform Chainalysis. Some blockchain-based games that allow players to earn cryptocurrencies have become an income source for people in the Philippines as the pandemic cut down on physical jobs.
PDAX was established in 2018 by Gaba, who spent nearly a decade working in various roles in investment banking, including HSBC. The crypto exchange is one of the 18 licensed virtual asset service providers in the Philippines as of December, according to the country’s central bank.
PDAX’s mission to make crypto investments accessible to people in the Philippines has attracted the likes of more established players in the emerging industry. The company said it had struck partnerships with BitMex Ventures, the investment arm of derivatives exchange BitMex, as well as ConsenSys, the blockchain software firm that operates the popular MetaMask crypto wallet.
PDAX has also teamed up with the UnionBank and the country’s treasury bureau to launch a blockchain-based app that allows traders to invest in retail treasury bonds.
Bitcoin (BTC) and Ether (ETH) are sure long bets for 2022, prominent investor and commenter Zhu Su says.
In a tweet on Feb. 10, Zhu, co-founder of hedge fund Three Arrows Capital (3AC), argued that BTC and ETH were the best options for investment this year, along with oil, while the S&P 500 is a no-go.
Zhu: 2022 macro trades “pretty clear”
Despite concerns that deflationary pressures could take Bitcoin and altcoins down with equities, not everyone believes that 2022 will be a red year for hodlers.
The picture is complex — some are eyeing a “melt-up” for stocks and crypto as a result, thanks to positive correlation. Others feel a painful period is due across the board, but that at least Bitcoin will emerge stronger thereafter.
Ex-BitMEX CEO Arthur Hayes, meanwhile, has been solidly gloomy on the macro outlook since the start of the year.
For Zhu, however, there are now “pretty clear” places to hedge cash for the coming three quarters.
Think the year’s macro trades are pretty clear for me now:
1) long oil dec22, dec23 fwd
2) long btc, eth, and other high-liquidity crypto as hard money
3) short russell/spx
4) short Meta + Apple / long Google + Microsoft
— Zhu Su (@zhusu) February 10, 2022
An additional Twitter post agreed that adding Visa and MasterCard as fiat payment processors was also a “no brainer” for shorts.
“An insane 24 hours”
The forecast followed rumors that BlackRock, the world’s largest asset manager, is allegedly aiming to enter the cryptocurrency space.
According to several people with knowledge of the matter quoted by mainstream media, BlackRock clients could soon be able to trade crypto, while the giant will also facilitate credit in return for crypto collateral.
One source described BlackRock’s approach as “looking to get hands-on with outright crypto.”
The Canadian branch of Big Four accounting conglomerate KPMG announced it had added both Bitcoin and Ethereum to its balance sheet this week.
All in all, in the words of popular trader and analyst Pentoshi, adoption has fuelled an “insane 24 hours.”
$BTC
Insane 24 hours
Some random Canadian company bought way less $BTC than I own
Russia adopted crypto
Blackrock wants Bitcoin
El Salvador Bonds approved
So why price struggle here?
Reclaims = safety off invalidations
Does taking what the market gives pay again? https://t.co/OyTmlSdRlg pic.twitter.com/F3ibYnjjmX
— Pentoshi Forbes worst trader 40 years running (@Pentosh1) February 10, 2022
As Cointelegraph reported, however, near-term BTC price gains remain far from a dead certainty for the bulls.
A top-30 crypto asset by market cap is skyrocketing after the U.S. Department of Justice announced it had seized nearly 80% of Bitcoin (BTC) stolen years ago from the Bitfinex crypto exchange.
UNUS SED LEO (LEO), the utility token of the Bitfinex crypto exchange, is up 43% over the last 24 hours.
At time of writing, LEO is trading at $7.12. The utility token of the Bitfinex crypto exchange currently boasts a market cap of $6.7 billion, ranking it as the 26th–largest crypto asset by valuation.
In a statement announcing the seizure by the US authorities, Bitfinex says that if it receives the seized Bitcoin, it will use 80% of the funds to repurchase LEO tokens before sending them to an inaccessible wallet address.
“If Bitfinex receives a recovery of the stolen Bitcoin, as described in the UNUS SED LEO token white paper, Bitfinex will, within 18 months of the date it receives that recovery use an amount equal to 80% of the recovered net funds to repurchase and burn outstanding UNUS SED LEO tokens.”
According to the U.S. Justice Department, federal authorities seized more than 94,000 Bitcoin directly linked to the August 2016 hacking of Bitfinex. Alongside the seizure, two individuals were arrested in Manhattan, NY, and charged with a conspiracy to launder the billions of dollars worth of Bitcoin.
The seized Bitcoin is currently worth over $3.6 billion. Approximately 119,754 Bitcoin were stolen from Bitfinex in the 2016 security breach. Bitcoin was trading at around $600 in August of 2016, giving the stolen Bitcoin a value of just under $72 million at the time of the theft.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
