News Updates August 09, 2022
1. Bitcoin drops to support as looming CPI print shakes up crypto and stock markets
Traders tuck their tails as this week’s CPI print approaches and BTC and ETH price fall back into range to test underlying support.
Crypto and equities markets took a bit of a tumble on Aug. 9 as traders grew a bit skittish ahead of tomorrow’s Consumer Price Index (CPI) report. The details of the print will shine a light on whether the Federal Reserve’s aggressive interest hikes are effective in tamping runaway inflation and it could have an impact on the size of future hikes.
Earlier in the week, Tesla CEO Elon Musk suggested that July data will reflect the United States reaching peak inflation and that any recession will be “mild to moderate.” Right now, the consensus is that July data will be lower than the record-breaking 9.1% figure seen in June. The price of energy commodities (oil, natural gas) noticeably decreased in July and the Fed is hopeful that the previous back-to-back 0.75 basis-point hikes will combat soaring prices in other parts of the economy.
As is custom, Bitcoin (BTC), Ethereu (ETH) and most altcoins pulled back as traders de-risk ahead of the CPI print. BTC price dropped as low as $22,800, while Ether corrected to $1,670. The rationale that traders are sheltering in stablecoins is sensible, but from a technical analysis point of view, Aug. 9’s pullback is simply a lower support test after the most recent support-resistance flip of the past week, and large-cap assets like ETH and BTC continue to trade within their multi-week ranges.
Traders take shelter until CPI publishes
According to independent market analyst Michaël van de Poppe, the fear surrounding the Aug. 10 CPI is “unwarranted” and once the series of retests is complete, BTC price should rally toward $28,000.
2. Bitcoin’s next-level Taproot upgrade now stores 0.06% of all BTC.
Since Bitcoin (BTC) underwent its Taproot upgrade in November 2021, the amount of the flagship cryptocurrency on its Pay-to-Taproot (P2TR) outputs has been increasing, moving in a gradual uptrend since March 2022.
As it happens, these stores have grown to now hold 11,740 BTC or 0.06% of all BTC supply in existence, according to data from Coin Metrics ‘State of the Network’ newsletter published on August 9.
Taking into account the price of Bitcoin at press time – $23,057, according to CoinMarketCap – this means that nearly $271 million in the maiden token currently occupies the Taproot outputs.
Adoption is slow but sure
As the report states:
“In aggregate BTC terms, this is small but historically the adoption rate of Bitcoin upgrades has been slow to start.”
3. Bitcoin Closes Second Consecutive Weekly Candle Above 200-Week Moving Average (MA), Is The Bottom In?
In a tweet today, Bitcoin analyst Ali Martinez highlighted that Bitcoin printed the second weekly candle above the 200 weekly moving average, noting that the 200 weekly moving average has served as an indicator of the end of bear markets since 2014.
“Bitcoin printed a second consecutive weekly candlestick close above the 200-week MA. This week, BTC needs to remain trading above $23,000 to keep this crucial level as support. Notice that all previous BTC bear markets since 2014 ended around the 200-week MA,” Martinez tweeted.
It is worth noting that the question of when the bear market would end has continued to persist as crypto enthusiasts long for the days of mouth-watering returns and fanfare in the crypto market. However, while several analysts are unsure about the beginning of the next bull run, many are beginning to converge on their thoughts on when we are likely to reach the price bottom.
As previously reported by The Crypto Basic, Rekt Capital predicts that the current bear market will end in Q4 2022. Notably, his analysis aligns with those from Glassnode Insights, which estimates that the current bear market has just a couple of months left.
4. Reserve Bank of Australia Starts New Pilot to Explore CBDC Use Cases
Australia's central bank plans to create a CBDC that will operate in a ring-fenced environment.
The Reserve Bank of Australia (RBA) will develop a "limited-scale" pilot to explore use cases and potential economic benefits of a central bank digital currency (CBDC).
* Australia's central bank plans to create a CBDC, which will operate in a ring-fenced environment. A ring-fence environment separates a portion of the user's financial assets from the rest, potentially securing one from the other in case of a breach.
* The project will take about a year to complete, according to an announcement on Tuesday.
* In 2020, the RBA announced its intention to explore a potential CBDC with the development of a proof-of-concept (POC) for the issuance of a tokenized digital dollar for use by the wholesale market. Attention is now being turned to a potential CBDC for use by households and businesses.
* While the central banks of almost every developed economy are at least exploring rolling out a CBDC, the jury is somewhat out on the necessity or desire for one in places like Australia, which the RBA acknowledges.
* "A question that has received less attention to date, especially in countries like Australia that already have relatively modern and well-functioning payment and settlement systems, is the use cases for a CBDC and the potential economic benefits of introducing one," the central bank said.
* With China's "eCNY/" being fairly well established and having received mainstream extended trials at the Winter Olympic Games in February, central banks elsewhere want to make sure they are not being left behind in the digital currency race
- The RBA will publish a paper in the next few months detailing its objectives for the projects and interested industry bodies will be able to participate.
5. BitMEX Executive Pleads Guilty to Violating Anti-Money Laundering Act
A New York federal court previously sentenced the firm’s co-founders to probation time and fines for federal compliance failures.
A high-ranking employee at off-shore, crypto derivatives exchange BitMEX has pleaded guilty for violating a U.S. federal anti-money laundering law, the United States Attorney for the Southern District of New York announced Monday.
Gregory Dwyer, who formerly served as BitMEX’s head of business development, pleaded guilty to violating the Bank Secrecy Act for "failing to establish, implement, and maintain an anti-money laundering program” at BitMEX.” .
The U.S. Attorney previously secured judgements against the firm's three co-founders, Arthur Hayes, Benjamin Delo and Samuel Reed. Prosecutors have said that the lack of know-your-customer (KYC) requirements at BitMEX allowed the company to thrive as a hotbed for criminal activity, including money laundering and sanctions evasion.
“Today’s plea reflects that employees with management authority at cryptocurrency exchanges, no less than the founders of such exchanges, cannot willfully disregard their obligations under the Bank Secrecy Act,” U.S. Attorney Damian Williams said in a press release.
Two years ago, the CFTC, DOJ and FinCEN slapped BitMex with civil and criminal charges after the firm allowed U.S. residents to trade crypto derivatives on its platform without being registered in the states or having substandard know-your-customer (KYC) practices. Although the agencies later settled with BitMEX for $100 million last summer, the charges resulted in a change of leadership at the exchange.
According to the plea agreement’s terms, Dwyer agreed to pay a $150,000 fine. The maximum penalty for his crime is five years in prison.
6. South African Web3 Firm Fractionalizes Rare ZAR Proof Coins Into NFTs
South African Web3 tech company Momint has fractionalized a set of rare gold, silver, and bronze coins from 130 years ago into non-fungible tokens (NFTs).
This complete denomination set of proof coins of Zuid-Afrikaansche Republiek (ZAR), an independent state in nineteenth century South Africa, was minted in 1892 and is currently valued at $1.2 million.
The coins are part of the first-ever South African rands and served as the inspiration behind the popular Krugerrand gold coins, the country’s first currency, that began minting in 1967, CEO Ahren Posthumus said.
Fractionalization involves cutting an asset into smaller units. In the case of the ZAR set of coins, each non-fungible token turns a single coin into lots of fungible crypto tokens, allowing people to own equity in a single NFT.
7. Iran makes the first-ever import of goods using cryptocurrency worth millions
This week, Iran registered its first official order for the importation of goods worth a total of $10 million paid for in cryptocurrency.
Indeed, an official from Iran’s Ministry of Industry, Mine, and Trade, disclosed the information according to a report that was published on Tuesday, August 9 by the Iranian news outlet Tasnim agency.
Head of Iran’s Trade Promotion Organization (TPO) Alireza Peyman-Pak stated on Twitter:
*Iranian government softens its stance on crypto*
It’s worth mentioning last year Finbold reported, the Iranian government issued permits to 30 crypto mining farms as the Iranian government appeared to soften its stance on cryptocurrency mining.
The approval at that came a little over a week after Iranian police confiscated over 7,000 computers used for mining cryptocurrencies from a facility in the capital city of Tehran. This came as a result of the country’s decision in May 2021 to prohibit the mining of Bitcoins due to concerns surrounding energy use.
Notably, Iran was experiencing difficulties with power outages, which the authorities blamed on miners, energy worries began to emerge.
Interestingly, back in March 2021, the Iranian Presidential Center for Strategic Studies, in a detailed report (PDF), encouraged the country to adopt Bitcoin and other cryptocurrencies mining to bypass international sanctions.
8. Korean Blockchain Project Klaytn Commits $20M to Asian Universities for Blockchain Research
SEOUL, South Korea — Blockchain protocol Klaytn has committed $20 million over four years to support blockchain development and funding at the Korea Advanced Institute of Science and Technology (KAIST) in Seoul and the National University of Singapore (NUS).
NUS ranked top worldwide in Coindesk's 2021 University Rankings for Blockchain and KAIST placed 26th. Both are in the top 50 technology schools globally, according to QS World University Rankings, and are known in Asia for their strong science, technology, engineering and mathematics programs.
Klaytn, introduced by messaging app Kakao's blockchain arm Ground X, went live in 2019 and now has "millions of users in Korea," it said. Its KLAY token has over $880 million market cap, CoinGecko data show, making it the 66th largest cryptocurrency. Its governing body at launch included electronics giant LG, with crypto exchange Binance and South Korea's Shinhan Bank joining later.
The blockchain is the second to announce an academic funding program this month. Earlier in August, the Algorand Foundation named the winners of its $50M blockchain research and education program, including Yale, University of Cape Town and Monash University in Australia.
Klaytn Foundation director Sangmin Seo announced the funding, called the Blockchain Research Center (BRC) Program, at Korea Blockchain Week in Seoul on Monday. Seo said the commitment is one of the largest blockchain research programs in terms of funding grants.
Day-to-day operations will be run by a global team headed by KAIST and NUS researchers. BRC will operate in an open-source manner, where research conducted will be publicly disclosed as research papers or open-source software.
External researchers will also be able to participate in existing research projects or submit their own proposals.
Seo said KAIST and NUS were selected from a pool of participating research institutes who submitted a proposal. Seven proposals were received from 62 research institutes in 11 countries, Seo said. The KAIST and NUS research group was selected by the Klaytn Governance Council.
9. What Led To Large Companies Buying Bitcoin (BTC) In Recent Times?
With the Bitcoin adoption increasing in the corporate world in recent times, crypto’s future appears to be bright overall. The chances of prolonged institutional investing in Bitcoin depends on the returns they would achieve going forward. Hence it is highly important as to where the companies take position as Bitcoin (BTC) remains vulnerable. Whether the large companies buying Bitcoin turns out to be lucrative could have huge implications on the industry.
*Why Large Companies Buying Bitcoin*
In the space of last three months, Bitcoin (BTC) price dropped close to 50% in value while it was hardly steady. From over $32,000 in the end of May to a low of under $18,000, the asset price had quite a turnaround in short time. However, it was Bitcoin’s movement around $60,000 that attracted the attention of institutional investors. It made the big companies keep an eye out for the digital asset. But that was not enough to invest in Bitcoin and build a portfolio, according to Thomas Farley, CEO of a financial services company.
Speaking in an interview with CNBC on Tuesday, he said there were many companies that got interested when BTC was around $60,000. But as Bitcoin followed a downtrend to reach $17,000, many of the companies really stepped in at that time, he added. In fact, the CEO said the decisions were actually easy to take considering the price fall.
10. Canadian Regulators Probing Crypto Lender Celsius Network Alongside US: Report
Canadian regulators are working in tandem with their U.S. counterparts to investigate the impact of New Jersey-based crypto lender Celsius Network’s multibillion-dollar collapse, according to a Financial Post article.
Although Celsius never registered with Canada’s provincial securities regulators, authorities in the country are working with the U.S. Securities and Exchange Commission to investigate the trans-border issue, the Financial Post, a Toronto-based newspaper, reported Tuesday. Regulators have launched investigations across jurisdictions in the U.S. and Canada to look into the insolvent lender’s post-crash actions
The Ontario Securities Commission (OSC) is also investigating how Celsius' collapse and subsequent bankruptcy has affected the platform’s Canadian users. In Quebec, the Autorité des Marchés Financiers (AMF) is investigating the ramifications of Celsius’ mid-June effort to freeze withdrawals.
The SEC didn't immediately respond to a request for comment, and the OSC wasn't immediately available for comment.
Celsius Network, a crypto lending platform that once held $28 billion in assets under management, lost 88% of its assets in its mid-June crash, sending shock waves through the wider crypto world and prompting dozens of other crypto exchanges to freeze customer withdrawals.
The firm filed for bankruptcy protection in July. It has told the court it owes its users about $4.7 billion. Among the long list of investors who have lost their funds in the collapse is the Caisse de Dépôt et Placement du Québec, Quebec’s largest pension manager, which invested $150 million in Celsius last fall.
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