News Updates August 17, 2022
1. UK hits double-digit inflation for the first time in 40 years
At 10.1% inflation, the United Kingdom joins 2 billion people around the world suffering as price rises erode people's purchasing power
The inflation rate in the United Kingdom reached 10.1%, according to the Office for National Statistics (ONS). The Consumer Prices Index (CPI) rose by 10.1% in the 12 months to July 2022. It's a significant leap from 9.4% in June.
The ONS stated that housing and household services, including fuel and transport (fuel again), food and beverages are to blame for the surge in prices.
The price at the pump in the United Kingdom currently stands at roughly £1.72 ($2.08) per liter, having almost breached the £2 mark recently. For Diesel, the price sits at £1.84 ($2.23) per liter, having dropped under the £2 mark in June. The ONS reported that rising food prices were the largest contributor to the inflation rate.
For Alex Gladstein, the chief strategy officer at the Human Rights Foundation, the United Kingdom joins a host of countries suffering from double-digit price increases. More than 2 billion people worldwide suffer from the situation in which purchasing power quickly erodes.
2. Technical analysts who called $20,000 Bitcoin say BTC could fall to $10k
As a result of the fluctuating pricing of Bitcoin (BTC) in the market over the past few months, crypto traders and investors alike are keen to determine the direction in which the flagship digital asset will move.
Speaking with Kitco News on August 16, Kevin Wadsworth and Patrick Karim, technical analysts of Northstar & Badcharts, discussed their next price targets for Bitcoin.
Giving an outlook on Bitcoin after the cryptocurrency hit the target of the $20,000 mark he outlined, Wadsworth indicated with percentages that Bitcoin could fall as low as $10,000 based on technical analysis.
It is also important to note that Wadsworth states that “we can’t rule out that move to the upside,” but knowing where Bitcoin’s support and resistance levels are located, gives investors a heads up.
Elaborating more on the potential price target, the arc patterns indicate Wadsworth noted BitcoOn is heading in the direction of the 30-week or 200-day moving average, which are both very similar on this, he opined:
The market analyst seemingly noticed quite a few of the cryptocurrencies are already losing momentum and appear to put in their highs for what he calls “a bear market rally,” Wadsworth added, “we’re either at or very close to those um those peaks at the moment.”
*Bitcoin hopium headlines*
With the ‘hopium’ headlines in the market with the likes of Mike Novogratz saying Bitcoin will eventually one day reach $500,000 and Anthony Scaramucci saying that if it goes to $300,000 why does it matter if you buy a $20,000 or $60,000, it appears many large institutional investors are still bullish long term.
Discussing the charts and the long-term projections the investors mentioned above had made, the technical analysts are not looking past $30,000 as a medium-term price target.
Given that Bitcoin is correlating heavily with the Nasdaq chart, Karim indicated that “it’s very hard to see higher targets for Bitcoin.” The two analysts agree cryptocurrencies and Bitcoin are a play on tech stocks. This is owing, in part, to the fact that cryptocurrencies haven’t been around for a very long period.
As a result, it’s difficult to anticipate how they will react, if, and when the stock market will embark on a much longer and more significant downturn.
3. Bitcoin (BTC) Unable To Hold Above $24,000 Ahead Of Bearish Signs
The price of Bitcoin BTC has struggled to hold above $24,700 against Tether (USDT) after being rejected from that region.
Bitcoin in recent times has shown bullish signs after rallying to the $24,000 mark, with many investors speculating this could be the start of the bull run. The price of BTC was rejected from $25,200 and has struggled to reclaim that region
Bitcoin in recent times has shown bullish signs after rallying to the $24,000 mark, with many investors speculating this could be the start of the bull run. The price of BTC was rejected from $25,200 and has struggled to reclaim that region
*Bitcoin (BTC) Price Analysis On The Weekly Chart*
From the chart, the price of BTC saw a weekly low of $19,000, which bounced from that area and rallied to a price of $25,200, making six straight weeks of bullish sentiments.
BTC’s weekly candle closed with a bullish sentiment, but the new week’s candle tends to look bearish, indicating we could have a minor retracement to the next support area of $21,500.
The price has struggled to build more momentum as it faces resistance at $24,000.
If the price of BTC on the weekly chart continues with this structure, it could quickly revisit $21,500, acting as good support for the price of BTC.
Price Analysis Of Bitcoin On The Daily (1D) Chart
The price of BTC found strong support at $22,443, with what seems to be an area of interest on the daily chart.
BTC bounced from its support and rallied to $25,200, where it was faced with resistance and was rejected from that region.
The price of BTC has continued to range in a rising wedge after being rejected from the $25,200 mark. Breaking out of this rising wedge to the downside could mean a retest of the $21,500 support area.
At the point of writing, the price of BTC is at $23,800, narrowly above the 50 Exponential Moving Average (EMA), which corresponds to $23,400.
BTC needs to hold above this support area that corresponds with the 50 EMA, a break below this region could send the price of BTC to $21,500.
The Relative Strength Index (RSI) for the price of BTC on the daily chart is above 50, but there is a break to the downside on the uptrend line holding the RSI, indicating we could be due for a retracement.
Daily (1D) resistance for BTC price – $24,000.
Daily (1D) support for ETH price – $23,400, $21,500.
Price Analysis OF BTC On The Four-Hourly (4H) Chart
The price of Bitcoin BTC is having a hard time holding above the 50 and 200 EMA prices that correspond to $24,000 and $23,200.
On the 4H timeframe, the 50 EMA is acting as a resistance for the price of BTC after breaking out of the rising wedge in which prices have ranged.
The 200 EMA would act as support for BTC price in case of a sell-off. If BTC fails to hold this support region, we could retest the region of $21,500 as the next support area to hold BTC’s price.
Four-Hourly (4H) resistance for BTC price – $24,000.
Four-Hourly (4H) support for BTC price – $23,200, $21,500.
4. US Regulator 'Improperly' Pushing Banks to Avoid Serving Crypto Companies, Lawmaker Says
U.S. Sen. Pat Toomey said whistleblowers had informed him that the FDIC was pressuring banks to stop providing services to crypto companies.
The Federal Deposit Insurance Corporation (FDIC) may be leaning on banks to prevent them from providing services to cryptocurrency companies, U.S. Sen. Pat Toomey (R-Pa.) said Tuesday, citing communications he had received.
In a letter directed to Acting FDIC Director Martin Gruenberg, Toomey wrote that he had heard from "affected parties" and whistleblower communications which claimed that the federal bank regulator had tried to "deter banks from doing business with lawful cryptocurrency-related companies," even though providing services to these companies is not illegal. Toomey asked the regulator to confirm whether any FDIC official had indeed asked banks to not do business with crypto firms, and if so, to explain why.
American Banker first reported the letter on Tuesday.
Toomey referenced "Operation Choke Point," a former FDIC and Department of Justice initiative whose stated purpose was to pressure banks not to provide services to payday lenders and financial fraud charges, but which appeared to also pressure banks not to provide services to companies engaging in legal activities like gun sellers.
According to whistleblower communications that we have corroborated, personnel in the FDIC’s Washington, D.C. headquarters are urging FDIC regional offices to send letters to multiple banks requesting that they refrain from expanding relationships with crypto-related companies, without providing any legal basis for sending such letters," Toomey wrote. "... As I understand it, in one or more of these cases, a bank planned to give customers access to a crypto-related company’s trading platform via the bank’s mobile or internet banking app."
5. UK Crypto Industry Welcomes New Stablecoin Rules, Awaits Guidance
UK Crypto Industry Welcomes New Stablecoin Rules, Awaits Guidance
A proposed bill could give U.K. regulators new powers over payments-focused crypto assets like stablecoins, but details on how the rules might be interpreted by financial watchdogs are pending.
Crypto advocates in the U.K. have largely welcomed a new bill that could bring digital assets like stablecoins into the scope of local payments regulation. But there’s uncertainty about how the new rules will look like, should the bill pass.
The bill is scheduled to be debated in Parliament for the first time in September. It will move through a complex legislative process that could be slowed further by the recent cabinet shuffle, and crypto advocates are awaiting indications from regulators on how they plan to interpret and enforce the rules.
We will have to wait to see what new rules are introduced as a consequence of the bill to fully understand the new powers and approaches of the various regulators,” James Alleyne, legal counsel at the London-based law firm Kingsley Napley, who advises crypto firms on compliance, told CoinDesk in a statement.
The proposed stablecoin rules are part of a larger financial-services and markets bill that maps out the U.K.’s post-Brexit economic strategy. It looks to extend existing financial regulations to cover payments-focused cryptocurrencies such as stablecoins, which are cryptocurrencies intended to maintain a peg to a fiat currency, usually the U.S. dollar.
Those cryptocurrencies are defined broadly as “digital settlement assets,” or DSAs. The bill also puts the U.K. Treasury in charge of defining what DSAs are and assigning the Bank of England (BoE), Financial Conduct Authority (FCA) and Payments Systems Regulator (PSR) various powers to enforce the rules.
*Terra’s influence*
The U.K. is the latest major country to propose legislation targeting stablecoins. It was influenced in no small part by the downfall of terraUSD – a stablecoin that rapidly lost its peg to the U.S. dollar in May and led to the collapse of a $40 billion enterprise. The U.S. and Singapore are also stitching together regulatory frameworks to rein in stablecoin issuers.
Meanwhile, policymakers in the European Union recently agreed on the Markets in Crypto Assets (MiCA) bill that seeks to set up licensing rules for crypto firms and lay out stringent requirements for stablecoin issuers that wish to operate in the EU.
At least six industry experts told CoinDesk the U.K.’s proposed measures were a welcome step and align with the U.K.’s ambitions of becoming a global crypto hub.
“I see this as a key piece of legislation for financial services, which I hope can allow us to make the most of the opportunities of Brexit and to establish an approach to crypto regulation that is right for the U.K.,” said Lisa Cameron, a member of Parliament and chairwoman of the cross-party group for crypto.
“By bringing stablecoins within the scope of regulation, the bill paves the way for further adoption in the U.K., and this will be a key area of focus for parliamentarians as part of our inquiry into the wider sector,” she added.
Blair Halliday, managing director of the U.K. for Gemini, a crypto exchange and custodian, called the legislation a “positive move that recognizes the significant role that these assets will play in our economy and financial system in the future.”
6. Pay Your Traffic Fines or We’ll Confiscate Your Crypto – S Korean Police Pilot Grants Officers New Powers
South Korean police have been given experimental new powers that allow them to seize crypto from people who refuse to pay fines – and have already taken tokens from a citizen who failed to pay a traffic fine.
Per the Joongboo Ilbo, the National Police Agency is running a pilot “cryptoasset seizure” project at the police headquarters of the city of Gunpo, in Gyeonggi Province. As part of the project, police officers have been told to investigate whether individuals with outstanding fines worth over USD 763,000 have token holdings on domestic crypto exchanges.
If officers discover that this is the case, they have been granted the power to freeze wallets and gain warrants that allow them to seize coins.
Should the pilot prove successful, it could open the door for a potential nationwide rollout at police stations throughout the country.
And at least one individual has already seen their crypto wallets shrink as a result of the pilot. The media outlet reported that officers had discovered that one individual based in the city had over USD 38,000 worth of coins in exchange wallets – but had failed to pay traffic fines worth under USD 2,000.
Officers proceeded to “seize and collect” tokens from the wallets – although they did not reveal if they had liquidated them. They may alternatively choose to auction the seized coins – or perhaps HODL them!
7. Crypto needs ‘enabling environment,’ Philippines central bank says
The Philippine central bank sees the potential of crypto to improve domestic and cross-border payments, but the authority is still negative to crypto as a legal tender.
Amid the rising cryptocurrency adoption in the Philippines, the country’s central bank is seeking measures to better protect investors through elevating local crypto awareness.
The Philippine central bank, Bangko Sentral ng Pilipinas (BSP), wants to promote crypto education as the authority sees a lot of benefits associated with crypto and blockchain, a BSP representative said in an interview with Cointelegraph.
“The BSP’s focus is on virtual assets’ capacity to improve the delivery of financial services, particularly payments and remittances services, as it has potential to provide faster and economical transfer of funds, both for domestic and international setting,” the BSP stated.
According to the BSP, crypto adoption in the Philippines has increased over the past few years due to the COVID-19 pandemic. As such, Bitcoin (BTC) trading volumes in the Philippines were hitting new highs on some peer-to-peer crypto exchanges in July 2021.
“During the pandemic, we have seen the willingness of consumers to explore the virtual realm, particularly online platforms that promise to offer income-generating opportunities or play-to-earn applications,” the BSP spokesperson said.
In response to the growing adoption, the Philippine central bank does not plan to adopt any significant limits on crypto investments or trading at this point. Instead, the BSP is looking to implement a regulatory approach aimed at providing an “enabling environment” through “risk-based and proportionate regulations,” the central bank’s representative said, adding:
Despite targeting an “enabling environment” for crypto, the BSP holds a highly negative stance on using crypto as a payment method. “Virtual assets, particularly cryptocurrencies, whose values are derived based on the agreement of the community of users, are not intrinsically designed to serve as legal tender,” the bank noted.
According to the BSP, cryptocurrencies cannot serve as a means of payment due to risks like high volatility and a high potential for unlawful use or theft due to increased anonymity and “weak cyber and digital identity security protocols.” Among other risks, the bank mentioned crypto transaction irreversibility, which means that no central authority would ever be able to cancel a Bitcoin transaction or restore such funds.
The BSP also pointed out that the regulator considers cryptocurrencies virtual assets rather than a currency. “Since the price of most virtual assets is driven by speculation, virtual assets expose users to price volatility and risk of losses,” the BSP noted. To address this, the central bank issued guidelines for virtual asset service providers as part of Circular No. 1108 in January 2021.
*The Philippines halts virtual asset provider license applications*
The BSP still sees great opportunities in utilizing blockchain technology to enhance the security and efficiency of financial services in the Philippines. The central bank is currently exploring the issuance of a central bank digital currency (CBDC).
The BSP is planning to undertake Project CBDCPh, a pilot project that will enable inter-institutional fund transfers utilizing a wholesale CBDC platform. According to the bank, a retail CBDC is not highly relevant for the country in the near term.
8. UK Group to Test Stablecoin Payments, Provide Data to Bank of England
The Digital FMI Consortium, a group of private-sector companies, will start a pilot scheme in October and run it for a minimum of a year.
The Digital FMI Consortium, a group of private-sector companies, said it plans to test cross-border payments and provide recommendations to the Bank of England using its own sterling-backed stablecoin, dSterling.
The pilot, known as Project New Era, will start in October and run for 12-24 months, it said a press release. Digital FMI, which has 15-20 members, will provide white papers and recommendations to the Bank of England and other regulators. A stablecoin is a cryptocurrency designed to hold its value against another asset, often the U.S. dollar.
The U.K. is looking to become a "crypto hub," prospective prime minister Rishi Sunak said in April, when he was the chancellor of the exchequer, the government's chief finance minister. Last November the Bank of England said it was assessing a case for a central bank digital currency (CBDC).
Rather than the central bank coming to the private sector and incorporating private sector advice about CBDC development, this is entirely a private sector-led initiative that will provide data and policy recommendations to regulators and the Bank of England," Casey Larsen, a director at Farrant Group, which handles the consortium's communications, told CoinDesk.
Boston Consulting Group is one of Digital FMI's consulting partners. It is also supported by The Payments Association, an industry group whose members include some the U.K.'s biggest banks and accounting companies alongside processors such as Visa and Diners Club.
"With the advent of DLT [distributed ledger technology] and blockchain technology, digital assets are ushering in a new era for money, with potentially transformative benefits for consumers, businesses, financial institutions and states," said Kunal Jhanji, a managing director and partner at Boston Consulting Group.
