News Updates August 27, 28, 2022
1. 3 Reasons Why Bitcoin Is at $20,000 and What Happens Next
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Bitcoin's drop to $20,000 was an unpleasant but somewhat expected event, as we have mentioned in our market reports, the lack of growth factors in the industry and hawkishness of financial regulators in the U.S.
The catalyst for the current price dive was the speech of the Fed Reserve chairman who stated that the U.S. central bank will remain hawkish for a while, which goes against previous expectations of financial markets that expected a soft landing only a few weeks ago.
2. $1.25T Wiped off U.S. Equities Markets After Fed Speech, Losses Surpass Crypto Market Cap
*As Chairman of the Federal Reserve*
Jerome Powell announced tighter measures to bring down inflation, U.S. stocks tanked, with bitcoin briefly hitting a one-month low.
The Dow Jones Industrial Average lost 3% after the speech, dropping further as markets closed on Friday, Aug. 27, 2022.
Powell’s announcements come when inflation in the U.S. is over 2%, despite a temporary but insufficient respite in July 2022.
Following the July 2022 Consumer Price Index report on Aug. 10, 2022, showing lower than expected inflation figures for July, bitcoin rallied from $22,826 on Aug. 10 to $24,750 on Aug. 11. Ether also rallied, touching $2,000 on Aug. 15.
The plunge in the Dow Jones Industrial Average was accompanied by the S&P500 losing 3.3% and the Nasdaq Composite dropping 4%, as investors weighed the effects of high-interest rates kept over a more extended period. Bond prices also crept lower. The total losses in the U.S. equities markets topped $1.25 trillion, more than the market cap of bitcoin and all other altcoins.
The crypto market cap briefly dipped to $936.87 million following the chairman’s speech, with bitcoin temporarily dropping to under $20,000. Ether fell 14% in intraday trading, which cost about $1500, wiping most of the gains accrued in Aug. 2022.
3. Crypto Market Cap Below $1T, Bitcoin Fights for $20K (Weekend Watch)
The crypto market cap struggles below $1T as bitcoin, and most altcoins have failed to produce any significant gains.
After yesterday’s price plunge towards and beneath $20,000, bitcoin has stalled and struggles to remain above that coveted line.
The altcoins also suffered quite a bit at the start of the weekend, and most sit calmly now
*Bitcoin Fights for $20K*
The previous week was particularly harmful to the primary cryptocurrency, which dumped by more than $4,000 in less than seven days to a monthly low of around $21,000.
It spent most of this past week around that level, trading sideways. The largest price fluctuation came on Thursday when the asset tried to reclaim $22,000 but was stopped in its tracks.
This led to more violent consequences, especially after Fed Chair Jerome Powell reiterated the central bank’s stance on fighting inflation. In a matter of hours, BTC slumped by more than a grand.
4. Ethiopia-Based Crypto Service Providers Told to Register With the Country's Cybersecurity Agency
Cryptocurrency service providers operating in Ethiopia are now required to register with the country’s cybersecurity agency known as the Information Network Security Administration (INSA), a report has said. According to the agency, legal measures will be applied to crypto entities that fail to comply with its registration call.
*INSA Tasked With Developing Operating Procedures*
The Ethiopian cybersecurity agency, the Information Network Security Administration (INSA), has reportedly started registering crypto service providers operating in the country. The agency’s registration of crypto entities was made possible by the amendment of a law that paved the way for the re-establishment of the INSA.
According to a report published by the Ethiopian Monitor, the amended law gives the cybersecurity agency the power to oversee cryptographic products and related transactions. In addition, as the designated “Root Certificate Authority,” the INSA is tasked with developing operating procedures as well as the cryptographic infrastructure.
Meanwhile, reports of the cybersecurity agency’s decision to register crypto entities are coming a few months after the country’s central bank, the National Bank of Ethiopia (NBE) warned residents against using cryptocurrencies. As reported by Bitcoin.com News in June, the NBE did not only warn against using cryptocurrencies to make payments but it is also encouraged to report such transactions.
5. Latvian Extradited to US for Wire Fraud Involving Crypto Investments.
A Latvian national has been handed over to the United States where he is accused of fraud through several companies offering false crypto investment opportunities. Ivars Auzins will appear in a federal court in Brooklyn to face multiple charges of wire and securities fraud.
Latvian Authorities Transfer Alleged Crypto Fraudster to US Custody
Ivars Auzins, a citizen of the small Baltic nation of Latvia, was extradited to the United States on Friday. The Latvian has been handed over to the American judiciary on a six-count indictment charging him with wire fraud, securities fraud, and conspiracies to commit wire and securities fraud in connection with the operation of eight businesses that purported to offer, invest in, or mine digital assets.
Auzins will be arraigned on the indictment on Saturday in a federal court in Brooklyn before the Honorable Roanne L. Mann., the U.S. Department of Justice said in a press release. The charges were announced by United States Attorney for the Eastern District of New York Breon Peace and Michael J. Driscoll, assistant director-in-charge of the New York Field Office of the FBI:
Auzins perpetrated a brazen scheme in which he fleeced investors who funneled millions of dollars into fraudulent cryptocurrency. This Office will continue to vigorously investigate and prosecute those who lie and steal from investors, including those like the defendant who operate from abroad.
A Latvian national has been handed over to the United States where he is accused of fraud through several companies offering false crypto investment opportunities. Ivars Auzins will appear in a federal court in Brooklyn to face multiple charges of wire and securities fraud.
Latvian Authorities Transfer Alleged Crypto Fraudster to US Custody
Ivars Auzins, a citizen of the small Baltic nation of Latvia, was extradited to the United States on Friday. The Latvian has been handed over to the American judiciary on a six-count indictment charging him with wire fraud, securities fraud, and conspiracies to commit wire and securities fraud in connection with the operation of eight businesses that purported to offer, invest in, or mine digital assets.
Auzins will be arraigned on the indictment on Saturday in a federal court in Brooklyn before the Honorable Roanne L. Mann., the U.S. Department of Justice said in a press release. The charges were announced by United States Attorney for the Eastern District of New York Breon Peace and Michael J. Driscoll, assistant director-in-charge of the New York Field Office of the FBI:
Auzins perpetrated a brazen scheme in which he fleeced investors who funneled millions of dollars into fraudulent cryptocurrency. This Office will continue to vigorously investigate and prosecute those who lie and steal from investors, including those like the defendant who operate from abroad.
According to the indictment, the Latvian allegedly ran several companies, the “Auzins Entities,” which advertised through email campaigns, social media, and websites dedicated to cryptocurrencies. They suggested valuable investment opportunities and solicited investments before suddenly disappearing.
Two of these, Denaro and Bitroad, raised funds through initial coin offerings (ICOs). Impressio Estate, Broi Investments (Bankroi), Changepro, Gemneon Investments, and Lycovest presented themselves as crypto investment platforms providing different investment plans and profit rates. Innovamine offered investments in mining a number of coins, including bitcoin (BTC) and ether (ETH).
Auzins and his co-conspirators allegedly enticed investors to put money into their projects through a series of material misrepresentations and omissions about the offered products and services, the profits that investors would earn by investing in the Auzins Entities, and the individuals who operated them.
6. Scammers Now Prefer Crypto Over Credit Cards.
According to a recent report by the Sydney Morning Herald, criminals have shifted their attention from card fraud to cryptocurrencies in Australia. The fraud rate on car payments has declined significantly in recent years following the introduction of additional safety measures. AusPayNet’s Andy White has attributed the decline to robust customer identification. Due to rapidly surging prices, cryptocurrencies became an even more lucrative target for fraudsters in 2021, according to ACCC deputy chair Delia Rickard. Rickard has noted that cryptocurrencies have become a preferred payment method for all sorts of scams. In June, the Australian Competition and Consumer Commission (ACCC) reported that Australians had lost more than $205 million to scams. Notably, cryptocurrency investments accounted for the majority of lost funds ($113 million). The ACCC warned that consumers are vulnerable to cryptocurrency scams, which is why they should be very cautious when it comes to dubious investment offers.
7. Inflation Hedge or Not, Bitcoin's True Value Is Separation of Money and State
Inflationary forces are still out there and investors are thinking about how best to protect themselves. Is bitcoin a way to do that?
For the first week in a while, the non-crypto world was louder than the crypto world.
Everyone is talking about:
How U.S. President Biden is paying off everyone’s student loans (through the Public Service Loan Forgiveness program)
How Fed Chair Jerome Powell was skiing with all his friends in the Tetons (at the Jackson Hole Economic Policy Symposium)
How Professional Smart Guy Zoltan Pozsar is scaring the living daylights out of us again by writing: “The unfolding economic war between great powers is stochastic and not linear” (in a research note titled “War and Interest Rates”)
Meanwhile, no one is talking about if bitcoin (BTC) is or isn’t an inflation hedge. Thankfully (unthankfully?) each of the things everyone is talking about is (at least loosely) tied to inflation in some way. So I’ll do it. I’ll write about if bitcoin is or isn’t an inflation hedge.
Because everything is about inflation and everything is about bitcoin (even things that aren’t about bitcoin). Stochastic means “random,” by the way.
8. Mt. Gox Creditor Denies Fake Report About Imminent Release of 140,000 BTC.
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Mt. Gox Creditor Denies Fake Report About Imminent Release of 140,000 BTC
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Sun, 08/28/2022 - 14:51
Gamza KhanzadaevRecent news about Mt. Gox are fake, according to one of creditors
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Eric Wall, one of the creditors of the infamous crypto exchange Mt. Gox denied the report about an imminent distribution of 140,000 BTC. He said that the payout system has not been created yet, not even a choice of exchange on which affected investors will be able to receive their payouts is ready. As it stands, there are no final dates yet.
The creditor has given some additional clarifications. He said that BTC, BCH payments will be made in tranches, and some of the creditors have already sold their claims to Fortress. Dumping rumors According to rumors spread the day before, Mt. Gox was supposed to start Bitcoin compensations today, Aug. 28. Many were alarmed by the situation, viewing the rumor as a "black swan" for the cryptocurrency market. The panic created additional pressure on Bitcoin and the rest of the market, which already sagged significantly after the Fed's hawkish rhetoric at the Jackson Hole symposium. The price of BTC at the time fell below $20,000. Those responsible for the fake news about Mt. Gox probably decided to play ahead of the curve, based on the July news about the exchange's compensation payments.
