News Updates July 01 2022
1. BTC Closes off June Below the 200 Weekly Moving Average
* Bitcoin (BTC) has closed below the 200 Weekly Moving Average (WMA).
* The price of BTC closed the month of June at $19,925.
* The RSI on the daily BTC chart signals oversold territory.
Bitcoin (BTC) has closed below the 200 Weekly Moving Average (WMA) as its price continued to fall over the last 24 hours.
The largest crypto by market cap, BTC, breached a critical area of support over the last 24 hours as it dipped below the $19,000 level. Since then, BTC’s price has recovered to close June off at $19,925. This positions BTC’s price below the 200 WMA, which is the first time in the token’s history. Furthermore, BTC posted the lowest Relative Strength Index (RSI) ever.
At the time of writing, BTC’s price now stands at $19,392.22, according to crypto market tracker CoinMarketCap. This comes after a 3.02% drop in price over the last 24 hours and a 7.91% drop in price over the last seven days. Due to the drop in BTC’s price, its total market cap is now $370,041,403,137.
Looking at the daily chart for BTC/USDT, the RSI line has crossed below the RSI SMA line to signal a bearish flag. In addition to the two lines crossing over the last day, the RSI on the daily chart is now at 29.34, taking BTC into oversold territory.
BTC is currently at a price channel with the upper bound at $21,876 and the lower bound of the channel at $18,605. A descending triangle chart pattern has also formed on the daily chart for BTC as its price continued its downwards move to post another red daily candle.
BTC may drop as low as the lower bound of the price channel as it approaches the apex of the chart pattern.
2. Worst quarter in 11 years as Bitcoin price and activity plunge
Quarterly returns on Bitcoin haven’t been this bad since it was trading under $20 in the early days of Mt. Gox, but the stock market isn’t faring so hot either.
Bitcoin (BTC) has seen its worst quarterly loss in 11 years with price and activity on the blockchain both plunging over the last three months.
The second quarter ending Thursday saw Bitcoin’s price fall from around $45,000 at the start of the quarter to trade at $19,884 before midnight EST on Thursday, according to CoinGecko. This represents a 56.2% loss, according to crypto analytics platform Coinglass.
It’s the steepest price fall since the third quarter of 2011 when BTC fell from $15.40 to $5.03, a loss of over 67% and worse than the bear markets of 2014 and 2018 when Bitcoin’s price slumped 39.7% and 49.7% in their worst quarters respectively.
The past quarter saw eight weekly red candles in a row for Bitcoin and the month of June saw a drawdown of over 37%. This was the heaviest monthly losses since September 2011, which saw the price fall more than 38.5% in the month.
There are also signs that investors are keeping their powder dry — or they’ve run out of funds — during the bear market. Activity on the blockchain is taking a dive with Bitcoin’s spot volume — the total amount of coins transacting on the blockchain — dropped over 58.5% in just nine days, according to a Wednesda analysis from Arcane Research.
But, it’s not just crypto markets in turmoil. Thanks to sky-high inflation and rising interest rates, the traditional stock market has also taken a pounding, with some calling it the “worst quarter ever” for stocks.
Charlie Bilello, CEO of financial advisory firm Compound Capital Advisors, shared a chart on Twitter showing the S&P 500 index was down 20.6% in the first half of 2022, the worst start to the year for the index since 1962 when price return was -26.5%.
The difficult economic conditions have seen a swath of staff layoffs from crypto companies including Gemini, Crypto.com and BlockFi. Most recently, the crypto and stock trading platform Bitpanda cut its employee count by approximately 277 full-time and part-time employees.
*80,000 Bitcoin millionaires wiped out in the great crypto crash of 2022*
Crypto is closely tied to the wider tech sector, and the tech-heavy Nasdaq composite index has fallen by almost 22.5% over the second quarter.
A “Tech Layoff Tracker” from technology jobs board TrueUp reveals that over 26,000 tech employees across 200 company-wide cutbacks just in June alone.
Over the quarter, 307 layoffs impacted over 52,000 staff, with one of the largest coming from Elon Musk’s Tesla, with 3,500 impacted. Crypto exchange Coinbase is featured twice, first for its June 2 hiring freeze and job offer rescission of nearly 350 people and second for its June 14 staff layoff, affecting 1,100 individuals.
3. India: 1% TDS To Be Charged on Crypto Transactions from Today.
To add to the hefty crypto tax of 30%, the government will begin taxing crypto with an additional 1% TDS starting from today. The already implemented 30% was considered a demotivating factor for the crypto industry in India. To add to that, a 1% TDS will be imposed on every transaction.
In India, even though the country levies a hefty tax on crypto, it is still unregulated. In spite of the fact that the RBI made its move to ban crypto in 2018, the Supreme Court ruled out the decision, leaving crypto on the edge of the cliff.
The government appears to be in an endless discussion about developing a cryptocurrency bill but a comprehensive bill has never been released to the public. As a result of these discussions, the government implemented a hefty 30% tax on cryptocurrencies. The tax that came into effect on April 1, 2022, includes all cryptocurrencies, NFT or similar tokens, and other digital assets as notified by the central government.
4. EU reaches agreement on final landmark crypto regulation
The European Union has finalized its massive Markets in Crypto Assets regulation.
Stefan Berger, MiCA's rapporteur in European Parliament, tweeted the news on June 30. The bill had been in trilogue debates, bringing the European Parliament, Council and Commission together to hash out a final compromise.
As The Block reported yesterday, France had been keen to complete trilogues on MiCA, as the French presidency in the European Council ends at midnight tonight.
The finalized version is not yet public and Berger's staff had not responded to a request for the bill as of publication time.
Berger noted in his tweet that the final version did not ban Proof-of-Work mining, which members of the Green and Socialist parties had been trying to push earlier in Spring.
MiCA is the first regulation of its scale in the EU. Its rollout across regulatory agencies will take years.
Kollen Post is a senior reporter at The Block, covering all things policy and geopolitics from Washington, DC. That includes legislation and regulation, securities law and money laundering, cyber warfare, corruption, CBDCs, and blockchain’s role in the developing world. He speaks Russian and Arabic.
5. South Korean Bankruptcy Court Warns of Coming Surge in Crypto-related Cases
South Korean courts are bracing for a wave of crypto-related bankruptcies – and have created a “working rule” that will help them deal with cases involving individuals who have fallen foul of crypto investments gone wrong.
Per Newsis, the Seoul Bankruptcy Court warned of a “domino effect” comprising of ailing crypto investors and struggling creditors. And these dominoes are starting to fall, the court added, with more cases expected to hit the courts in the second half of this year.
The court said that it had already laid the ground for this coming wave of bankruptcies by launching a new task force to deal with individuals in investment-related cases. It added that there had also been a rise in stock market investment-related bankruptcies.
The task force stated that it had introduced a temporary “working rule” for crypto and stock market investment-related cases. In conventional South Korean bankruptcy cases, the value of an investment is often calculated using projections of an asset’s expected future worth at the time of purchase.
This can lead to cases whereby, the task force explained, individuals “are constrained by the logic that the total amount that debtors have to repay is higher than the losses” that they incur on investments.
The “main goal” of the new rule is not to include losses in stock or crypto investments in bankruptcy-related calculations made by the courts, the media outlet explained.
However, the court added that this “working rule” would not apply in cases where individuals had attempted to conceal the details of their crypto investments.
6. Argentinian Tax Agency Ramps Up Digital Wallet Seizures
The Argentinian Tax Agency, the AFIP, has ramped up the seizures of digital wallets of taxpayers in the country. The institution managed to seize more than 1,200 digital wallets of taxpayers that had debts and didn’t have a bank account, or other properties available to be collected by the courts. While the organization has yet to order crypto-related seizures, this could be possible in the future.
*Argentinian Tax Agency Seizes More Than 1,200 Digital Wallets*
Tax regulators around the world are becoming more and more aware of the different ways in which taxpayers can hide their funds to avoid paying taxes. The Argentinian tax agency, the AFIP, has been busy taking control of the digital wallets of debtors to the institution. These digital wallets are custodial services provided by fintech companies to third parties, that in some ways are not directly related to banks. The basis for the seizures was established in February when the AFIP included these in the list of seizable assets.
According to local media, since last February, the institution managed to execute 1,269 seizures against customers that had accounts on such platforms. Before this, the organization had 19 months without executing any debt collections due to the measures the Argentinian government took to safeguard the properties of its citizens during the Covid-19 pandemic cycle.
While there are no concrete procedures that describe when the tax authorities can seize these kinds of assets from debtors, the seizures usually proceed when there are no more liquid assets that can be seized, like funds in a bank account or other properties. The Argentinian tax agency already has the data of every single account on these platforms due to legal requirements. This makes it easy for the organization to access these funds.
However, the procedures can be executed only if the digital wallets are provided by national companies, a reason why so much money is held outside Argentinian borders by citizens of the nation. According to official estimations, more than $360 billion lies undeclared, with a significant part of these funds being outside of the reach of the AFIP.
There are no limits on which assets can be seized by the AFIP, and this includes the possibility of seeing cryptocurrency held on Argentinian exchanges or national custody services also being seized, given the popularity that crypto is currently enjoying in the country. However, there have not been reports of this happening yet.
7.Bank of America Customers’ Crypto Activity Slowed as Market Slid
Almost 70% of the U.S. population has not invested in or is not interested in investing in cryptocurrencies, the bank said.
The number of active crypto users among Bank of America (BAC) customers slumped more than 50% to fewer than 500,000 between November and May as the market crumbled from its highs, the second-largest U.S. bank said in a report Wednesday, citing internal data.
Among the broader population, the bank also found that sentiment toward cryptocurrencies soured between April and June this year as the market headed toward a record half-year loss. Surveys of 1,000 people showed 30% of those questioned in June hadn’t invested in crypto and had no plans to do so, up from 21% in April.
‘First time’ users of crypto fell sharply. Only about 33,000 clients transacted in cryptocurrencies for the first time in May, 87% down from almost 267,000 in October 2021.
BofA’s data show that flows into crypto platforms have tumbled as well, and are now broadly equal to flows out, indicating that consumers are pulling back their “net investment in crypto platforms,” it said.
For one-third of clients that were conducting crypto transactions, the data show only a single transaction, generally for smaller amounts. They account for only 5% of the dollar value of crypto transactions. A considerable 69% of clients who transacted in cryptocurrencies during the Covid-19 pandemic are no longer active, the report added.
Almost 70% of the U.S. population has not invested in crypto or is not interested in investing in cryptocurrencies, the note said, adding that it appears that many consumers have not participated in crypto markets and if anything their “inclination towards doing so has waned” in recent months.
The bank’s survey suggested that relatively few people view crypto assets as a “reliable long-term investment.”
8. Biden Official Says US Government Could Pass Stablecoin Rules by End of Year
The President’s Working Group on Financial Markets discussed issues that should be addressed by stablecoin legislation in a meeting Thursday.
The U.S. federal government is working on stablecoin legislation with Congress that could become law by the end of the year, an administration official told CoinDesk.
The President’s Working Group on Financial Markets, an intergovernmental group composed of the heads of several financial regulators, met Thursday to discuss recent stablecoin activities and future legislation. This legislation would be introduced by the House Financial Services Committee, the official said
Thursday’s meeting was planned to let regulators and other participants review recent events in the stablecoin sector, including algorithmic stablecoins, the official said. It was also meant to involve the participants in the efforts to move legislation this year.
This legislative package, which has yet to be finalized or introduced, would define stablecoins for the purposes of U.S. regulation and address how they’re used. It would also preserve existing regulatory authority over the sector, the official said.
How stablecoins are issued is another detail the participants in the meeting discussed.
Thursday’s meeting was constructive, the official told CoinDesk.
The working group has looked at stablecoins for two years now and published a sweeping report in November 2021 proposing a possible regulatory framework for this aspect of the broader cryptocurrency industry.
*Bipartisan bill*
The official also said the regulators saw the need for bipartisan support. While they did not address legislation in the Senate, Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) has already suggested that there may be a stablecoin law by the end of 2022.
Speaking at CoinDesk’s Consensus 2022 conference earlier this month, Toomey – who has also introduced his own landmark stablecoin bill – said he knew the administration of U.S. President Joe Biden was interested in passing stablecoin rules.
“I'm going to go out on a limb and say we get stablecoins done this year,” Toomey said at the time.
Any bill that is introduced would need to be passed by both the House and the Senate.
9. HOW BITCOINERS SHOULD USE THEIR HARDWARE WALLETS FOR ADVANCED SECURITY.
Whether you’re just contemplating buying your first hardware Bitcoin wallet or have already had one for years, it’s always a good idea to refresh on the basics of these marvelous devices. Contrary to popular belief, a hardware wallet isn’t a “set it and forget it” tool that will take care of your bitcoin for you. Instead, a hardware wallet can help you with your ongoing bitcoin security.
WHEN AND WHY SHOULD I BUY A HARDWARE WALLET?
Since hardware wallets start around $70, it’s obviously not an attractive idea to buy one if you’re just dipping your toes into Bitcoin. There is no clear cutting-off point after which it is imperative that you buy yourself a hardware wallet, but a good rule of thumb is to get one once you have around $1,000 worth of bitcoin to protect. When you stack regularly and bitcoin appreciates in the meantime, chances are you’ll cross the $1,000 threshold quickly, so don’t put it off for too long.