News Updates July 02, 2022
1. Bitcoin's Next Support Remains at $16,000, On-Chain Data Shows
According to IntoTheblock on-chain data provided by crypto analyst Ali Martinez, the key support for Bitcoin sits near $19,100, where 330,000 addresses had previously purchased over 277,000 BTC. After this, the next significant support remains near $16,000, where a cluster of addresses had earlier bought BTC.
At the time of publication, Bitcoin had fallen just shy of $19,000, hitting intraday lows of $18,910. The cryptocurrency has lost nearly 6% in a day and is on pace to see a monthly loss of 40.17%. Also, Ethereum experienced a 24-hour decline of 10% to trade near $1,025. Other cryptocurrencies also experienced weakness at the time of writing.
Investors worry that the latest demonstration of central bank determination to manage inflation would cause economies to slow down quickly, which is why stocks fell on Thursday, extending what has been the worst first half of the year for global share values on record.
*$28,000 still in sight*
According to Deutsche Bank research, Bitcoin might rise as high as $28,000 by the end of the year given how closely it has been trading with U.S. markets.
Cryptocurrencies under Bitcoin's lead have exhibited strong correlations with stocks, frequently moving in tandem during trading. The S&P could return to January levels by year's end, according to the bank's strategists, and Bitcoin might follow.
2. Japanese Trust Banks Likely to Gain Permission to Handle Crypto from Autumn
Japan is set to allow trust banks to manage cryptoassets – after a top financial regulator announced plans to roll out legislation that could become legally binding later this year.
The newspaper Nikkei reported that the Financial Services Agency (FSA), the body that polices both the banking sector and the domestic crypto industry wants to “deregulate” trust banks, a measure that will allow these financial institutions to handle coin deposits.
The FSA said that the move would let the institutions treat crypto as “trust assets.” The agency added that cryptoassets were “volatile” and that trading in them “involves high levels of risk.”
The agency said that it was aiming to strengthen investor protection and promote “appropriate” market development by “allowing trust banks” to carry out crypto-related “asset management operations.”
The FSA intends to amend financial sector-related legislation in order to carry out the change, and will hold a one-month consultation on its proposals before enshrining its decision into law
Nikkei reported that the measure could become effective “as early as autumn” this year.
The news will come as a welcome boon to the domestic banking sector. Last month, key revisions to the Funds Settlement Law were made, allowing conventional banks, asset transfer providers, and trust banks to issue stablecoins that are pegged to the Japanese yen.
The FSA is widely expected to issue further guidance pertaining to both security tokens linked to bonds and tokenized real estate. A number of Japanese firms have expressed their desire to launch security token-related offerings, as well as crypto-powered property projects.
The FSA has been allowed to police the sector with a carte blanche ever since it was given powers over exchanges and wallet providers in September 2017. However, in recent months, the Tokyo-based government and its pro-IT business Prime Minister Fumio Kishida have indicated that they may be prepared to reform laws to ease the tax burden on crypto firms and user in a new phase of Web3-related growth.
[02/07, 16:45] Lina: 5- Experts weigh in on European Union’s MiCa crypto regulation
Modulus CEO Richard Gardner believes that the new regulation may signal the end of the current digital asset downturn.
European Union officials recently agreed on a landmark law called the Markets in Crypto-Assets (MiCa) framework that provides guidance for crypto asset service providers (CASPs) to operate within the Europe region. Following this, experts reacted with varying opinions, from supporting the decision to explaining how it would have adverse effects.
According to Richard Gardner, CEO of trading technology firm Modulus, the new development provides a clearer picture for CASPs as to what is expected by the authorities. Gardner explained that:
Gardner also added that this may end the digital asset downturn and bring a way for the industry to expand and innovate. The executive believes that the laws were “built to guard against abuse and manipulation.”
Commenting on the topic, Petr Kozyakov, the CEO of payment infrastructure firm Mercuryo also praised the move and believes that it's a “welcome step in the right direction.” Kozyakov noted that this may weed out bad actors. He said:
*Coinbase seeking aggressive European expansion amid crypto winter*
Meanwhile, not everyone believes that the new development in EU regulation will bring positive effects within the region. Seth Hertlein, the global head of policy at wallet firm Ledger, noted that the European Union missed an opportunity to regain the market share that it lost in Web2 through developments in Web3. Hertlein also highlighted that the rules would be in violation of the fundamental rights of Europeans.
3. Supreme Court’s Restrictions on EPA Oversight Could Impact Bitcoin Mining
The Court’s ruling will have ramifications on the EPA’s ability to regulate energy plants as an industry and could prompt states to do more.
The Supreme Court issued a ruling on Thursday that limits the Environmental Protection Agency’s (EPA) ability to regulate carbon emissions from power plants, which could have an impact on Bitcoin and other cryptocurrency mining operations that source their power from fossil fuels.
“It greatly complicates the ability of the EPA to use the Clean Air Act as a regulatory tool on climate,” U.S. Congressman Jared Huffman, lead author of a letter from House Democrats calling for more EPA oversight on crypto mining, told Decrypt.
While not specifically aimed at cryptocurrency mining operations, the Supreme Court’s decision could also limit the EPA’s ability to regulate the facilities at the behest of President Joe Biden’s executive order issued in March on ensuring the responsible development of digital assets.
One of the executive order’s principal policy objectives is implementing the use of cryptocurrencies in a way that “reduces negative climate impacts and environmental pollution, as may result from some cryptocurrency mining,” and the EPA was included as one of the agencies necessary in enacting actions required under the executive order.
The court’s opinion was written by Chief Justice John Roberts and said the Clean Air Act does not authorize the agency to regulate the carbon output of power plants as a whole industry, aside from ones that are specifically coal-fired.
The decision also emphasized that Congress must authorize rules considered transformational to “a fundamental sector of the economy” before they can be adopted by the EPA or any executive agency to address a certain issue, such as climate change.
The Court’s ruling will have ramifications on the EPA’s ability to regulate energy plants as an industry and could prompt states to do more.
The Supreme Court issued a ruling on Thursday that limits the Environmental Protection Agency’s (EPA) ability to regulate carbon emissions from power plants, which could have an impact on Bitcoin and other cryptocurrency mining operations that source their power from fossil fuels.
Citing the “major questions doctrine,” the court said they “declined to uphold [the] EPA’s claim of ‘unheralded’ regulatory power” over energy plants and that rules need to be specifically mandated by Congress, according to the Supreme Court ruling.
“It greatly complicates the ability of the EPA to use the Clean Air Act as a regulatory tool on climate,” U.S. Congressman Jared Huffman, lead author of a letter from House Democrats calling for more EPA oversight on crypto mining, told Decrypt.
While not specifically aimed at cryptocurrency mining operations, the Supreme Court’s decision could also limit the EPA’s ability to regulate the facilities at the behest of President Joe Biden’s executive order issued in March on ensuring the responsible development of digital assets.
President Biden Signs Long-Awaited Crypto Executive Order
President Biden has today signed the Executive Order on Ensuring Responsible Development of Digital Assets. This executive order is the first "whole-of-government" approach to regulating the c...
Huffman thinks if crypto mining operations are “celebrating, and thinking that crypto now has a green light to continue devouring huge amounts of energy contributing to air pollution and e-waste,” they’re wrong.
He stated that it’s likely the EPA will still be able to go after particular crypto mining operations, “especially if they're tied to a fossil fuel power plant,” whether that could be in relation to extending the life of a plant or bringing a coal plant back online to generate electricity for cryptocurrency mining.
One of the executive order’s principal policy objectives is implementing the use of cryptocurrencies in a way that “reduces negative climate impacts and environmental pollution, as may result from some cryptocurrency mining,” and the EPA was included as one of the agencies necessary in enacting actions required under the executive order.
The court’s opinion was written by Chief Justice John Roberts and said the Clean Air Act does not authorize the agency to regulate the carbon output of power plants as a whole industry, aside from ones that are specifically coal-fired.
The decision also emphasized that Congress must authorize rules considered transformational to “a fundamental sector of the economy” before they can be adopted by the EPA or any executive agency to address a certain issue, such as climate change.
The court’s decision follows a letter sent by House Democrats to the EPA last month calling for “increased oversight” into the environmental impact of cryptocurrencies, which Bitcoin advocates responded to in their own letter to the agency, saying the statement from House members was full of “misconceptions
Referencing the letter sent by Bitcoin enthusiasts that included signatures from Block CEO Jack Dorsey and MicroStrategy CEO Michael Saylor, Huffman said the argument that people’s “beef is with the grid, not with crypto” doesn’t hold up anymore.
4. UK, US eye central bank digital currencies and stablecoins in London meeting.
* US and UK officials discussed stablecoins and central bank digital currencies at a recent meeting of a financial partnership.
* The countries will hold another meeting this month when a financial regulatory working group huddles in July.
The United Kingdom and the United States huddled in London this week to discuss crypto and digital asset regulation, ahead of a financial working group meeting between the two nations later this month.
The US-UK Financial Innovation Partnership held its third meeting on Wednesday, where participants discussed “crypto-asset regulation and market developments," according to a release.
The partnership meeting also addressed stablecoins and central bank digital currencies. The group was created in 2019 to foster engagement between the U.S. and the U.K. on “financial innovation issues.”
The US-UK Financial Regulatory Working Group is set to meet later in July.
Participants in Wednesday’s meeting included staff from the Bank of England and the Financial Conduct Authority.
On the US side, participants included staff from major agencies like the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission and the Securities and Exchange Commission, among others.
5. U.S. governor signs crypto-friendly bill into law to ‘take advantage of booming tech’
As the cryptocurrency industry advances and expands, authorities in some jurisdictions are willing to give the new asset class a chance, including in the form of adopting crypto-friendly laws, such as in the U.S. state of New Hampshire.
Indeed, the Governor of New Hampshire Chris Sununu signed on June 24 the bill which “exempts the developer, seller, or facilitator of the exchange of an open blockchain token from certain securities laws,” as its final version states.
Authored by crypto enthusiast and State House Representative Keith Ammon and co-sponsored by Representative Joe Alexander, the bill HB1503 was first proposed on January 5, 2022. On March 15, the New Hampshire House of Representatives adopted it and passed it on to the state Senate, which approved the bill on April 28.
The signing of the bill by Governor Sununu has effectively turned the bill HB1503 into a full-fledged law in the state.
Authored by crypto enthusiast and State House Representative Keith Ammon and co-sponsored by Representative Joe Alexander, the bill HB1503 was first proposed on January 5, 2022. On March 15, the New Hampshire House of Representatives adopted it and passed it on to the state Senate, which approved the bill on April 28.
The signing of the bill by Governor Sununu has effectively turned the bill HB1503 into a full-fledged law in the state.
The signing of the bill by Governor Sununu has effectively turned the bill HB1503 into a full-fledged law in the state.
After the House adopted the bill in March, Ammon and Majority Leader Jason Osborne released a joint statement, in which they expressed their arguments in favor of crypto and its role in positioning the state “to take the lead on this revolutionary technology,” which Ammon reiterated following the signing.
Notably, politicians in the U.S. are increasingly showing interest in integrating cryptocurrencies into the country’s financial system, including the Bitcoin-friendly lawmaker U.S. Senator Cynthia Lummis of Wyoming, who officially presented her crypto regulatory bill before the U.S. Congress in early June, although admitting that it has a long path ahead before formally becoming law.
6. Bitcoin Miners Likely Behind Crash Below $19K, Here’s Why?
Bitcoin prices have registered a drop of over 10% in the past 7 days. The data suggest that high selling pressure from BTC miners has directed its price to crash below the crucial price level of $19K.
BTC miners’ sell-off surges
Julio Moreno, a senior analyst at Cryptoquant has suggested that the crypto market is trading in the Bitcoin miner capitulation period. He added that they have registered a surge in the cumulative miner to exchange flows. The spike has been recorded at the time of low prices.
Meanwhile, Ki Young Ju, CEO of CryptoQuant highlighted that there are two types of Bitcoin miner capitulation. First have been veteran miners selling at a profit. While second is new miners selling at a loss.
However, the recent jump in Bitcoin sell off has majorly affected the BTC’s price to trade at a stable level. In a report, Moreno mentioned that miners’ revenue has plunged over time. While the difficulty has recorded a growth which has pushed the miner’s cost. Mining difficulty was registered at 51% YoY when the BTC price dropped by 39% in the same period.
Bitfarms sells 3.53k Bitcoin.
Moreno added as the revenue is dropping, miners have turned into sellers. The month of June saw the flow of miners’ BTC to exchanges amount to around 23K Bitcoins. This has been the monthly highest level since May 2021. This has led miners to the “extremely underpaid” territory.
7. Voyager Digital Temporarily Suspends All Trading, Withdrawals and Deposits
Shares of the troubled digital broker plunged more than 26% in U.S. trading on Friday.
Crypto broker Voyager Digital (VYGVF) is temporarily suspending all trading, deposits, withdrawals and loyalty rewards, the company announced Friday. Even the Voyager-issued debit card will stop working for owners. The changes were effective as of 2 p.m. ET.
"This was a tremendously difficult decision, but we believe it is the right one given current market conditions," said Stephen Ehrlich, CEO of Voyager, in a statement. "This decision gives us additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform we have built together. We will provide additional information at the appropriate time."
Voyager recently disclosed it had significant exposure to Three Arrows Capital (3AC) and had issued a notice of default to the beleaguered hedge fund. Voyager claims 3AC has failed to make require payments on its loan of 15,250 BTC ($294 million) and $350 million USDC. Voyager said it is actively pursuing all available remedies for recovery from 3AC, including through a court-ordered liquidation through a court-ordered liquidation process in the British Virgin Islands.
Shares of Voyager plunged more than 26% to $0.33 in Friday’s U.S. trading (shares of the firm’s main listing in Canada were not trading on Friday because of the country's Canada Day holiday). Shares are down more than 97% year to date.
Voyager had earlier received a cash/USDC loan of $200 million and a revolving credit facility for 15,000 bitcoin ($294 million) from quantitative trading firm Alameda Research, which is owned by FTX CEO Sam Bankman-Fried, to safeguard Voyager's customer assets.
