News updates July 11, 2022

11 Jul, 2022 01:39 pm

1. Bitcoin Declines above $20,000 as Bulls Fail to Sustain Recent Rally.

On July 8, the Bitcoin (BTC) price rose to a high of $22,425, but was pushed back. The price movement was represented by a long candle wick.

The candle wick indicates that there is strong selling pressure at higher levels. Bulls could not sustain the bullish momentum due to lack of buyers at higher price levels.

In the last three days, the BTC price has been trading between the moving average lines. The cryptocurrency will fall to the $20,000 psychological price level if Bitcoin declines and falls below the 21-day line SMA. If the 21-day line SMA holds as support, the cryptocurrency will continue a new uptrend and regain the previous highs of $21,675 and $23,010. A break above these price levels will catapult Bitcoin to the psychological barrier of $30,000.

Bitcoin indicator reading
Bitcoin is at level 40 of the Relative Strength Index for period 14. The cryptocurrency is in the downtrend zone and is capable of regaining the previous low above the $20,000 support. The BTC price is above the 21-day line SMA, but below the 50-day line SMA, indicating a possible fluctuating movement of the cryptocurrency. Selling pressure will resume if the price falls below the 21-day line SMA. Bitcoin is below the 80% area of the daily stochastic. The market is in a bearish momentum.

Technical indicators:

Major Resistance Levels - $30,000 and $35,000

Major Support Levels - $20,000 and $15,000

What is the next direction for BTC?
Bitcoin is in a downward movement after rejecting the high at $22,425. The cryptocurrency will continue to fall if the price drops below the 21-day line SMA. In the meantime, the BTC price is hovering above the price level of $20,400.

2. Crypto analyst identifies key Bitcoin price levels to watch ahead of June’s inflation report

As the June consumer price index (CPI) data report is approaching, set to be published on July 13, cryptocurrency market investors and traders are exploring what effect the report could have on the price of its flagship asset – Bitcoin (BTC).

One of them is crypto trading expert Michaël van de Poppe who had originally set $21,900 as the crucial resistance level to watch for Bitcoin after taking liquidity, now believes that if the asset was to crack $22,300, and then “there’s not much in between and the odds are that we‘re going to have a very swift move all the way towards $27,200 next,” as he said in his YouTube live stream on July 11.

Van de Poppe believes the upcoming CPI or inflation data report will significantly impact the future Bitcoin price movements that crypto traders and investors are going to look at. According to him, everyone is expecting a deep crisis or crash to happen because they think the CPI report will be pretty bad.

*Possible effects of the CPI report*

That said, he expects the inflation data to be “less severe than what we have been seeing or at least in the coming months [the numbers] will start to drop and be less than what we are expecting.”

However, if Bitcoin loses this level under the influence of a possibly poor CPI data report, “it is going to take out all the lows and most likely drop all the way towards $19,000, maybe $19,400, then we’ll have a bounce, and then we’ll start falling down even more.”

*Bearish Bitcoin sentiment on Wall Street*

At the same time, investors on Wall Street predict that Bitcoin will depreciate significantly in the near future, believing that the token is more likely to hit $10,000, which would reduce its worth by almost half, than that it will climb back to $30,000, as Finbold earlier reported.

As things stand, the maiden crypto asset is trading at $20,576, which is a 3.53% drop on the day, but an increase of 7.38% across the previous seven days, according to CoinMarketCap data.

3. International Organization of Securities Commissions publishes crypto roadmap for 2023

The International Organization of Securities Commissions (IOSCO) has published its framework to govern the sector in the next few years by addressing the lack of cryptocurrency regulations.

The framework by IOSCO’s Board-level Fintech Taskforce (FTF) will focus on two workstreams focusing on Crypto and Digital Assets (CDA) and decentralised finance (DeFi), the guidelines published on July 7 indicated.

Each workstream plans to publish a report with policy recommendations by the end of 2023.

*Protecting investors from losses*

According to the task force established early this year, the investor losses witnessed this year are due to a lack of regulations in the market. Therefore, the FTF indicated that there is a need to protect investors and respond to market integrity.

The group is also collaborating with the Financial Stability Board (FSB) on elements such as possible risks to financial stability considering the cross-border nature of cryptocurrencies. The collaboration will also entail exchanging information at both global and regional levels.

*Increased focus on crypto regulation*

Following the recent growth of cryptocurrencies, the IOSCO has been actively involved in pushing for crypto regulations globally. As reported by Finbold, Alder hinted that a global crypto regulation body might be unveiled by next year.

According to Alder, the regulatory body would likely focus on coordinating the development of uniform crypto sector regulations. Notably, the focus on cryptocurrencies is part of the organisation’s three key elements of Covid-19 and climate change.

4. What Are the Implications of the SEC Plans to Regulate DeFi?

*The SEC expects to pursue cases against the latest development in digital assets, NFTs.*

*Another area that the regulation will hit is stablecoins.*

The Securities and Exchange Commission (SEC) has decided to add at least 20 more enforcement positions dedicated to the crypto industry, making the total enforcement staff focused on virtual assets to 50. This change could mean more worries for asset exchanges as the SEC is reconsidering and broadening what it regards as 'securities'. Experts tracking these developments believe that the SEC will increase its scrutiny to look into start-up ventures violating the regulations. Many things will come under the direct scrutiny of the SEC, including stablecoins, NFTs (non-fungible tokens), and platforms that trade virtual currencies as securities. Some experts like the partner at Akin Gump Strauss Hauer & Feld LLP Ian McGinley say that they expect greater monitoring of decentralized finance platforms (or DeFi). DeFi platforms facilitate direct peer-to-peer financial transactions without any intermediaries. The SEC Chief, Gary Gensler is already interested in examining these DeFi platforms. There is also a lot of power concentration in the top DeFi platforms. The top five DeFi platforms control 80% of the total trading. The SEC has already been doubling its efforts against crypto platforms allowing users to lend and borrow assets and provide interest payments. Recently, the SEC filed a case against BlockFi, a crypto lending platform. BlockFi charged a variable interest rate for lending crypto assets on its platform, a practice that falls under the ambit of the SEC’s securities laws. The platform had to pay $100 million in damages to settle these charges of not taking appropriate measures to register their securities.

Under the new plan, the enforcement team will go after decentralized finance applications that are not as decentralized as they claim to be. They will also target virtual assets that are being sold as unregistered securities. Ultimately, the new regulation will target cryptocurrency exchanges selling unregistered securities. DeFi platforms will also face high scrutiny due to their largely unregulated nature and covert centralization.

5. G20 regulators call for new global rules on cryptocurrencies

* The Financial Stability Board will submit a report to the G20 Finance Ministers and Central Bank Governors in October on regulatory and supervisory

* The FSB is pointing to recent market turmoil as evidence of the risks crypto assets pose to financial stability.

The Financial Stability Board (FSB) called for new global rules for cryptocurrencies on Monday, and will submit a report to the G20 Finance Ministers and Central Bank Governors in October on regulatory and supervisory approaches to stablecoins and other crypto assets.

The body of regulators, government officials and central bankers pointed to recent market turmoil as evidence of risk to financial stability, highlighting that the failure of a market player can quickly transmit risks to other parts of the ecosystem and have spillover effects into traditional finance. The statement from the FSB made particular reference to “so-called” stablecoins, which have been on the agenda for several financial authorities since even before May's Terra crash.

The FSB is an international body based in Switzerland that coordinates on and promotes international financial stability. Its members include national authorities and central banks from 24 jurisdictions, including the US, Russia and China, and conducts outreach with approximately a further 70.

But while it's emphasizing current market issues as an impetus to act, the FSB has been looking at crypto for a while now. In February it published a report assessing risks from crypto assets, warning that they could pose to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system.

The FSB’s statement aligns with several recent comments from senior finance officials and committees. On July 5, the Bank of England’s Financial Policy Committee warned that crypto assets may one day pose a risk to the wider financial system and called for “enhanced regulation”. Last Friday, this sentiment was also echoed by US Federal Reserve vice chair Lael Brainard, who said that the sector needs "strong guardrails."

6. Three Arrows Creditors Get Emergency Hearing As Founders Fail to 'Cooperate'

Creditors say the fund’s remaining assets could be “transferred or otherwise disposed of” before creditors get their share.

Where in the world are Su Zhu and Kyle Davies? Lawyers involved in the liquidation proceedings of Three Arrows Capital’s British Virgin Islands fund would certainly like to know, as the hedge fund founders have not been cooperative in the proceedings so far and their current location is unknown.

* In court documents filed late Friday in New York, lawyers acting on behalf of the creditors said that the founders of the fund “have not yet begun to cooperate with the [proceeding] in any meaningful manner.”

* The lawyers said that persons identifying themselves as “Su Zhu” and “Kyle” were present on an initial Zoom call, but their video and audio was turned off and they would not respond to questions posed directly to them, with only their legal representatives answering questions.

* Lawyers for the creditors that visited Three Arrows’ Singapore office found it abandoned, according to court documents.

* Concerns are mounting that assets belonging to Three Arrows, which are largely in the form of cash, crypto, and NFTs could be easily transferred.

* Already, NFTs belonging to Three Arrows’ NFT fund Starry Night have been transferred to a new wallet for unexplained reasons.

* The creditors are seeking to freeze Three Arrows’ assets. But first, they are requesting the court to compel Three Arrows’ founders to list out the fund’s assets.

* They are also asking the court to subpoena the founders and have them provide a list of company assets including wallets it controls, bank accounts, digital assets in its possessions, derivatives contracts, securities, accounts receivables, and all company records.

A court hearing is scheduled for Tuesday morning in New York.

7. Delio Introduces South Korea’s First “Crypto Bank” Service

Delio (CEO James Jung), which claims to be a leader in digital asset finance in South Korea, has launched a Crypto Bank service and expanded its business into offering virtual banking services.

Since its founding in 2018, Delio claims it has been “leading the Korean crypto financial market by offering a variety of financial services related to digital assets, including savings and lending products.”

According to the report on blockchain and digital assets issued by the Korean government last year, Delio was “listed as the top digital asset company in Korea.”

Delio has consistently “expanded and diversified its crypto finance-related services” such as PBS (Prime Brokerage Service), DEX ‘Delioswap,’ and NFT marketplace ’01etc,’ generating “a cumulative transaction volume of KRW 2.4 trillion in 2021 making Delio Korea’s safest fund operating company.”

Delio was “the first company in Korea to receive a VASP license to operate crypto lending and savings services.”

As an institutional crypto-financial organization, Delio offers “a range of financial services in compliance with the legal guidelines set out by financial authorities after establishing a U.S.-side corporation and acquiring a U.S. MSB (Money Services Business) license.”

Meanwhile, Delio aims “to become a Web 3.0 company by building and expanding the range of crypto-financial businesses.”

In this regard, a number of preemptive investments “are underway, such as acquiring KOSDAQ-listed companies and mass recruiting blockchain developers.”

The term “crypto bank” refers to “a service that applies multiple financial services for crypto assets such as deposits, loans, asset transactions, and withdrawals offered by traditional commercial banks.”

Delio is the first of its kind in Korea, “representing the case of digital asset providers, and is considered one of the world’s best.”

The new Delio Bank service is “comparable to what is now offered by traditional financial banks.”

Delio Bank service is “linked to the MMDA account that enables the deposit and withdrawal of crypto assets at any time and offers daily compound earnings regardless of the performance when storing Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP).”

By integrating with Delio’s various digital asset financial services, “including lending and depositing, high security and user convenience have been enhanced.”

For the first time in the Korean crypto market history, Delio has “evolved into a crypto bank to emerge a range of crypto financial services including savings, lending, asset management, payment, and NFT to the global market.”

In addition, Delio plans “to open a Gangnam Private Banking Center branch in Seoul’s Gangnam district, the center of the Korea’s crypto industry.” Through the highly accessible Private Banking center, users can “directly experience sophisticated digital asset-related financial services.”

Various programs “such as the Economic Salon and Crypto Academy are intended to be utilized as an open space by all Delio members.” Apart from this, Delio is “considering opening new branches in Gwanghwamun and other locations.”

8. Just-In: Digital Euro Project: Experts To Finalize Roadmap Next Week

The European Central Bank (ECB) is organizing an online technical talk next week to explore the design of the Digital Euro. The ECB event could see experts from blockchain, crypto, and financial technology firms help the central bank finalize a privacy-focused digital euro design.

*Experts to Discuss the Digital Euro Design*

The ECB has low confidence in cryptocurrencies and would rather want to launch a central bank digital currency (CBDC). The central bank has invited experts to join for a technical talk on July 20 to seek design options for the Digital Euro.

The talk will largely focus on the application of a privacy-based CBDC in settlements of retail payments. Moreover, experts will discuss how payment asset issuers will settle transactions while maintaining security and preventing access to transaction details.

Furthermore, experts will explore the available examples of large-scale applications and back-end IT architecture to support private transactions.

“The talks will be held at expert level as closed sessions with members of the ECB’s digital euro project team. Each talk will comprise a presentation lasting 20 minutes, followed by 25 minutes for questions and answers approximately.”

The crypto market crash led ECB to reaffirm its negative stance on crypto. The ECB’s President Christine Lagarde had even referred to crypto as “worth nothing.”

Last October, the ECB started studying prospects of launching a central bank digital currency for the Euro region. The latest talk will help ECB plan digital euro design and its distribution to retailers and the public. After the completion of the phase, Eurosystem will decide on developing a digital euro.

*The ECB Concerns Over Stricter Crypto Regulations*

The ECB has always called for stricter crypto regulations due to increased risks in the crypto market. The Markets in Crypto-Assets (MiCA) rules will help increase oversight, investor protection, and environmental safeguards for crypto-assets.

Recently, the ECB joined the European Commission to issue a warning over the need for regulating the crypto market. The decision came after witnessing an increased adoption of cryptocurrencies and expansion by crypto companies.

9. UN Report: Venezuela Ranks Third Among Countries With Most Crypto Adoption

Venezuela, one of the first countries in Latam to be considered “crypto-friendly” by some standards, has ranked third in adoption rates, according to a report issued by the United Nations. The report, issued last month, states that the cryptocurrency ecosystem has grown by 2,300% between September 2019 and June 2021, and that the Covid-19 pandemic was one of the main catalysts for this growth.

*Venezuela Among Countries With Most Crypto Adoption*

A report issued by the United Nations Conference on Trade and Development has found that Venezuela ranks third among the countries with the most cryptocurrency adoption, only behind Russia and Bulgaria. The report, which also deals with the causes of this growth and crypto regulation, found that 10.3% of citizens in Venezuela held cryptocurrencies.

Russians were second on the list, with 11.9% of the population holding crypto, while Ukraine ranked first, with 10.7% of its citizens holding some kind of crypto. This can be explained by the economic situations these countries are facing and the swings their currencies are experiencing due to conflict.

The report also shows that developing countries have been more receptive to the cryptocurrency proposition. Of the first 20 countries with the most adoption, 15 are qualified as developing countries under United Nations standards.

The second reason that propelled this growth has to do with the view that citizens of these countries have about crypto as a useful tool to hedge their savings. This is why countries like Argentina and Venezuela, which have faced tough inflationary periods, are ranked high in cryptocurrency adoption reports.

This expansion has also fueled a regulatory response from governments in the area. Venezuela already has a fairly clear cryptocurrency legal framework, that establishes bitcoin and crypto mining as legal activities. Russia and Ukraine are in the process of also establishing clear rules for the use of crypto.

10. Institutional Whales Are Waiting to "Buy the Blood," Messari Report

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

The year 2021 was the year of institutional investors that fueled Bitcoin's run to almost $70,000. The bullrun would not be possible without enormous inflows from institutional investors like Paradigm, a16z and even 3AC, according to the Messari report. But in 2022, the situation changed drastically.

If during the last bullrun investors were aiming at the right exit from the market, today we see the opposite situation: institutions are looking for potential entries that will maximize their profits on the market.

In their report, Messari analysts and experts believe that institutions are coming back into the cryptocurrency industry, despite the low or nonexistent profitability of some funds. The same scenario was observed back in 2018, when institutions made their first purchases, when Bitcoin was trading at or below $10,000.

Considering that BTC lost over 70% of its value, purchasing the digital gold now is similar to buying the asset back in 2018.

News updates July 11, 2022

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