News Updates July 20, 2022
1. Bitcoin rises above $24,000 as crypto market cap retakes $1 trillion.Bitcoin was trading up over 7% on Wednesday.
The rally in bitcoin and crypto in general has pushed the global market cap above $1 trillion again.
Bitcoin rose above $24,000 on Wednesday amid a broader crypto market rebound that has seen the global market cap surpasses $1 trillion.
Bitcoin was trading at $24,173 at the time of writing, the first time it has traded in this range since June 16. The cryptocurrency is up more than 23% over the past seven days, according to CoinGecko data. Crypto markets have experienced a recovery of sorts over the past week after a tumultuous time in May and June — following the Terra blockchain collapse and liquidity crisis for crypto lending platforms. The market tumult during this time — partly due to many forced liquidations — saw bitcoin register its worst quarter in 11 years.
2. Weekly Cryptocurrency Market Analysis: Altcoins Fail to Hold at Higher Price Levels as Bears Sell at Rallies
LRC and XTZ have bullish momentum again as the altcoins break out above the moving average lines. The other altcoins like LEO, AMP and TRX are in a downward correction as they risk another decline.
*UNUS SED LEO*
UNUS SED LEO (LEO) is in a downward correction as the price falls below the moving average lines. Since July 13, LEO has fallen above the $5.28 support and resumed consolidation below the moving average lines. On the downside, there is no possibility of further decline as the altcoin has fallen into the oversold zone of the market. Also, there is a long candle tail in place. The long candle tail indicates that there is strong buying pressure at lower price levels.
Meanwhile, LEO is below the 20% area of the daily stochastic. This means that the cryptocurrency is in the oversold area of the market. It is the cryptocurrency with the lowest performance in the past week. It has the following characteristics:
Loopring (LRC) is in a downward correction as the price breaks above the moving average lines. The cryptocurrency has entered the bullish trend zone and there is a tendency for further upward movement of the altcoin. On the upside, the market will reach the highs of $0.60 and $0.80 if the bullish momentum is maintained. However, if the bulls face rejection at the $0.60 high, the crypto will be forced to move sideways below the recent high.
The altcoin is at level 61 of the Relative Strength Index for period 14, indicating that LRC is in the bullish trend zone and capable of further upward movement. It is the cryptocurrency with the second worst performance in the past week. The cryptocurrency has the following characteristics:
3. Investors no longer see crypto as a viable long-term wealth creator, new study suggests
It would seem for some investors the allure of cryptocurrencies as a long-term investment to help generate wealth over the long-term is waning.
In particular, the respondents of a survey on Americans’ preferred long-term investments for collecting wealth had their say on their choices and crypto came out bottom, according to the findings of Bankrate’s tenth annual study published on July 20.
Specifically, only 6% of the 1,025 people who participated in the study chose cryptocurrency as their primary long-term investment, which is a significant drop from the 92% who did so in 2021.
The investment alternatives that were provided, included investing in real estate, equities, bonds, gold, and other precious metals, but ultimately showed that crypto was the one chosen by the fewest people.
4. Why Tesla May Have To Resume Bitcoin Payments Again?
The Bitcoin Mining Council has announced the result of its second-quarter survey. The survey reveals that the global bitcoin mining industry’s sustainability electricity mix is 59.5%.
A sustainability mix of 59.5% means that it is the 5th quarter in a row when Bitcoin’s power mix is above 50%. In the May of 2021, Tesla stopped accepting Bitcoin transactions citing environmental concerns. He revealed that a consistent dependence on renewable energy for more than 50% of Bitcoin mining would be the parameter for the resumption of Bitcoin as a mode of payment.
Bitcoin mining has long been criticized for its energy usage. Bitcoin’s consensus mechanism, Proof-Of-Work, is designed to encourage competition among miners, leading to extravagant energy usage. However, recent data suggests that Bitcoin has made considerable progress.
The Bitcoin Mining Council collects data from over 50% of the global Bitcoin network and is a pretty good representation of the network as aMichael Saylor, the CEO of MicroStrategy and a key supporter of BMC, celebrated the technological improvement of the network. He also revealed that it is hard to find any industry with this level of clean energy and efficiency.
The proponents of Bitcoin have long pointed out that Fiat currencies have more of a negative environmental impact than Bitcoin. Willy Woo, a notable Bitcoin anaylst, highlights that Bitcoin mining scavenges waste energy.
5. Binance announces wallet maintenance impacting multiple networks.
Binance's wallet maintenance will last up to three hours, starting at 05:55 am UTC on 21 July.
Bitcoin, Ethereum are among impacted wallets, but Binance says withdrawals will resume immediately after the a
Customers need not worry as this has nothing to do with withdrawals recently seen across the crypto market
Binance has announced it will pause withdrawals across multiple wallets to allow for maintenance, with the halt lasting about three hours on 21 July 2022.
The exchange had notified its customers of the wallet maintenance in an announcement published on Tuesday. According to the platform, the withdrawal pause will start at 05:00 am UTC on Thursday, July 21.
6. UK Markets Bill Extends Banking Rules to Crypto Assets
The U.K. introduced the bill, which also addresses stablecoins, to Parliament earlier Wednesday, but lawmakers won’t take up the measure until later in the week.
The U.K. Treasury has unveiled its proposed digital asset legislation a day before members of Parliament plan to begin debate on the measures.
According to a copy of the legislation published online, existing rules for banking and payment systems will be modified or extended to cover digital assets. The proposed regulations are part of a 335-page financial services and markets bill aimed at strengthening the U.K. financial systems following the country’s exit from the European Union.
In the bill, cryptocurrencies are referred to as “digital settlement assets,” (DSAs), meaning “a digital representation of value or rights.” The rules will largely apply to stablecoins – cryptocurrencies whose prices are pegged to another asset, such as the U.S. dollar, along with other digital assets used for payments or settlements. The definition of DSAs laid out in the file also include digital assets used for payments that aren’t “cryptographically secured.”
7. Analysts Suspect the Fed Will Bump Federal Funds Rate by 75 bps Next Week, Others Predict the 'Biggest Hike in Decades’.
Following the recent U.S. consumer price index report that indicated inflation in America has reached a 40-year high, many expect the Federal Reserve to hike the benchmark interest rate by 75 to 100 basis points (bps) on July 26. Blackstone’s Private Wealth Solutions expects the Fed to raise the rate by 75 bps and bankrate.com believes a three-quarter rate hike is in the cards as well.
All Eyes on the Fed’s Next Move — Market Strategists Predict a 75 to 100 bps Interest Rate Hike Next Week
Next week, roughly six days from now, the U.S. central bank will meet once again in order to assess and change the federal funds rate. The Federal Reserve has been hiking the benchmark rate since mid-March 2022. At that time in March, the central bank increased the benchmark interest rate from near zero to 0.25% for the first time since 2018. After the Fed did that, U.S. inflation continued to rise and JPMorgan economists predicted the central bank would raise the rate by 75 bps in June.
The rate hike forecast came to fruition as the U.S. central bank increased the federal funds rate by 75 bps on June 15, 2022. America had not seen a 75 bps jump since 1994 when Alan Greenspan served as the 13th chair of the Federal Reserve. At the time, the country was managed by Democrat president Bill Clinton and inflation was quite low at 2.7%. However, many observers at the time said Greenspan was often hawkish and market indices were becoming volatile.
Before Greenspan’s infamous 75 bps rate hike, the tech giant Cisco Systems saw a 16% decline in value and dropped 54% up until October 1994. Shares stemming from Applied Materials corrected by 30%, and EMC saw a similar decline. The investment strategist at Goldman Sachs, Abby Cohen, noted that close to 40% of all active stocks dropped more than 30% from the tops reached in 1994. Greenspan started to tighten monetary policy, and the investment strategist at Standard & Poor, Arnold Kaufman, said at the time that the U.S. economy would rebound in 1995.
“We don’t see this as a bear market,” Kaufman explained that year. “The difference is that we’re buying the ‘soft landing’ concept [for the economy], while others are not.”
Kaufman was correct, as the U.S. economy lifted and market indices were less volatile, and began to steadily rise in 1995. More than 27 years later, the 16th chair of the Federal Reserve, Jerome Powell, seems to be in a hawkish mode ever since the first rate hike in March. While inflation continues to print perpetual highs, Powell thinks that current price pressures will dissipate fast, and the central bank’s chair believes the Fed can tame the scorching hot inflation.
8. Japan's Self Regulatory Project in Peril as Financial Regulator Reprimands Crypto Advocacy Group: Report
The country's crypto self-regulatory body JVCEA has received an “extremely stern warning” from financial regulators over delays in anti-money laundering rules and poor governance.
Japan's "self-regulation experiment" for its digital asset space is unraveling as disagreements between financial regulators the industry advocacy body deepen, according to a Financial Times (FT) report.
* The FT conducted "extensive interviews" with industry executives, lawyers and financial regulators who "sounded the alarm over a spiraling regulatory crisis in Japan’s multibillion-dollar virtual asset business," according to the report.
* The Financial Services Agency (FSA), the country's financial watchdog, has "repeatedly criticized" the Japan Virtual Currency Exchange Association (JVCEA), an advocacy group set up in 2018 to promote self-regulation in the crypto space, the report said.
* Meeting minutes obtained by the FT showed the JVCEA receiving an “extremely stern warning” from the FSA in two meetings last year. The regulator was concerned about delays in anti-money laundering (AML) regulation was not privy to deliberations and decision-making processes of the association, according to the report.
* The minutes also showed the FSA saw a lack of communication between JVCEA leadership and members, resulting in "poor management." The association is made up of around 40 digital asset firms representing the industry.
* According to the report, the secretariat of the JVCEA formed a union for protection in what the report calls "a stunning act of defiance for Japan."
* JVCEA board member Masao Yanaga told the FT that the JVCEA lacked resources, and that AML regulations were hard to implement because of a lack of international agreements on sharing data.
* The JVCEA also said it was making improvements in response to the regulator's concerns.
* Regulators around the world are scrambling to ensure sturdy rules are in place after the recent market downturn saw a number of high-profile crypto companies collapse and $2 trillion wiped out of crypto markets in a matter of weeks.
