News updates July 26, 2022
1. Bitcoin falls to a 1-week low as yet another Fed rate hike beckons.
The price of Bitcoin (BTC) dropped to a level not seen in more than a week on July 26, as investor jitters increased ahead of an impending interest-rate rise by the Federal Reserve (Fed).
Currently, the flagship cryptocurrency is trading below $21,000, at $20,955, down 4.26% on the day and a further 7.17% across the last week, according to CoinMarketCap data retrieved by Finbold.
As a result, the digital asset’s entire market value is now sitting at $400.13 billion, the last time BTC had a market cap of this size was on July 18—more than a week ago.
The decline has dampened hopes for a lasting Bitcoin recovery and reverted the token to a trading range of between $19,000 to $22,000. The anticipated 75-basis-point Fed rate hike on Wednesday, July 27, is part of a tightening cycle squeezing liquidity; consequently, investors’ appetite for risk appears to be on the wane.
“We’ve had some stabilization over the past few weeks and that gave some folks confidence that perhaps a bottom was being put in place. We’re not so convinced,” Katie Stockton, co-founder of Fairlead Strategies, said on Bloomberg Television.
2. Trader Who Called May 2021 Bitcoin Crash Says BTC Flashing Strong Bottom Signals, Predicts Short-Term Rally.
The analyst who called the May 2021 Bitcoin (BTC) collapse and the double top pattern at $69,000 now thinks BTC’s chart looks optimistic.
Pseudonymous analyst Dave the Wave tells his 121,500 Twitter followers that Bitcoin’s weekly moving average convergence divergence (MACD) indicator is flashing a strong bottom signal.
Traders use the MACD to spot possible trend reversals. Looking at the trader’s chart, Bitcoin’s weekly MACD appears to be rising at a level that has marked the bottom of the 2015 and 2018 bear markets.
On top of a recovering MACD, Dave the Wave also says he’s optimistic about Bitcoin’s price chart as BTC is currently hovering at an area of long-term support.
“Why have some confidence in this Bitcoin chart? Realism and continuity…. as opposed to continually projecting a hyper-bull outlook onto the chart. Looking good.”
3. Glassnode: What Bitcoin Long-Term Holder Cost Basis Tells Us About Bear Market Length.
Data from Glassnode shows the Bitcoin long-term holder cost basis is currently above the realized price of the crypto.
Bitcoin Long-Term Holder Cost Basis May Have Hints For Bear Market Length
As per the latest weekly report from the analytics firm Glassnode, the LTH cost basis has remained below the realized price for a period of between 248 to 575 days in previous bear markets.
Bitcoin “long-term holders” (or LTHs in short) include all investors who have been holding onto their coins since at least 155 days without moving or selling them.
The realized cap of the market is calculated by multiplying each coin in circulation with the price it was last moved/sold at and then taking a sum.
4. Bitcoin Is Recession Proof”: Key Comparative Data Ahead Of FOMC.
Even as concerns of a potential economic recession loom over the markets, the cryptocurrency space appears relatively less volatile. Interestingly, the White House had in a blog last week discussed what exactly is the official definition of recession. It is unlikely that the recent decline could mean we are in a recession, it said. This brings to the question as to how would Bitcoin perform if the economy were to enter a recession in the future.
Why Bitcoin’s Second Worst Growth Is Still Better?
Amid all the macroeconomic hurdles and overall uncertainty due to serial crypto related setbacks, Bitcoin too suffered in recent times. However, Bitcoin’s (BTC) decline in recent times is still not worse than some of the high performance traditional assets. According to data from Crypto Compare, the Q2 of 2022 registered Bitcoin’s second worst quarterly performance in its history.
“Q2 saw Bitcoin (BTC) experience its second worst quarterly performance in its history. Strikingly, various growth stocks still underperformed BTC over this period, even with much lower volatility.”
High turbulence was witnessed with frequent headwinds during the second quarter, making it difficult for recovery. Coin Bureau, a crypto influencer, said the quarter “will go down in infamy in crypto history.” So much happened that it is hard to summarize and condense it in a single report, he added.
Is Bitcoin Recession Proof?
Despite such a bad performance during the period, Bitcoin (BTC) trumped some of the big company stocks in the market. When compared with company stocks of Peloton, Netflix, Roblox, and Snapchat, Bitcoin (BTC) performed better in the first half of 2022. To an extent, this explains why some of the crypto supporters call Bitcoin recession proof. However, macroeconomic events clearly continue to affect crypto prices from time to time. It remains to be seen if Bitcoin isolates itself from the macro links.
5. Welfare Developments To Launch The First Ever Bitcoin Sky Mansion In Dubai.
The World’s first BTC sky mansion available for fractional ownership is being launched in Dubai.
Bitcoin seems to be gaining more momentum after years of apathy against it by governments, people, and institutions. That has hanged over the last few years, and now, a new investment dimension is being conceived. According to recent reports by Khaleej times, Dubai is slated to host the first ever Bitcoin Sky Mansion, a one-of-kind structure that will be floated in the market for fractional ownership.
Fractional ownership means that investors will be able to purchase a share of the building in terms of Bitcoin. The building will be inaugurated by Welfare Developments in partnership with Propchain, an entity that facilitates real estate investments across the world via digital means.
Facing Burj Khalifa
The interesting part about the Bitcoin Sky Mansion is its striking architecture and strategic placement with the city of Dubai. Dubai is part of the United Arab Emirates, and it’s one of the top spots where new technologies are highly appreciated. It’s no surprise that the BSM is getting set up in Dubai.
The 6,000sq building stands in the middle of the rich city, with its three floors towering over the popular Boulevard Point. From the balcony, a clear view of the city’s pride, Burj Khalifa, is breathtaking. Each room in the Bitcoin Sky Mansion is branded “BTC,” giving off the vibe of space highly receptive to cryptos and especially in love with Bitcoin. The building is almost complete and will be ready for occupation and fractional ownership in the next few weeks. That’s according to the CEO of Propchain, Robin Baghs.
A Big Step In BTC Popularity
The inauguration of such an attention-catching building in the middle of one of the most popular cities on the planet could be a great contribution to the crypto industry and the Bitcoin community in particular. Bitcoin is bound to be more popular by this measure and possibly score great adoption and acceptance across the world. This could translate into an impressive price action sometime in the future.
6. Philippine Central Bank Governor Explains Crypto Policy — 'I Don't Want It Banned'
The governor of the central bank of the Philippines has shared his policy on cryptocurrency regulation. “I don’t want it banned,” he said, advising investors not to invest money they cannot afford to lose in crypto.
*Philippine Central Bank Governor on Crypto Regulation*
Felipe Medalla, the governor of the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, shared his policy on cryptocurrency in an interview with Forkast, published Friday.
The central bank governor explained that in his opinion cryptocurrency “has really very little use for actual payments, especially when the price is so volatile.” Emphasizing that currency cannot be very volatile, he suggested calling it “crypto assets.”
Medalla then slammed bitcoin’s environmental impact, stating that the crypto is “bad for the environment because the amount of electricity that the miners use is bigger than the electric consumption of some countries.”
Nonetheless, crypto “is a good thing” since “it’s an alternative to government” in countries “with so much financial and economic repression,” he conceded. “The other thing that it’s useful for is evading monitoring by government,” the central banker pointed out, adding: “The question is what social good does that achieve?”
Emphasizing that “In most countries where the government is not perfect but is largely contributing to the common good, you don’t necessarily want to weaken the government,” Medalla opined:
The Philippine central banker proceeded to talk about the crypto market downturn. “It’s already happened that the bubble has collapsed. Right? Some of the crypto assets have fallen by almost two-thirds in a very, very short period,” Medalla detailed, elaborating:
Regarding the Philippine central bank’s crypto policy, Medalla stressed: “Our policy standpoint, it must not be used for evading anti-money laundering and know your customer rules.”
He concluded that for exchanges, “where you exchange crypto assets for bank deposits or physical currency,” it’s the central bank’s policy to enforce “all the rules that are needed to prevent money laundering, especially to finance crimes.”
7. US SEC Probes Coinbase Over Unregistered Securities Allegations
Coinbase previously said it “does not list securities.” SEC chair Gary Gensler said it should be registered as a national securities exchange
* The SEC is determining whether Coinbase allowed US-based users to trade unregistered securities
* The probe has wider implications should an SEC decision define certain crypto assets as securities
The US Securities and Exchange Commission (SEC) is looking into whether crypto exchange Coinbase allowed its US-based users to trade unregistered securities, Bloomberg reported Monday.
Coinbase, one of the largest exchanges in the world, allows users to trade more than 150 tokens on its platform. If those tokens were deemed securities, the exchange would have to register with the SEC, the regulator has warned.
The investigation is unrelated to the insider trading case involving cryptocurrencies on the platform allegedly linked to trades made by Coinbase’s product manager Ishan Wahi. The SEC has said that nine of the dozen digital tokens involved in case were securities, including seven that are listed on the exchange.
Questions around what constitutes a security or a commodity in crypto — as well as which regulator has jurisdiction (SEC or CFTC) — continue to trouble industry participants and providers who say they require clearer guidelines to operate.
SEC chair Gary Gensler previously said he believes Coinbase should be registered as a national securities exchange. Coinbase has denied its affiliation, claiming it “does not list securities. End of story,” in a blog post last week.
Digital assets will be considered securities if the token can help investors collectively fund a company with the intention of profiting from the employees that work at the organization, according to definitions laid out in the Howey Test
Aside from bitcoin, which US regulators consider a commodity, the SEC has not specified which coins are securities and it is up to each exchange’s discretion to decide whether to list them for trade.
Exchanges are currently hesitant to register their offerings as securities because investor protection rules are complicated and incompatible with digital assets.
8. US Senators Push Bill to Make Small Crypto Transactions Tax-Free
The top Republican on the Senate Banking Committee joined Democrat Kyrsten Sinema in legislation to exempt transactions of less than $50
Prominent U.S. senators are trying to free Americans from tracking taxes every time cryptocurrencies change hands, introducing a bill that would exempt them from reporting any transactions up to $50 or any trade in which they earn less than $50.
“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way,” said Toomey. He has sought to help the crypto industry on multiple tracks before he retires from the Senate at the end of this session.
The latest bill will let people “use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”
The Internal Revenue Service has held a firm crypto policy: “When you sell virtual currency, you must recognize any capital gain or loss on the sale,” the IRS declares on its website.
That standard has been among the roadblocks standing in the way of crypto’s use in the U.S. as an alternative way to pay for things, industry advocates have argued.
This would foster use of crypto for retail payments, subscription services, and micro transactions,” said Jerry Brito, executive director of Coin Center, a crypto policy think tank in Washington. “More importantly, it would foster the development of decentralized blockchain infrastructure generally because networks depend on small transaction fees that today saddle users with compliance friction.”
However, the new legislation faces an uphill climb in a Congress on the verge of a lengthy August recess before the midterm elections. Though there has been some movement on an effort to regulate stablecoins, most congressional insiders predict that crypto is unlikely to see significant progress on legislation until next year.
9. Ukraine’s Digital Transformation Minister Says Crypto Remains Essential To Country’s Defense Despite Crypto Winter
In a tweet on Tuesday, Ukraine’s Deputy Minister of Digital Transformation, Alex Bornyakov, maintains that crypto remains a key part of Ukraine’s defense strategy despite the extended market downturn, adding that he believes crypto is here to stay.
“Despite the ‘bear market’ crypto has become an essential tool of Ukraine’s defence, providing flexibility and speed that literally saved our soldiers’ lives. Every ‘crypto winter’ leads to a ‘crypto spring’, but the industry is here to stay,” Bornyakov wrote in the tweet today.
It is worth noting that since Putin’s Russia came bearing down on Ukraine’s borders, the East European nation has leaned to crypto as a means of raising funds due to its unique advantages over other forms of cross-border payments. Michael Chobanian, the founder of Ukraine’s largest exchange, KUNA, highlighted this while speaking with Bloomberg, noting that while a transaction on the blockchain took minutes, it took about three days for international payments to be processed through the traditional banking system.
While it is difficult to estimate how much Ukraine has raised through crypto, several sources put the figure above $100 million. Notably, the country raised about $10 million in just four days after the war started. In addition, Bornyakov had earlier revealed that funds raised from crypto had provided key emergency equipment needed for the early days of the war, and food, fuel, and bulletproof vests for soldiers.
However, Ukraine’s crypto stash has not been unaffected by the extended crypto market downturn. As The Kyiv Independent reported on Monday, charities receiving crypto donations have also seen a decline in the frequency of donations.
Despite these hurdles in the wake of the crypto winter, Ukraine remains undeterred. The Ukraine government continues to pursue crypto fundraising initiatives as it has now called on artists to create NFTs to raise funds for the country’s defense and rebuilding process.
“We’re using the latest technologies to bring Ukraine closer to victory,” the Ukrainian Minister of Digital Transformation Mykhailo Fedorov reportedly said.