News updates June 12, 2022
1. Bitcoin price drops to lowest since May as Ethereum market trades at 18.4% loss
Bitcoin threatens its lowest weekly close since late 2020 as low weekend liquidity exacerbates existing weakness. Bitcoin (BTC) saw further losses on June 12 as thin weekend trading volumes fueled an ongoing sell-off.
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting lows of $27,150 on its sixth straight day of downside.
With hours to go until the weekly close, the pair was in danger of resuming the losing streak, which had previously seen a record nine weeks of red candles in a row.
To avoid that outcome and put in a second “green” close, BTC/USD needed to gain over $2,000 from current spot price, which at the time of writing was $27,400.
With support levels failing to change the mood thanks to the thinner liquidity during the weekend’s “out-of-hours” trading, analysts feared that a retest of May’s ten-month lows was due.
“Well, Bitcoin couldn't hold $29.3K and started dropping down some more. Looking to see how the $28.5K area is going to react,” Cointelegraph contributor Michaël van de Poppe wrote in his latest BTC update on June 11.
“If that doesn't hold, $26/24K on the cards.”
Amid continuing talk of “capitulation” across cryptoassets, others focused on the fate of highly-correlated stock markets. Mike McGlone, senior commodities strategist at Bloomberg Intelligence, risk assets more broadly could already have seen peak exuberance in the past two years.
“If the stock market keeps going down, virtually everything will have peaked,” he told Twitter followers.
“Just some normal reversion can feel like a crash and the 2020-21 risk asset pump may go down in history like 1929 and 1999.”
Ethereum makes key realized price crossover
For altcoins, meanwhile, the picture was more precarious.
Related: Bitcoin price threatens lowest weekly close since 2020 as inflation spooks markets
A look at the top ten cryptocurrencies by market cap revealed heavier daily losses than BTC/USD, with some shedding over 10%.
Ether (ETH), the largest altcoin, fell around 7% on the day, taking spot price below realized price for the first time since May.
Realized price refers to the combined price at which each token last moved, and its breach put ETH at increased risk of panic-based capitulation. Bitcoin’s realized price, at around $24,000, was barely touched during the May dip.
“With the price declines over the weekend, the Ethereum market has fallen below the $ETH Realized Price of $1,781,” on-chain analytics firm Glassnode commented on an accompanying chart.
“This means the market is holding an average unrealized loss of -18.4%. The Realized Price of ETH 2.0 deposits is higher at $2,404, with an unrealized loss of -39.6%.”
2. Bitcoin Takes A Beating At $27K As Crypto Economy Settles Just Above $1 Trillion.
The global cryptocurrency market was on track for another decline on Saturday, as Bitcoin and other top cryptocurrencies took a significant blow throughout the day.
The $1.19 trillion crypto industry is currently worth less than it did in July of last year. In the past week, the majority of prominent cryptocurrencies, including Bitcoin, Cardano, Ethereum, Solana, and others, have extended their losses against the US dollar.
Overall, the leading cryptocurrencies have lost between half and 80% of their all-time price peaks.
The BTC price dropped below $30,000 on Saturday following the release of a critical inflation report on Friday, which showed little indication that price drops will soon begin to cool off.
As of this writing, Bitcoin (BTC) is taking a beating and trading at $27,560.18, down 7.8% in the last seven days, Coingecko data show. This occurred after the world’s largest cryptocurrency remained steady at $30,000 for two days.
3. 9 Weeks Of Continuous Losses: What Spurred Bitcoin Volatility?
Bitcoin, one of the most valuable and commonly held cryptocurrency, recently hit one of its lowest points in several months. The coin saw a record of 9 weeks of unceasing losses. The drop in its value led to a decline in several digital assets, and the repercussions spread across the crypto world. Amidst all the uncertainty, the question that arises is- Why is crypto crashing? The start of the Bitcoin bearish plunge can be traced back to March of this year when the Terra announced its decision of buying $10 billion in BTC for its stablecoin reserves. Shortly after, the Federal Reserve tightened its monetary policy and Terra collapsed completely. Terra and its sister token Luna together knocked more than $270 billion of the crypto market’s trillion-dollar value. This led to heavy Bitcoin volatility, and the cryptocurrency fell by nearly 38%.
4. Crypto-Related Lawsuits Rising in Russia, Criminal Cases Increase by 40%
Courts in Russia are hearing a growing number of cases around crypto assets, a new study has shown. About two-thirds of them have been launched under provisions of the country’s Criminal Code but civil cases represent a large share as well.
*Criminal Cases Involving Cryptocurrency in Russia Near 1,000 in 2021*
Lawsuits related to cryptocurrency, exchange of digital assets and coin minting have seen a serious increase in Russia over the course of last year, reaching a total of 1,531. The number comes from research conducted by the cybersecurity company RTM Group and quoted by Izvestia this week.
The majority of these, 954 cases, have been initiated under various articles of the Russian Criminal Code, the daily wrote on Friday. Another quarter of the proceedings, 365, are civil cases, almost one in 10 (141) is a bankruptcy, and 5% (71) are administrative cases, the article detailed.
The authors of the study note that most often cryptocurrency appears in criminal cases related to drug trafficking as those behind such deals would like their payments to remain anonymous — 738 such cases were filed last year. Other criminal proceedings include the laundering of illicit funds using digital coins.
Claims against unjust enrichment through crypto transactions form the majority of civil law disputes (42 cases). A common scenario is when a person transfers money to a third party to buy cryptocurrency but later receives a smaller amount than expected or agreed.
Meanwhile, the number of bankruptcy cases related to ownership of cryptocurrency has doubled in 2021, the researchers revealed. In these proceedings, the Russian judiciary refers to crypto assets as property and the sides are required to provide documents proving they own the coins.
The illegal use of electricity for cryptocurrency mining is considered a civil offense in Russia which entails the collection of debt. During the examined period, Russians running underground mining facilities had to pay 61.5 million rubles (over $1.1 million at current rates) in nine such cases.
To prepare its report, RTM analyzed published acts of courts of general jurisdiction and arbitration courts as well as information obtained from the official correspondence of various departments. The results from its study appear as authorities in Moscow continue to debate over the legal status cryptocurrencies should have in Russia.
Indian Government's Chief Economic Adviser Warns of Danger in Crypto, Defi Without Regulation
The Indian government’s chief economic adviser has warned about innovations like crypto and decentralized finance (defi) in the absence of regulation. “We may not be fully aware or comprehend the kind of forces we are unleashing ourselves,” he opined.
*Indian Government’s Chief Economic Adviser Skeptical of Crypto, Defi, Decentralization*
The Indian government’s chief economic adviser (CEA), V. Anantha Nageswaran, reportedly warned about the danger of crypto and the risks posed by its lack of regulation Thursday at an Assocham event. Referring to cryptocurrency, he was quoted by local media as saying:
The government’s economic adviser explained that he agreed with Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar on crypto and decentralized finance (defi). The RBI official has warned that there currently appears to be a case of regulatory arbitrage with regard to crypto and defi rather than true financial innovation.
Commenting on whether cryptocurrency could be an alternative to fiat currencies, the economic adviser stressed that it has “to satisfy many purposes.” He elaborated: “It has to be a store of value, it has to have widespread acceptability, and it has to be a unit of account … In all these cases the new ‘innovations’ such as crypto or defi are yet to pass the test.”
“I would be somewhat guarded in my welcome of some of these fintech-based disruptions like defi and crypto etc,” he noted.
The Indian government is currently working on the country’s crypto policy. The finance ministry has consulted with the International Monetary Fund (IMF) and the World Bank on crypto regulations. Last week, the Securities and Exchange Board of India (SEBI) said that the decentralized nature of crypto makes regulation challenging.
Meanwhile, the Indian central bank remains skeptical of crypto. On Friday, RBI Governor Shaktikanta Das cautioned investors against trading in cryptocurrencies, reiterating that they “pose huge risks to financial stability.”
Crypto Market Pullback Imminent, According to Top Analyst – Here’s His Downside Targets for Bitcoin and Altcoins
A closely tracked market analyst is predicting a significant pullback for Bitcoin (BTC) and altcoins, which he says could drive the value of all crypto assets below the $1 trillion level.
Justin Bennett tells his 101,000 Twitter followers that the TOTAL chart, which tracks the market capitalization of all cryptocurrencies, is in the midst of a breakdown from a bearish continuation pattern.
“It doesn’t get much cleaner than this. Today’s breakdown from TOTAL opens up the $1 trillion psychological level. The actual objective is $950 billion to be exact.”
According to the crypto strategist, the $1 trillion price area offers a crucial support level for the entire digital asset markets.
Should the TOTAL chart follow Bennett’s script, he says altcoins will take the brunt of the correction.
“Bottom line: another 15% lower from the entire crypto market seems likely before we can start talking about the potential for relief. Remember that BTC will be the closest to that -15% mark. Alts, especially lower caps will probably outpace it by 1.5-2x.”
At time of writing, Bitcoin is changing hands for $27,885. A 15% corrective move could take Bitcoin to a fresh yearly low of $23,500. Meanwhile, altcoins could lose anywhere between 22.5% to 30% of their value, according to Bennett.
Bitcoin mass adoption prediction according to Blockware Intelligence report
*Blockware Intelligence’s report: an analysis of Bitcoin adoption*
The latest publication from Blockware Intelligence, the research division of Blockware Solutions, analyzes user adoption of Bitcoin.
To predict the rate of Bitcoin adoption, the model compared the adoption curves of the most disruptive technologies that have changed the concept of society forever. These include the Internet, followed by the automobile, electricity, radio, smartphones, social media etc.
The report explains how the curve representing the time series of the adoption rate of a technology is never linear:
*Report Findings & Results*
Bitcoin, like all technologies that need a community to support them, especially social media, enjoys the so-called “network effect”. This means that the more people recognize and adopt it, the more it reaps benefits, and vice versa.
Just think of Facebook’s network for example. If it were used by only 10 people, it would fail to fulfil its potential, just as those who use it would not benefit at all.
Consequently, more adoption equals a higher price. There is a positive relationship between the two factors, as the utility of the cryptocurrency itself increases, which is followed by an expansion in demand that increases its value.
The same variable was then used to calculate the final forecast of future Bitcoin adoption, projected beyond the year 2102.
The graph shows the percentage of the global population using Bitcoin in relation to the change in new BTC mined, both projected into the future
Bitcoin (BTC) Flying off Exchanges Amid Price Stagnancy, According to Crypto Analytics Firm IntoTheBlock
Despite ongoing price doldrums, investors continue to accumulate Bitcoin at a rapid pace to the tune of hundreds of millions of dollars worth of BTC, according to crypto analytics firm IntoTheBlock.
In a new analysis, Lucas Outumuro, head of research at IntoTheBlock, notes that centralized exchanges witnessed $730 million worth of BTC net outflows in the past week, on the heels of $1 billion worth of outflows the week before.
According to the analytics firm, net outflows are the total amount of Bitcoin leaving crypto exchanges minus the number of net inflows or BTC going into centralized exchanges over the last seven days.
Net exchange outflows point to accumulation, and the recent numbers suggest “strong demand” for Bitcoin when it is priced under the $30,000 level, according to the researcher.
BTC is trading at $29,109 at time of writing. The top-ranked crypto asset by market cap is down more than 2.7% in the past 24 hours and more than 2% in the past week.
Ethereum (ETH), by contrast, witnessed mild outflows worth $84 million this past week, after enduring more than $200 million worth of inflows the week before.
Crypto moving into exchanges can signal selling pressure, according to Outumuro. A 2021 study published by crypto analytics firm Santiment indicates large upticks in exchange inflows tend to lead to an average price drop of 5% for crypto assets.
ETH is trading at $1,665 at time of writing. The 2nd-ranked crypto asset by market cap is down more than 6% in the past 24 hours and more than 6% in the past seven days.
Is Bitcoin an Inflation Hedge? BTC and Crypto Market Dip Amid Reports of Rising Cost of Living in the US
A new report by the U.S. Bureau of Labor Statistics shows that inflation is once again on the rise, causing crypto markets and leading digital asset Bitcoin (BTC) to dip.
According to the newest Consumer Price Index Summary, which tracks the value of goods and services, overall prices rose 8.6% year-over-year in May, marking the largest increase in over 40 years.
The data reveals that the price increases were broad and widespread with the energy index leading the way, rising a staggering 34.6% over the last year. Within the energy index, gasoline, fuel oil, and electricity rose 48.7%, 106.7% and 12%, respectively.
Food also witnessed a significant price increase, rising by 10.1% year-over-year, the first uptick of 10% or more since 1981. Indices for shelter, used cars and trucks and airline fares also saw sharp price upswings in May.
The crypto markets responded to the news by shedding $45 billion in market capitalization. Leading digital assets Bitcoin and Ethereum (ETH) declined 3.9% and 6.6%, respectively, in the past day.
Other crypto assets that saw significant losses include smart contract platforms Cardano (ADA), down nearly 7% in the last 24 hours, and Solana (SOL), which lost almost 6% of its value in the same timeframe.
According to market intelligence firm Santiment, investors are betting on a sustained correction across the crypto markets.
“With crypto markets falling once again in tandem with the S&P500 bleeding, funding rates on exchanges have turned into short-central. Both Bitcoin and altcoins have seen major shorts turn up at the highest rates in a month. If too much fear, uncertainty and doubt appears, this can cause a bounce.”
Amid surging inflation figures, MicroStrategy CEO Michael Saylor tells his 2.5 million Twitter followers that he believes the top digital asset by market cap will continue to rise.
Weekend Massacre: Over $500M Liquidated as BTC Dumps to $27K, Altcoins See Double-Digits Crash
The crypto market went through yet another slump in the past 24 hours, especially painful for the altcoins.
The adverse price developments in the cryptocurrency space only intensified in the past 24 hours, with new weekly, monthly, and even yearly lows registered from many altcoins. With double-digit drops evident across many charts, it’s no wonder that the daily liquidations have shot up above $500 million.
* It’s safe to say that the crypto market has seen better days, and there weren’t all that long ago. On a more micro-scale, BTC, for one, traded above $32,000 last week, but each attempt to decisively overcome that level was halted in its tracks.
* The subsequent rejections brought the asset south to around $30,000 before the situation worsened on Friday and the freefall began. As of now, bitcoin struggles to remain above $27,000 after another multi-thousand-dollar drop.
* However, while BTC has it bad, the altcoins are in a much worse shape. Double-digit losses are evident from almost all alternative coins.
* Ethereum leads this adverse trend with a massive 14% daily drop. The second-largest cryptocurrency is down to $1,450, meaning that it has lost over $500 in days.
* BNB, Cardano, Ripple, Solana, Dogecoin, Polkadot, Avalanche, Shiba Inu, and many others have seen double-digit price declines as well.
* Overall, the cryptocurrency market capitalization has dumped to almost a yearly low beneath $1.1 trillion. The metric is down by $200 billion in less than a week.
* As such, the number of liquidations and wrecked traders has skyrocketed (again). The traders in pain are up to 180,000 since yesterday, while the total liquidations are way over $500 million on a daily scale and $200 million in the past 12 hours.
* Once again, ETH positions account for the majority of this share, with almost $250 million in liquidations.
JPMorgan Wants to Bring Trillions of Dollars of Tokenized Assets to DeFi
The bank’s recent tokenization of money market funds with BlackRock dovetails with an institutional DeFi project led by the Monetary Authority of Singapore.
AUSTIN, Texas — JPMorgan (JPM) hopes it has found a way for decentralized finance (DeFi) developers to leverage the yield-generating potential of non-crypto assets.
Speaking to CoinDesk at Consensus 2022 in Austin, Texas, Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, described in detail the bank’s institutional-grade DeFi plans and highlighted how much value in tokenized assets is waiting in the wings.
Over time, we think tokenizing U.S. Treasurys or money market fund shares, for example, means these could all potentially be used as collateral in DeFi pools,” Lobban said. “The overall goal is to bring these trillions of dollars of assets into DeFi, so that we can use these new mechanisms for trading, borrowing [and] lending, but with the scale of institutional assets.”
Institutional DeFi generally means imposing know-your-customer (KYC) strictures on crypto’s permissionless lending pools, which has started to happen in pockets of innovation such as Aave Arc, as well as in a recently announced project involving Siam Commercial Bank and Compound Treasury.
JPMorgan’s plans incorporating the tokenization of traditional assets point to a much larger scale. Onyx Digital Assets sees two complementary parts to bringing bank-grade DeFi to fruition, Lobban explained.
One component is JPMorgan’s blockchain-based collateral settlement system that was extended last month to include tokenized versions of BlackRock’s money market fund shares, a kind of mutual fund invested in cash and highly liquid short-term debt instruments. That kind of application on the Onyx Digital Assets blockchain, which is settled in the bank’s in-house digital token JPM Coin, has had $350 billion in trading volume, Lobban pointed out.
The second piece of the puzzle is a recent pilot that is being led by the Monetary Authority of Singapore and includes JPMorgan, DBS Bank and Marketnode and is dubbed “Project Guardian.” It tests institutional-friendly DeFi using permissioned liquidity pools that are made up of tokenized bonds and deposits.
These ventures into DeFi will involve public blockchains and have a permissioned structure similar in many ways to what is being done by the likes of Aave Arc and Fireblocks. One difference, Lobban noted, is that verifying customer information in Project Guardian is being done by large financial institutions that are participating, as opposed to DeFi platforms and crypto-native custody firms. In other words, a JPMorgan trader has to prove he has the rights and entitlements to trade on behalf of the Wall Street bank.
Ukraine to Use NFTs to Save Its Cultural ‘DNA’ Amid Russian Invasion
AUSTIN, Texas — Amid the clear and present danger of Russia's military destroying Ukraine's architectural marvels, museums and other cultural sites, Ukraine plans to digitize "every single piece of art or history" it can, announced Michael Chobanian, President of the Blockchain Association of Ukraine, at Consensus 2022 on Saturday.
Today we are announcing a new project [aimed at] how we can save the DNA of the Ukrainian people, Ukrainian culture and Ukrainian history," Chobanian said. "Right now, they are bombing museums, churches, and cultural sites. So before they are destroyed...we're going to digitize every single piece of art or history that we have in museums. We're going to NFT it and put it on the blockchain," Chobanian said.
Ukraine has already leveraged crypto and blockchain to finance its defense against Russia's invasion, raising over $135 million in crypto from donors around the world by mid-May, analytics firm Crystal Blockchain told CoinDesk.
Chobanian made the NFT plan announcement alongside Alex Bornyakov, Ukraine's deputy minister in the Ministry of Digital Transformation and the de facto crypto spokesperson for the government, on a panel entitled "Crypto at War: Behind Ukraine's Historic Crypto Fundraiser."
However, the project is not a government initiative, but rather an effort by Ukraine's blockchain community.
NEAR Protocol's co-founder, Illia Polosukhin, who was also on stage, revealed later that NEAR will be the first blockchain partner of the project.
"It is extremely important to bring all the Ukrainian heritage on-chain and offer it to the world and preserve it forever," Polosukhin said.
Ukraine's historic NFT-ization of its artifacts will also reveal "what is being held" where, in order to prevent corrupt government officials from stealing items during unpredictable times like these, Chobanian added.
Digitizing and placing an artifact as an NFT on a blockchain will be proof that an artifact existed. The project will aim to provide a digital window into Ukraine's cultural DNA because anyone from anywhere will be able to view the items as NFTs all in one place.
It's a national project, not a private project; it's what we do as the Blockchain Association of Ukraine and this way no one can delete it," said Chobanian, who is also the person managing donations for the Crypto Fund of Ukraine and the founder of Ukraine's Kuna exchange.
The first government NFT project was Ukraine's MetaHistory NFT Museum, which was created to preserve facts about the war intended to defy "Putin's disinformation campaign." NFT's bought on that platform will be used to fund the latest NFT preservation project.
Do Kwon dismisses allegation of cashing out $2.7B from Terra (LUNA), UST
The rumor surfaced after a Twitter thread by @FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.
Do Kwon, the CEO and co-founder of the infamous Terra (LUNA) and TerraUSD (UST) ecosystems, refuted the claims of cashing out $80 million every month for nearly three years.
Numerous unconfirmed reports surfaced on June 11, claiming Kwon’s participation in draining liquidity out of LUNA and UST before the crash to purchase US dollar-pegged stablecoin such as Tether (USDT).
Rumors about Kwon cashing out LUNA and UST reserves surfaced after a Twitter thread by @FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.
Sharing his side of the story, Kwon stated that the recent rumor of cashing out $80 million per month contradicts the claims that he still holds most of his LUNA holdings, procured during the airdrop. Moreover, Kwon further reiterated that his income over the past two years has only been a cash salary from TerraForm Labs (TFL).
Reserve Bank of India deputy gov tells IMF: CBDCs can kill digital currencies.
T. Rabi Sankar, the deputy governor of the Reserve Bank of India (RBI), has stated that his organization believes that central bank digital currencies (CBDCs) have the potential to kill private digital currencies.
According to Sankar, India’s state-run payment platforms, including Unified Payments Interface (UPI) and Aadhar, are already seeing massive adoption despite challenges. The deputy governor highlighted the UPI system, noting that its simplicity has been at the center of its success. The platform, a fiat-based peer-to-peer payments system, has seen an average transaction growth of 160% per annum over the last five years and was especially accelerated by the 2020 lockdown.
In contrast, he noted that blockchain technology and digital assets have failed to see the same level of adoption growth.
“Blockchain, which was introduced six-eight years before UPI started, even today is being referred to as a potentially revolutionary technology. [Blockchain] use cases haven’t really been established that much at the speed it initially was hoped for,” he said.
This slow adoption has been due to several shortcomings of digital currencies, the deputy said. Some of these are the lack of an issuer and intrinsic value. Based on these, Sankar thinks CBDCs will replace even the little use case that digital assets have.
“We believe that central bank digital currencies (CBDCs) could actually be able to kill whatever little case that could be for private cryptocurrencies,” he added.
*India and the IMF have similar views on digital currencies and CBDCs*
Sankar’s view comes just after the RBI published its annual report, where it proposed to adopt a three-phased approach to a CBDC rollout. The central bank even named the development of the CBDC one of its major initiatives for 2022-23.
Meanwhile, India’s central bank’s stance on digital assets has long been adversarial. Last month, RBI Governor Shaktikanta Das reiterated that digital currencies have no underlying value and hence need to be regulated carefully for the stability of the economy.
The outlook on digital assets and CBDCs is one thing India shares with the IMF. The IMF has also long warned nation-states of the dangers of digital currency adoption. The organization has told El Salvador and the Central Africa Republic that their adoption of Bitcoin as legal tender is concerning.
Similarly, the IMF told Argentina to discourage digital currency adoption as part of a bailout deal. The Financial Times notes that the IMF is strongly behind the globalization of CBDCs.
