News updates March 11, 2022
1. Bitcoin's inflation is now 5x lower than U.S. dollar's and decreasing
With more than 90% of Bitcoin (BTC) in circulating supply, its inflation rate has gone down to 1.7% and is now five times lower than that of the United States dollar (USD), positioning the popular cryptocurrency as a potential defense against inflation.
The details of Bitcoin’s declining inflation are demonstrated with a chart that Glassnode’s co-founder Rafael Schultze-Kraft shared in a tweet on March 10, who explained that Bitcoin’s inflation rate was following its “preprogrammed, fully predictable downwards trajectory.”
As Finbold reported earlier, the inflation rate of Bitcoin in January was 1.8% showing that the flagship digital asset has decreased by 0.1% since in a little over a month.
Meanwhile, the inflation rate of the U.S. dollar continues to soar, hitting 7.9% in February. This is its highest inflation rate in 40 years or since 1981, “even before the oil spike,” as tweeted by Holger Zschaepitz, the senior financial reporter at Welt.
This means that the inflation rate of Bitcoin at press time was as much as five times lower than that of the U.S. dollar.
2. Bitcoin Key Indicators Suggest Strengthening Case For More Downsides:
Bitcoin gained bearish momentum below $40,000 against the US Dollar. BTC is at risk of more downsides towards the $37,200 and $36,600 levels.
*Bitcoin started another decline below the $40,000 and $39,000 levels.
*The price is trading below $39,000 and the 100 hourly simple moving average.
*There is a key bearish trend line forming with resistance near $39,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
*The pair might continue to move down unless the bulls able to push the price above $39,550.
Bitcoin Price Extends Decline;
Bitcoin price struggled to stay above the $40,000 support zone. As a result, BTC extended decline below the $39,550 support zone and the 100 hourly simple moving average.
The price traded below the 61.8% Fib retracement level of the main increase from the $37,160 swing low to $42,550 swing high. It is now showing a few bearish signs below the $39,200 and $39,000 support levels.
Bitcoin is also testing the 76.4% Fib retracement level of the main increase from the $37,160 swing low to $42,550 swing high at $38,430. If there is a minor recovery wave, the price might face resistance near the $38,850 level. The first major resistance on the upside is near the $39,000 zone.
There is also a key bearish trend line forming with resistance near $39,000 on the hourly chart of the BTC/USD pair. If there is a clear move above the $39,000 resistance zone, the price might rise further.
More Losses in BTC?
If bitcoin fails to clear the $39,550 resistance zone, it could continue to move down. An immediate support on the downside is near the $38,400 zone.
The next major support is seen near the $38,000 level. The main support sits near the last swing low at $37,140. If there is a downside break below the $37,140 support, the price might gain bearish momentum. In the stated case, it could dive towards the $36,600 level or even $36,000.
3. Bitcoin (BTC) Will Benefit From War and Emerging Monetary Order, According to Credit Suisse Analyst:
A Credit Suisse investment strategist says Bitcoin (BTC) will likely benefit from the current geopolitical turmoil.
In a new analysis, Zoltan Pozsar says the world is witnessing a shift to a new monetary order centered around commodity-based currencies in the East.
The strategist thinks the new monetary order will weaken the Euro/USD system and cause inflation in the West.
“A crisis is unfolding. A crisis of commodities. Commodities are collateral, and collateral is money, and this crisis is about the rising allure of outside money over inside money.”
Pozsar compares Russian commodities to subprime collateralized debt obligations in 2008. He says the People’s Bank of China (PBoC) is the only bank that can provide a backstop for the crisis.
The strategist argues the PBoC has only two “geo-financial” options: print money or sell bonds to buy Russian commodities. Pozsar says both options would cause more inflation in the West.
However it unfolds, the strategist says it could benefit Bitcoin.
“This crisis is not like anything we have seen since President Nixon took the US dollar off gold in 1971 – the end of the era of commodity-based money. When this crisis (and war) is over, the US dollar should be much weaker and, on the flip side, the renminbi much stronger, backed by a basket of commodities.
From the Bretton Woods era backed by gold bullion to Bretton Woods II backed by inside money (Treasuries with un-hedgeable confiscation risks), to Bretton Woods III backed by outside money (gold bullion and other commodities). After this war is over, ‘money’ will never be the same again… and Bitcoin (if it still exists then) will probably benefit from all this.”
Crypto Trader Updates Outlook on Altcoins, Says He’s Not Bullish on Bitcoin (BTC) at Current Levels – Here’s Why
A leading crypto analyst is updating his outlook on the altcoin markets while analyzing the current price levels for Bitcoin (BTC).
In a new series of tweets, crypto trader Michaël van de Poppe tells his 575,000 followers that altcoins such as Chainlink (LINK) are maintaining higher time frame support against the US dollar (USD).
altcoin Ethereum (ETH), Van de Poppe predicts months of lateral price movements before the top smart contract platform can break to new highs. According to Van de Poppe, Ethereum’s price tag could be affected by inflation.
When it comes to leading crypto asset by market cap Bitcoin (BTC), Van de Poppe says he’s “not bullish” on BTC at its current levels. The trader thinks there is a high chance of Bitcoin taking fresh lows soon.
Bitcoin is trading for $39,179.40 at time of writing, approximately 14% below Van de Poppe’s $46,000 bull line.
4. Canadian Police Seize $28M in Bitcoin, Extradite Alleged Affiliate of Ransomware Gang:
A Canadian man accused of carrying out dozens of ransomware attacks in 2020 has been extradited to the United States, and more than $28 million in bitcoin (BTC) was seized at his home in connection with the case.
Sebastien Vachon-Desjardins, 34, was indicted in a federal court in Florida on charges of conspiracy to commit computer fraud and wire fraud, intentional damage to a protected computer, and extortion. A protected computer is a computer used exclusively by either the U.S. government or a financial institution.
Vachon-Desjardins – a former IT professional for the Canadian government – was arrested in Quebec in January. Royal Canadian Mounted Police (RCMP) seized 719 bitcoins (worth over $28 million at current prices) and $790,000 in Canadian currency from his home. Canadian media report, however, that Vachon-Desjardins told the court he’d actually stolen over 2,000 bitcoins over his ransomware career.
The arrest comes amid an international crackdown on ransomware. In November U.S. President Joe Biden promised to bring “the full strength of the federal government to disrupt malicious cyber activity” and, since then, several large-scale operations have brought down ransomware groups including Russia-based REvil.
5. FBI director: Russia overestimates its ability to bypass US sanctions using crypto:
Christopher Wray cited the FBI's recent work in seizing large amounts of crypto as evidence there were vulnerabilities in using digital assets to get around sanctions.
Christopher Wray, the director of the Federal Bureau of Investigation, said that fiat was a more likely avenue for Russia to explore in circumventing sanctions, given the United States’ ability to block efforts using crypto.
In a Thursday hearing of the Senate Select Committee on Intelligence, New Mexico Senator Martin Heinrich asked the FBI director if Russia might respond to the economic impact of the United States banning imports of the country’s oil and gas by using reserves of gold, China’s currency or cryptocurrency. Director Wray said the FBI and its partners had "built up significant expertise" on digital assets, citing the department’s recent work in seizing large amounts of tokens as evidence there were vulnerabilities in using crypto to get around sanctions.
The Russians' ability to circumvent the sanctions with cryptocurrency is probably highly overestimated on the part of maybe them and others,” said Wray. “We are, as a community and with our partners overseas, far more effective on that than I think that sometimes they appreciate and there's a lot of expertise in terms of tools and strategies to help block that kind of effort. Ultimately, what they really need to do is get access to some form of fiat currency, which becomes more challenging.”
Related: Experts reject concerns Russia will use crypto to bypass sanctions: ‘Totally unfounded’
Following Russia’s military actions on Feb. 24, the United States and governments across the European Union announced sanctions aimed at financially harming the country. Many agencies and departments, including the U.S. Financial Crimes Enforcement Network and European Commission, said they would be looking at the possibility of Russia using digital currency to evade sanctions. U.S. President Joe Biden also signed an executive order on Wednesday aimed at creating a regulatory framework for crypto that mentioned risks of circumventing sanctions.
6. Paxos secures approval from Singapore’s financial regulator
The Monetary Authority of Singapore, or MAS, has granted stablecoin issuer Paxos regulatory approval to offer crypto services to local companies.
In a Thursday announcement, Paxos said it had received a license from Singapore’s financial regulator allowing the firm to provide blockchain and crypto services under the country’s Payment Services Act. The stablecoin issuer said the regulatory approval would help support its partners in expanding services into Asia.
7. Estonian Prime Minister Calls for Restriction of Cryptocurrencies
The Prime Minister of Estonia has said cryptocurrencies must be restricted in order to address loopholes that may be used by sanctioned Russian entities to evade the punitive measures. In addition, the premier wants all Russian as well as Belarusian banks to be removed from the global payment network.
