News Updates October 14, 2022
1. A Huge Glut of Bitcoin Mining Rigs Is Sitting Unused in Boxes
The situation is further disrupting the economics of a sector already hit by low crypto prices and high energy costs. Hundreds of thousands of brand new mining rigs that could be generating bitcoin (BTC) have never been used, further skewing the economics of cryptocurrency mining, a sector that has been hit hard by sinking prices for bitcoin and other tokens and by high energy costs.
Last year, miners struggled to buy enough rigs. Manufacturers couldn’t fulfill orders fast enough. Now, Matt Schultz, executive chairman of bitcoin miner CleanSpark (CLSK), figures 250,000 to 500,000 mining rigs are still sealed up in boxes in the U.S. alone, based on his conversations with analysts. Ethan Vera, chief operating officer of mining services firm Luxor Technologies, put the number at 276,000 worldwide in September.
2. Crypto Trader Maps Path Forward for Bitcoin and Ethereum, Warns One Catalyst Could Trigger Quick Crash in ETH.
A popular crypto trader is warning Bitcoin (BTC) and Ethereum (ETH) could experience new lows in the near future.
Pseudonymous trader Altcoin Sherpa tells his 184,300 Twitter followers that the trends for the king crypto are not favorable to a bull run.
“Ugly stuff overall but these $18,000 lows are up. I do believe the $17,000s are eventually going to come but I don’t know what it’s going to look like.”
Later, Sherpa updates his analysis after the markets rallied and Bitcoin traded in excess of $19,000 at the close of the day.
“There have been some bullish candle closes on the 1D with the following day having nasty reversals. It’s gonna be too early to say if this is the short-term bottom or not. Best to be scalping or not in the market at all in my opinion.”
3. Bitcoin Price Analysis: Rally Tests 19958 - 15 October 2022
Bitcoin (BTC/USD) sought to extend its rally early in the Asian session as the pair encountered some additional upward pressure following its recent sharp pullback to the 18131 level, a move that tested September lows and represented the weakest print since June. Traders lifted BTC/USD to the 19954.14 area during the rebound higher, representing a test of the 78.6% retracement of the recent depreciating range from 20455.79 to 18131. Stops were recently elected below the 18855 area during the sharp move lower as selling pressure intensified below the 20715.34 area, representing the 61.8% retracement of the appreciating range from 17934.26 to 25214.57. Below current price activity, traders continue to anticipate large Stops below the 17803, 17701, 16966, and 16503 areas, significant technical levels related to historical upside pressure around the 3858 and 9819 areas. Additional significant technical areas on the downside include the 16990.14, 14500.15, and 10432.73 areas.
Upside retracement levels related to recent depreciating ranges include the 20476, 21024, 21703, and 21805 areas. Following the recent sharp decline, the 20433 area has emerged as an area of consistent technical resistance and is technically related to selling pressure that commenced around the all-time high of 69000. Above recent price activity, upside retracement levels in the depreciating range from 31549.21 to 17567.45 include the 26208, 28249, and 28557 areas. Additional upside price objectives and areas of potential selling pressure include the 25552, 26323, 26411, 26901, 27126, 27455, 28426, and 29669 areas. Traders are observing that the 50-bar MA (4-hourly) is bearishly indicating below the 200-bar MA (4-hourly) and below the 100-bar MA (4-hourly). Also, the 50-bar MA (hourly) is bearishly indicating below the 200-bar MA (hourly) and above the 100-bar MA (hourly).
Price activity is nearest the 200-bar MA (4-hourly) at 19723.27 and the 200-bar MA (Hourly) at 19471.37.
4. Mastercard Focusing on 5 Key Areas to Turn Crypto Into 'an Everyday Way to Pay'.
Mastercard has outlined five key crypto areas it is working on in order to “turn cryptocurrencies into an everyday way to pay.” A Mastercard executive opined: “Someday soon, the ability to own and spend a digital currency could be as seamless as making a contactless card payment.”
Mastercard Focusing on 5 Major Areas Covering Crypto, Metaverse, and NFTs
Mastercard highlighted on Wednesday five different areas it is working on in order to “turn cryptocurrencies into an everyday way to pay.”
Raj Dhamodharan, executive vice president of Digital Asset and Blockchain Products & Digital Partnerships at Mastercard, explained: “Digital assets like cryptocurrencies and central bank digital currencies [CBDCs] have the potential to transform the financial system’s infrastructure.” He added that non-fungible tokens (NFTs), blockchain gaming, and metaverse experiences “could change how consumers shop and communicate.”
The executive opined:
Someday soon, the ability to own and spend a digital currency could be as seamless as making a contactless card payment.
Dhamodharan proceeded to outline five key areas that Mastercard is working on to make this happen. The first area is crypto cards. He detailed that Mastercard already announced dozens of new crypto card programs globally this year. For example, in the U.S., the payments giant worked with Gemini on a credit card that pays rewards in cryptocurrencies. In Argentina, the company launched a prepaid card with Binance. In Europe, Mastercard recently announced the world’s first physical debit card that can be customized to include a customer’s NFT avatar.
The second area is services for crypto. Noting that “Mastercard is a provider of cybersecurity, digital ID, advisory and open banking services to tens of thousands of financial institutions,” Dhamodharan said the company is going to use the same tools “to provide more support to crypto players and issuers.” Mastercard has expanded its consulting work to include a dedicated crypto practice and it completed the purchase of Ciphertrace last year. The company will soon launch a new crypto monitoring product called Crypto Secure.
The third area is payments. “We’ve partnered with a handful of top-tier crypto-focused companies — including Paxos, Circle, Evolve and Uphold — to develop ways for people to quickly convert their crypto to fiat to make payments. This work will support current and future crypto card partnerships,” the executive detailed.
Noting that the fourth area focuses on crypto on the Mastercard networks, Dhamodharan emphasized:
An important way to expand choice for people is to bring certain Mastercard-approved digital assets onto our networks, a plan we announced last year that continues to move forward.
The fifth area concerns the metaverse and non-fungible tokens (NFTs). Mastercard is working to grow its partnerships to support NFTs and the metaverse, Dhamodharan explained. For example, Coinbase users can now pay for NFTs with Mastercard.
In conclusion, the Mastercard executive noted that the payments giant already operates “a trusted global network that enables payments with a single tap or click.” He added, “That’s what the crypto economy needs to support the next million users — or the next billion,” elaborating.
5. Gensler supports granting CFTC more power over spot markets.
The Commodity Futures Trading Commission just gained a powerful ally in its push for authority over crypto spot markets.
Speaking at an event at Georgetown University, Securites and Exchange Commission Chair Gary Gensler endorsed the idea of Congress granting more direct authority over certain tokens to the U.S. commodities regulator, which he used to chair.
"I think the CFTC could well have greater authorities. They currently do not have direct regulatory authorities over the underlying non-security tokens,” Gensler told an audience for Georgetown University's Financial Markets Quality Conference in Washington.
The CFTC itself has pushed for direct authority over digital assets that the U.S. classifies as commodities. Those currently consist of bitcoin and ether, the two largest cryptocurrencies by market capitalization, though Gensler suggested last month that the latter could be a security.
In remarks today he added that, "you can count on the fingers of a hand or two," the projects that don't fall under the SEC's jurisdiction.
Gensler's support for broadening the CFTC's authority follows a recommendation from the Financial Stability Oversight Council, a super committee of U.S. regulators, which also made the recommendation in a unanimous vote. Gensler sits on that panel.
6. UK Wants to Make It Easier to Seize Crypto in Terrorism Cases
The government wants to mirror planned changes to the Economic Crime and Transparency bill to enable authorities to swiftly seize crypto assets linked to terrorist activities.
The U.K. government wants law enforcement agencies to be able to easily seize crypto assets used for funding terrorism.
The Home Office Department, which is the government arm responsible for immigration and crime, wants to mirror planned amendments to the Economic Crime and Corporate Transparency bill – that will make it easier for authorities to seize crypto involved in crime – in the U.K. Terrorism Act 2000 and the Anti-Terrorism Crime and Security Act 2001.
“This is to ensure that our law enforcement agencies, including counter-terrorism policing, have all the necessary powers to effectively seize, freeze and forfeit crypto assets that could be or have been used for terrorist purposes," a spokesperson for the Home Office said in an email to CoinDesk.
The Economic Crime and Transparency bill was introduced last month and targets the use of crypto for criminal activities including avoiding sanctions such as those placed on Russia over the war in Ukraine. Mirroring these measures in the country's counter-terrorism rules gives authorities the power to freeze assets in cases like the arrest of U.K. national Hisham Chaudhary who was found guilty of using bitcoin to help fund the Islamic State.
"Crypto assets are increasingly being used for malign and terrorist purposes and we intend to crack down on this and we'll be bringing forward a government amendment to mirror the changes in part four of this bill into counterterrorism legislation," said Suella Braverman, secretary of state for the Home Department, at the second reading of the economic crime bill on Thursday.
While planning a crackdown on crypto used for illicit activities, the U.K. has also introduced bills to attract more crypto businesses to the country. The Financial Services and Markets bill, which will give regulators in the country more powers to regulate crypto, is currently being discussed in Parliament. The Electronic Trade Bill that could see trade documents stored on the blockchain was approved by the upper house of Parliament on Wednesday.
