News Updates September 22, 2022
1. Amount of ‘HODLed’ Bitcoin hits a 5-year high amid heavy market volatility
Investors are adopting different strategies to manage the ongoing Bitcoin (BTC) price correction amid expectations that the asset will rally again in the future. In this case, most Bitcoin investors seem to be adopting the ‘HODL’ investment strategy.
In particular, as of September 21, the amount of Bitcoin HODLed hit a five-year record high at 7,495,059.588 BTC, worth approximately $143.74 billion. The last record five-year-high was registered on October 19, 2020, according to Glassnode data.
It is worth pointing out that the amount under HOLD sometimes entails Bitcoin in addresses whose owners have lost their access keys. Such Bitcoin is classified under lost coins.
Notably, the amount in HODL partly reflects the market’s current state, characterized by high volatility. In this case, increased addresses holding Bitcoin points to a negative outlook for the market since investors are not eager to sell their coins.
Furthermore, the holding will likely result in fewer Bitcoins circulating with liquidity impacted while limiting the chances of whales dumping in the market and influencing prices.
As more investors shy away from selling their Bitcoin, the flagship cryptocurrency is struggling to avoid further correction below the $20,000 level. In this case, investors who believe in cryptocurrencies for the long term tend to hold onto their assets in anticipation of a market rally.
Additionally, the depressed Bitcoin prices have offered an opportunity for investors to accumulate the asset cheaply and HODL while anticipating a future rally.
2. Bitcoin Taps $18,100, Why This Is Dangerous For The Market?
* BTC price tabs $18,100 for the second time as price respect weekly downtrend.
* Price continues to trade below 50 and 200 Exponential Moving Average (EMA) on the daily timeframe.
* BTC price bounced on the four-hourly chart after a bullish divergence appeared.
The price of Bitcoin (BTC) has had a rough week against tether (USDT) as the price plummeted following the Federal Open Market Committee news (FOMC). Following the news that the Federal Reserve raised its target interest rate by 75 bps, the price of Bitcoin (BTC) fell from $19,700 to a region of $18,100. (Data from Binance)
The price of BTC continues to struggle to keep its head afloat after seeing the weekly candle closing bearish, with the new week looking more bearish ahead of the expected FOMC meeting.
BTC price tried showing some relief bounce ahead of the new week as price moved to a region of $19,500, but this bounce was cut short as the news of an increased rate hike harmed the price seeing the price of BTC drop to previous all-time high causing worry as this has been a strong support zone for the price of BTC.
If the price of BTC continues to tap this region of $18,100, it will weaken the support, and we would likely revisit lower support areas of $17,500-$16,000, acting as high-demand zones.
For BTC’s price to restore its bullish move, the price needs to break and hold above $24,000 as the price has continued to respect the downtrend resistance on the weekly chart preventing the price of BTC from trending higher since falling from its all-time high.
The price of BTC is currently faced with resistance to breaking above $19,500; If the price of BTC fails to break and hold above this support zone, we could see the price going lower to its $18,100 support and lower if this support fails to hold off sell orders.
On the daily timeframe, the price of BTC is currently trading at $18,900 below the 50 and 200 Exponential Moving Average (EMA), acting as resistance for BTC price. The price of $20,800 and $28,000 corresponds to the resistance at 50 and 200 EMA for the price of BTC. The price of BTC needs to reclaim 50 EMA for a chance to trend to $22,000.
3. Israeli Exchange Bits of Gold Becomes First Crypto Firm to Receive Capital Markets License
The firm will now be able to work with local bank and financial institutions.
Israel's top markets regulator has granted local cryptocurrency exchange Bits of Gold one of its first licenses for exchanges that target crypto financial-services providers.
With the license from the Capital Markets Authority, Bits of Gold will be able to work with local banks and financial institutions, according to a press release shared with CoinDesk. Regulators in the country have been for some time attempting to clear the way for reluctant local banks to start interacting with crypto.
"With the license and the Bank of Israel recent orders we will be able to resolve most of the bank issues," the company said in a press statement.
The markets regulator already granted Israel's first crypto license to another private company called Hybrid Bridge Holdings (HBH) in early September. CEO Giyora Ran later told local news outlet Globes that HBH is building a crypto custody and exchange platform, but it's unclear if it has a working product yet.
The markets regulator already granted Israel's first crypto license to another private company called Hybrid Bridge Holdings (HBH) in early September. CEO Giyora Ran later told local news outlet Globes that HBH is building a crypto custody and exchange platform, but it's unclear if it has a working product yet.
4. UK Introduces Law to Seize, Freeze and Recover Crypto
The Economic Crime and Corporate Transparency bill is meant to build on an earlier law that helped regulators place sanctions on Russia.
The U.K. introduced a bill to make it easier for law enforcement agencies to seize, freeze and recover crypto assets when used for criminal activities such as money laundering, drugs and cybercrime, the government said Thursday.
The 250-page Economic Crime and Corporate Transparency bill, first promised in May, was introduced by the Home Office, Department for Business, Energy & Industrial Strategy, Serious Fraud Office and Treasury and covers more than just crypto. It had its first reading in the House of Commons on Thursday, with the second reading scheduled for Oct. 13.
"Domestic and international criminals have for years laundered the proceeds of their crime and corruption by abusing U.K. company structures, and are increasingly using cryptocurrencies," Graeme Biggar, director general of the National Crime Agency, said in the statement. "These reforms – long awaited and much welcomed – will help us crack down on both."
Even without the bill, the authorities have not been powerless. London's Metropolitan Police seized a record 180 million British pounds (US$200 million) of crypto linked to international money laundering in July of last year following a 114 million-pound haul in June, the BBC reported.
5. Estonia Grants First Crypto License to LastBit's Striga
The crypto banking company is first to jump over new anti-money laundering hurdles which significantly toughen Estonia's legal regime.
Crypto banking company Striga is the first firm to be awarded a license under a new Estonian legal regime that was significantly toughened earlier this year.
Striga was given the authorization to operate on Sept. 20, the Estonian financial intelligence unit (FIU), an anti-money laundering enforcer, said in a statement dated Wednesday. The company, part of Bitcoin Lightning startup LastBit, is now registered under an anti-money laundering law which seeks to clamp down on a previously liberal regime for regulating crypto firms.
The head of the FIU, Matis Mäeker, told CoinDesk in May that he wanted to professionalize the sector via the new regime. Many of the hundreds of companies registered in the country had no proper business plan or nexus in the country, Mäeker said.
Striga Chief Executive Officer Bernardo Magnani said at the time that the approval process had been “challenging, to say the least … [F]or us it was hard to predict how it was going to look.”
Existing firms also had to renew their licenses under the new Estonian law, which took effect in March. The challenge of complying with the new hurdles, which include requirements to hold minimum levels of capital and to have dedicated compliance officers, has led the number of registered firms to plummet from 381 in December to 177 as of Wednesday.
“Regulation in this space is just starting,” Magnani said during a Thursday telephone interview, with the European Union just now finalizing its landmark Markets in Crypto Assets Regulation (MiCA), and more potentially still to come. “We believe that being at the front of that will allow us to be very competitive.”
6. India considering GST on crypto transactions amid evaluation of sector’s legality
The Indian government is working on levying an 18% to 28% GST tax on crypto as they work on determining the asset's legal status in the country.
The Indian government is working on implementing a goods and services (GST) tax on crypto transactions as legwork for determining the legality of the sector is underway, according to a Sept. 19 Livemint report.
The GST tax will become an indirect tax regime on crypto assets that will act as a check on any revenue loss to the exchequer due to the lack of clarity surrounding the assets.
According to the report, the tax rate could fall between 18% to 28%.
At this stage, India’s finance ministry is working on determining the applicability of GST for crypto assets and has yet to decide whether they are declared as a good or service as the purchase is levied on services, Livemint’s two sources reported anonymously.
WazirX’s Vice President Rajgopal Menon said that based on the details available at the moment, “the GST will only be applicable on margin or service fees, and not on the entire value of the asset.”
It is also noted that the government is also looking into treating specific transactions, such as mining or airdropped crypto tokens.
The legality of crypto assets faces uncertainty in India
Meanwhile, the Indian government is also finalizing its stance on the legitimacy of crypto to submit its response to the Financial Action Task Force (FATF) “mutual evaluation” between February and March 2023.
India is currently not FATF-compliant. FATF requires countries to have a clear stance on legalizing, partially banning, or outright banning crypto assets.
The Department of Economic Affairs announced that it is compiling a consultation paper on virtual digital assets (VDAs) to assess the legality of VDAs. The consultation process began on Sept. 17.
The Financial Stability and Development Council (FSDC), chaired by Indian Finance Minister Nirmala Sitharaman, discussed the need to clarify the status of VDAs in India, along with a message to fast-track the initiative.
Sitharaman also called on the International Monetary Fund (IMF) to lead in developing a regulatory framework for cryptocurrency and ensuring a globally unified approach to the sector.
7. Bank of Russia, Finance Ministry Agree on Crypto Mining Regulation, Law Expected Soon
Major government institutions in Moscow, the central bank and the finance ministry, have aligned their positions on the regulation of cryptocurrency mining in the Russian Federation. The respective bill will soon be filed with the State Duma, a high-ranking member of the house unveiled.
Financial Authorities Reach Consensus on How to Regulate Mining of Digital Coins in Russia
The Central Bank of Russia (CBR) and the Ministry of Finance (Minfin) have adopted a joint position on the regulation of crypto mining. The bitcoin-related activity has been expanding in the energy-rich nation, both as a profitable industry and as a source of additional income for many Russians.
Anatoly Aksakov, chair of the parliamentary Financial Market Committee, announced during the Kazan Digital Week forum that draft legislation introducing rules for the sector will soon be submitted to the lower house of Russian parliament, the State Duma. Quoted by RBC Crypto, he said:
The Russian lawmaker also gave his own take on the matter. Aksakov believes that cryptocurrency mining should be allowed only in regions with abundant energy resources and prohibited in those that experience shortages.
Earlier in September, Prime Minister Mikhail Mishustin asked the CBR, Minfin, Rosfinmonitoring, Russia’s financial watchdog, the Federal Tax Service, and the Federal Security Service to elaborate a common position on draft federal laws regulating the issuance and circulation of digital currencies, including their mining and use in international settlements.
The head of the Russian government also ordered the Ministry of Finance, with the participation of the Bank of Russia, to submit consensus proposals for the development of the market for digital financial assets (DFAs), including the application of decentralized technologies, by Dec. 1.
The two regulators will have to update the Strategy for the Development of the Russian Financial Market Until 2030. The document should be revised taking into account President Vladimir Putin’s instructions and the current geopolitical situation, Mishustin stated on Sept. 13. He also emphasized that under the current conditions, the employment of DFAs will contribute to ensuring uninterrupted payments for imports and exports.
Russian authorities have been discussing the regulation of cryptocurrencies and related activities for quite some time, with the CBR and Minfin taking almost opposite positions until recently. While the central bank proposed a blanket ban, the department has favored legalization. However, the two regulators recently agreed that Russia would need cross-border crypto payments to deal with the pressure exerted by Western restrictions on its foreign trade.
8. Indonesia Has Global Plans for Local Crypto Tokens
If the Indonesian government is right, locally issued crypto tokens could one day join palm oil or coal among the southeast Asian country's major export commodities.
While Jakarta takes an active interest in regulating the crypto industry, President Joko Widodo’s administration apparently sees merit in helping the local token economy grow – hoping to even benefit from taxing local digital assets that make it onto global trading platforms.
Indonesia is looking forward to having a lot of commodities to be exported. And we can grab this opportunity to make crypto as one of the potential products for exports,” Jerry Sambuaga, Indonesia’s vice minister of trade, told CoinDesk in an interview.
For more local coverage of Indonesia, visit the new CoinDesk Indonesia website.
In Indonesia, the use of crypto as a currency for payments is forbidden under both local regulations and Islamic law – which applies to roughly 87% of the country’s 273 million people. Crypto assets, however, are classified as commodities in the country, lumped into the same category as things like grains or gold
And thanks to a growing national love of speculative trading online, crypto is wildly popular in Indonesia, making it one of the most dynamic markets in the world.
According to Indonesia’s trade ministry, the country has more than 14 million crypto users, compared with nine million stock traders. The number of crypto traders as of March surged 300% from 2020, driven in part by a large unbanked population. Although the crypto bear market has slashed volumes traded globally, and the Southeast Asian nation was no exception, Indonesians have already traded 212 trillion rupiah ($14.3 billion) worth of crypto in the first half of 2022, trade ministry data reviewed by CoinDesk shows.
