It’s a Big Day ahead for Cryptos as U.S Congress Talks Cryptos and the Environment

There’s been plenty of regulatory and government chatter on cryptos in recent months. Late last year, a Stablecoins Committee Hearing looked into stablecoins, with stablecoiners receiving some tough questions.

The Stablecoins Committee Hearing looked into the risks associated with the likes of USD Coin (USDC). We have yet to hear of any action plans from Congress in response to the hearing.

House Committee on Energy & Commerce

Today at 1030am, EST, the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will hold a hearing titled“Cleaning up Cryptocurrency: The Energy Impacts of Blockchains”.

Today’s hearing is scheduled to address issues relating to cryptos, the environment, and energy.

According to subcommittee chairman Pallone’s briefing memorandum, a number of key issues that will likely be discussed include:

  • Proof-of-Work (PoW) crypto mining.
  • Energy consumption.
  • Carbon emissions.
  • Waste.
  • Cleaner alternatives.

When considering the stats that the briefing memorandum refers to, PoW protocol and Bitcoin (BTC) are in for a tough day ahead.

Other Considerations ahead of Today’s Hearing

Key PoW mining stats from the briefing memorandum include:

  • The estimated annual energy usage of the Bitcoin network alone grew from 77.78 Terawatt-hours (TWh) on 2nd January 2021 to more than 198 TWh on 26th November 2021.
  • Over the same period, the Ethereum (ETH) network’s annual energy usage grew from 14.81 TWh to more than 92 TWh.
  • A single ETH transaction added more than 90 pounds of CO2 to the atmosphere, while a single BTC transaction added more than 1,000 pounds.
  • The global 2021 CO2 emissions of ETH and BTC mining are equivalent to tailpipe emissions from more than 15.5m gasoline-powered cars on the road every year.

Other key stats that we have previously reported include:

  • According to Columbia Climate School, Bitcoin (BTC) is thought to consume 707KwH per transaction. In addition, there are also mining computers that heat up and need cooling.
  • The University of Cambridge estimated that Bitcoin (BTC) mining consumes 121.36 terawatt-hours (TWh) per year. Based on this estimate, if Bitcoin were a country, it would be a top 30 energy consumer.
  • It is estimated that Bitcoin (BTC) mining yields 22m to 22.9m metric tons of CO2 emissions each year.
  • In terms of global warming, Bitcoin (BTC) mining could push global warming above 2 degrees centigrade in less than 3-decades.

U.S – China Carbon Emission Goals

For the subcommittee, there are a number of reasons to make progress towards cleaner alternatives.

  • China banned Bitcoin mining in June 2021 as part of its goal to be carbon neutral by 2060.
  • Since China’s ban, the U.S has become the world’s largest Bitcoin mining nation, according to Cambridge Centre for Alternative Finance.
  • President Joe Biden announced a new target for the U.S “to achieve a 50-52% reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030”. Upon taking office, President Biden rejoined the Paris Agreement, aiming to tackle the climate crisis both domestically and abroad. The U.S has a goal of reaching net-zero emissions by 2050.

The EU Calls for a Ban on PoW Mining

If China’s 2021 ban on Bitcoin mining is not enough of an incentive for U.S lawmakers, the EU has also begun to talk of the adverse impacts of PoW mining on the environment.

Overnight, news hit the wires of the vice-chair of the European Securities and Markets Authority (ESMA) calling for a ban on PoW mining. The comments follow India Prime Minister Modi’s calls for a unified approach on cryptos at this week’s DAVOS 2022.

With the SEC-Ripple’s Lab case ongoing, regulatory scrutiny is unlikely to abate any time soon.

Regulatory Scrutiny to Intensify

On Wednesday, news had hit the wires of SEC Chair Gary Gensler warning of a crackdown on digital assets this year. The SEC Chair talked of more direct regulation of crypto trading platforms in the coming months. He added that the additional scrutiny is crucial to give crypto investors the levels of protection seen across other assets.

Economic Data from the Eurozone Deliver Mixed Results for the EUR

It was a busier day on the Eurozone economic calendar. Finalized December inflation figures for Eurozone and German wholesale inflation figures were in focus.

Eurozone Inflation

In December, the Eurozone’s annual rate of inflation picked up from 4.9% to 5.0%, which was in line with prelim figures.

Month-on-month, consumer prices increased by 0.4%. This was also in line with prelim figures. In November, consumer prices had also risen by 0.4%.

According to Eurostat,

  • A year earlier the Euro area’s annual rate of inflation was -0.3%.
  • The lowest annual rates of inflation were registered in Malta (2.6%) and Portugal (2.8%).
  • Estonia (12.0%) registered the highest annual rate of inflation, followed by Lithuania (10.7%).
  • The highest contribution to the annual euro area inflation rate came from energy (+2.46 percentage points), followed by services (+1.02 pp), non-energy industrial goods (+0.78 pp), and food, alcohol, & tobacco (+0.71 pp).

German Wholesale Inflation

In December, Germany’s annual wholesale rate of inflation accelerated from 19.2% to 24.2% versus a forecasted 19.4%.

Month-on-month, Germany’s PPI jumped by 5.0% versus a forecasted 0.8%. In November, the PPI rose by 0.8%.

According to Destatis,

  • Year-on-year, the increase was the highest ever.
  • Compared with December 2020, energy prices were up 69% and up by 15.7% compared with November 2021.
  • Strong price increases of natural gas (distribution) and electricity drove energy prices.
  • Excluding energy, the overall index was up 10.4% up on December 2020.
  • Prices of intermediate goods increased by 19.3%, while prices of non-durable consumer goods rose by 4.7% compared with December 2020.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat low $1.13456.

In response to Germany’s stats, the EUR rose to a post-stat and current day high $1.13690. Following the release of the Eurozone’s inflation numbers, however, the EUR fell to a post-stat and current-day low $1.13331.

At the time of writing, the EUR was down by 0.05% to $1.13372.

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Next Up

The ECB’s monetary policy meeting minutes will be in focus ahead of jobless claims and Philly FED Manufacturing numbers from the U.S.

From the minutes, the markets will be looking for any chatter on inflation and interest rates.

Miami and New York City Progress in Raising Funds through CityCoins

Earlier this year, the Mayors of Miami and New York City were in the crypto news. Miami City Mayor Suarez confirmed that he will receive a Bitcoin (BTC) salary.

In the first week of the year, New York City Mayor Adams also confirmed that he will take his first 3 pay checks in BTC. Both mayors had talked of crypto salaries during their respectively election campaigns.

Miami City to Pay BTC to Local Residents

Late last year, Miami City Mayor Suarez had already been in the crypto news, however. Bitcoin advocate Suarez announced an initiative to pay BTC to locals who create a digital wallets.

In June 2021, the City of Miami had launched its very own MiamiCoin (MIA), which became the first CityCoins to market.

CityCoins provides citizens a medium to generate crypto-based revenue. Powered by Stacks (STX), CityCoins enables smart contracts on the Bitcoin network. While most crypto protocols are a single token system, the CityCoins protocol allows for a multiple token systems. This feature allows users to generate tokens for each  individual city.

CityCoin miners receive CityCoins token rewards by depositing STX into smart contracts. 70% of all STX tokens deposited into the smart contract go to the stackers. The remaining 30% goes to City Wallets. City Wallets are considered a crypto equivalent of a city’s treasury. Mayors can exchange the accrued tokens for fiat to invest into the city. Alternatively, mayors can mine with the accrued STX tokens to earn Bitcoin.

MiamiCoin Market Cap hits $25m, with NewYorkCityCoin Hitting $30m

At the time of writing, MiamiCoin was ranked #4,002 on CoinMarketCap, with a market cap of $24.15m. For the City of Miami and its residents, as the value of MiamiCoin rises, the number of miners increases. The result is an increase in STX blocks, which leads to a larger crypto treasury chest for the city. Coin holders are then also rewarded Bitcoin.

In a nutshell, it is up to the people with vested interest in the City of Miami to mine. This then leads to a larger treasury chest to invest into the city.

Miami is not alone, however, with NewYork Coin (NYC Coin) also in circulation.

With regulatory activity on the rise at the turn of the year, CityCoins could have  a tough road ahead. Environmental concerns around Bitcoin could be a stumbling block. A number of governments have raised concerns over the impact of Bitcoin mining on the environment. China banned Bitcoin mining last summer as it looks to be carbon neutral by 2060.

Secret (SCRT) Draws in Big Investors, Raising $400m to Support Big Goals

While it’s been a bearish start to the year for Bitcoin (BTC) and the broader market, Secret (SCRT) has been on the move.

Having fallen back from a November high $11.08 to sub-$4.00 levels late last year, Secret has found strong support.

For the current month, Secret was up by 78% to a Wednesday closing $9.06. Earlier in the month, Secret had struck a new ATH $11.25 before easing back.

Tarantino’s Pulp Fiction NFTs and Privacy Key Drivers

At the turn of the year, there’s been no shortage of favorable news to support Secret’s current breakout.

Early this year, news hit the wires of Pulp Fiction’s Tarantino going ahead with the sale of 7 Pulp Fiction NFTs. The sale of the 7 NFTs, called “Secret NFTs” started on Monday and ends on 31st January.

The Secret’s NFT launch will have two components. Uncut scenes from the movie and secret content, only accessible by the buyer. A key attribute of the Secret (SCRT) is that users can build and use applications “that are both permissionless and privacy-preserving”. Secret (SCRT) therefore protects users and also secures applications. The goal is to allow users to control how their data is used and viewed.

With regulatory scrutiny also on the rise, Secret’s platform attributes are likely to provide strong demand in the year ahead.

Such has been investor interest that SCRT is currently ranked #79 on CoinMarketCap, with a market cap of $1,352m and a Total Value Locked (TVL) of $65.95m. Secret had only just entered the top 100 at the start of the year.

Secret Network Announces $400m in Ecosystem Funding

With SCRT having hit an ATH this month and bucking the trend across the broader crypto market, Secret Network delivered more good news this week.

Overnight, Secret Network announced $400m in ecosystem funding, with some big names loosening their purse strings. Marquee investors included HashKey, DeFinance Capital, CoinFund, and Alameda Research among others.

As part of the announcement, Secret revealed “a new $225m ecosystem fund targeted at expanding Secret Network’s application layer (NFTs and DeFi), network infrastructure, and tooling”. In addition, Secret announced a $175m accelerator pool. Funded in SCRT, the pool is there to “provide non-dilutive capital, grants, and ecosystem incentives to rapidly expand user adoption”.

Secret’s targets for the first half of this year include launching hundreds of new apps as well as the on-boarding hundreds of thousands of new users.

Secret (SCRT) Price Action

At the time of writing, down by 0.63% to $9.003. A move back through to $10.00 levels would give SCRT a run at 14th January’s $11.25 ATH. With the broader crypto market under pressure, we can expect plenty of resistance at $10.00, however. The day’s first major resistance level sits at $9.85.

A fall back to sub-$9.00 levels would bring this week’s low $8.37 into play before any recovery. The day’s first major support level sits at $8.32.

Bitcoin (BTC) Mining Comes under EU Scrutiny

It’s been a bearish turn of the year for Bitcoin (BTC) and the broader crypto market. Back in November, Bitcoin had struck a new ATH $68,979 before hitting reverse. An extended sell-off saw Bitcoin visit sub-$40,000 levels at the start of the year. Bitcoin had last visited sub-$40,000 back in September.

Regulatory Focus on Cryptos Intensifies

Market sentiment towards FED monetary policy has certainly contributed to the reversal. Regulatory chatter and activity have also been crypto market negative at the turn of the year, however.

Late last year, the Bank of England raised concerns over the crypto market and financial stability. The BoE also called for a global crypto regulatory framework. Earlier this year, the IMF raised similar concerns. Just this week, India’s Prime Minister Modi also called for a unified approach to cryptos at DAVOS 2022.

With cryptos back in focus, crypto mining has also drawn plenty of attention in recent weeks. Last summer, China banned Bitcoin mining as part of its goal to be carbon neutral by 2060. As a result of the ban, Bitcoin miners relocated to other crypto mining friendly nations that included the U.S and Kazakhstan.

According to Cambridge Centre for Alternative Finance, the U.S accounted for 35.4% of the global hashrate in August 2021. Before China’s ban on Bitcoin mining, the U.S had accounted for just 16.8% of global mining back in April 2021.

With the U.S having a goal of reaching net zero emissions by 2050, Bitcoin mining has come under scrutiny. Later today, a U.S Congress subcommittee hearing will look into cryptocurrencies, with mining likely to be a key area of focus.

EU Takes Aim at Crypto Miners

This week, world leaders are attending virtual DAVOS 2022. Among the top 10 global risks over the next 10-years are climate action failure, extreme weather, human environmental damage, and natural resource crisis.

Environmental activists and governments could argue that cryptos and crypto mining could contribute to all of these and possible more.

With plenty of focus on mining, the EU has also stepped forward, calling for a ban of Proof-of-Work (PoW) mining.

News hit the wires overnight of European Securities and Markets Authority (ESMA) vice-chair Erik Thedeen calling for the ban on PoW mining. The vice-chair reportedly spoke of the significant risks that PoW mining poses to the environment. He reportedly added that EU regulators should encourage the Proof-of-Stake protocol as it has “a significantly lower energy profile”.

Both Bitcoin and Ethereum (ETH) are currently PoW networks, though Ethereum 2.0 will be a shift to a PoS protocol.

With no reported plans of Bitcoin moving to a PoS protocol, the chatter on Bitcoin mining and the environment will likely intensify. Whether pressure from regulators forces a change to a PoS protocol remains to be seen. Many may argue, however, that this would be another example of influence from centralized power.

Economic Data Puts the EUR and the Greenback in Focus

Earlier in the Day:

It is a busy start to the day on the economic calendar this morning. The Japanese Yen and the Aussie Dollar were in focus in the early hours. Later this morning, the PBoC will also be in action.

For the Japanese Yen

In December, Japan’s trade deficit narrowed from ¥955.6bn to ¥582.4bn. Economists had forecast a narrowing to 784.1bn.

According to figures released by the  Ministry of Finance,

  • Year-on-year, exports rose by 17.5%, while imports were up by 41.1%.
  • Exports to China increased by 10.8%, with exports to the U.S up by 22.1%.
  • From China, imports rose by 20.5%, with imports from the U.S increasing by 39.6%.
  • Imports from Australia surged by 95.7% when compared with December 2020.

The Japanese Yen moved from ¥114.350 to ¥114.359 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.02% to ¥114.310 against the U.S Dollar.

For the Aussie Dollar

Employment figures were in focus this morning.

According to the ABS,

  • Employment increased by 64.8k in December, following a 366.1k jump in November.
  • Full employment rose by 41.5k after having risen by 128.3k in the previous month.
  • As a result, Australia’s unemployment rate fell from 4.6% to 4.2%. This was the lowest unemployment rate since August 2008.
  • The participation rate held steady at 66.1% in the month.

The Aussie Dollar moved from $0.72207 to $0.72267 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.24% to $0.7228.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.13% to $0.6775.

The Day Ahead

For the EUR

It’s a busier day ahead on the economic calendar. Finalized December inflation figures for the Eurozone and German wholesale inflation figures are due out later today. Expect both sets of numbers to draw interest as market jitters over inflation continue to drive the markets

On the monetary policy front, the ECB monetary policy meeting minutes are also due out and will be key. The markets will be looking for any chatter on inflation and interest rates.

At the time of writing, the EUR was up by 0.07% to $1.1351.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no major stats due out of the UK to provide the Pound with direction.

At the time of writing, the Pound was up by 0.05% to $1.3619.

Across the Pond

It’s a busier day ahead. Key stats include the weekly jobless claims and Philly FED Manufacturing Index numbers for January. Another rise in jobless claims could test support for riskier assets.

At the time of writing, the U.S Dollar Spot Index was up by 0.05% to 95.562.

For the Loonie

It’s a quiet day ahead, with no major stats due out of Canada to provide the Loonie with direction. The lack of stats will leave the Loonie in the hands of crude oil prices on the day.

At the time of writing, the Loonie was up by 0.09% to C$1.2504 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin (BTC) and the Broader Market Follows the U.S Equities into the Red

It was a bearish day for Bitcoin (BTC) and the broader crypto market on Wednesday.

Bitcoin fell by 1.65% to end the day at $41,676, with resistance at $42,500 pegging Bitcoin back on the day.

Elsewhere, Litecoin (LTC) slid by 3.77%, with Ethereum (ETH) ending the day down by 2.39%. Cardano (ADA) was amongst the biggest losers on the day, however, sliding by 8.29%.

Cryptos and Interconnectedness with the U.S Equity Markets

Movement across the crypto market was once more aligned with the U.S equity markets mid-week. Market angst over inflation and FED monetary policy continued to weigh on riskier assets.

The NASDAQ followed Tuesday’s 2.60% tumble with a 1.15% slide. Things were not much better for the Dow and the S&P500, which saw losses of 0.96% and 0.97% respectively.

For regulators and IMF, the recent trends have been a source of concern. Earlier this year, the IMF had raised concerns over the interconnectedness of the crypto and U.S equity markets. The IMF’s concerns were aligned with those of the Bank of England. Late last year, the BoE had called for a global economic framework to address risks to financial stability.

For the crypto market, increased regulatory chatter and activity has contributed to the bearish start to the year. Market sentiment towards FED monetary policy, which has weighed heavily on the NASDAQ, has also been key.

In spite of the bearish moves, the Bitcoin Fear & Greed Index has avoided a fall back to a current month low 10/100. At the time of writing, the Bitcoin Fear & Greed Index sat at 24/100. We’ve seen the index hover at current levels for a number of days. Regulatory chatter and any apprehension ahead of today’s U.S Congress subcommittee hearing on cryptocurrencies have failed to instill greater investor fear.

Fear And Greed Index LookIntoBitcoin - Google Chrome

For the Day Ahead

With market jitters over inflation likely to linger, economic data from the Eurozone and the U.S will draw interest later today.

Finalized Eurozone inflation and German wholesale inflation figures are due out from the Eurozone. From the U.S, jobless claims will also be key. Rising consumer prices and weaker labor market conditions would be a negative for riskier assets.

Following two days of heavy losses for the NASDAQ, however, dip buyers could deliver both the NASDAQ and cryptos with support.

Much will depend on updates from today’s U.S Congress subcommittee hearing. A key topic will likely be crypto mining and the impact on the environment. Bitcoin mining has had plenty of airtime in recent weeks…

At the time of writing, Bitcoin was up by 0.33% to $41,814. A break back through to $42,500 levels would bring $43,000 levels into play. Avoiding a fall back through today’s $41,798 pivot will be key, however. A pullback to sub-$41,500 levels would bring sub-$40,000 into play.

Looking at the U.S futures, the NASDAQ was up by just 26 points at the time of writing.

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European Equities: Eurozone Inflation and U.S Jobless Claims in Focus

Economic Calendar

Thursday, 20th January

German PPI (MoM) (Dec)

Eurozone Core CPI (YoY) (Dec) Final

Eurozone CPI (YoY) (Dec) Final

Eurozone CPI (MoM) (Dec) Final

The Majors

It was a bullish day for the European majors on Wednesday. The CAC40 rose by 0.55%, with the DAX and the EuroStoxx600 ending the day with gains of 0.24% and 0.23% respectively.

Economic data was on the lighter side on the day, with key stats limited to finalized inflation figures from Germany. The lack of stats left the majors under pressure, with market angst over FED monetary policy remaining a key driver.

The upside on the day came in spite of the U.S equity markets continuing their decline amidst rising U.S Treasury yields.

The Stats

In December, German consumer prices rose by 0.5%, which was in line with prelim figures. Consumer prices had fallen by 0.2% in the month of November.

According to Destatis,

  • In December, the annual rate of inflation picked up from 5.2% to 5.3%, which was in line with forecasts.
  • The annual average rate of inflation was 3.1% compared with 2020, which was also in line with forecasts.

Reasons for High Inflation Rate in 2021 on 2020

  • A temporary reduction of value added tax rates in the 2nd half of 2020 and a sharp decline in mineral oil product prices in the previous year reportedly had an upward effect.
  • More and more crisis-related effects, such as delivery bottlenecks and marked price increase at upstream stages in the economic process.

Prices of Energy Products up on an Annual Average in 2021

  • The prices of energy products were up by 10.4% in 2021 year-on-year.
  • In 2020, prices of energy products had fallen by 4.8%.

Other Contributory Factors

  • Food prices rose 3.2% in 2021 compared with 2020.
  • Prices of goods increased by 4.3%, while service prices increased by just 2.1%.

From the U.S

Stats were limited to housing sector numbers that had a muted impact on the majors.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Wednesday. Volkswagen rose by 0.62% to buck the trend. Continental and BMW fell by 1.51% and by 1.09% respectively, with Daimler ending the day down by 0.19%.

It was also a mixed day for the banks. Deutsche Bank fell by 1.19%, while Commerzbank ended the day up by 0.41%.

From the CAC, it was a bearish day for the banks. Soc Gen slid by 1.89%, with Credit Agricole and BNP Paribas seeing losses of 0.94% and 0.92% respectively.

The French auto sector had a bullish session, however. Stellantis NV and Renault ended the day up by 0.23% and 0.50% respectively.

Air France-KLM slid by 3.44%, with Airbus SE declining by 0.66%.

On the VIX Index

It was a second consecutive day in the green for the VIX on Wednesday.

Following an 18.76% surge on Tuesday, the VIX rose by 4.65% to end the day at 23.85.

The NASDAQ slid by 1.15%, with the Dow and the S&P500 seeing losses of 0.96% and 0.97% respectively.

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The Day Ahead

It’s a relatively busy day ahead on the Eurozone’s economic calendar. Finalized Eurozone inflation figures for December are due out along with German wholesale inflation figures. With inflation a key area of focus, expect the numbers to draw attention.

Later in the day, U.S weekly jobless claims and Philly FED Manufacturing numbers for January will also provide direction.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 42 points.

For a look at all of today’s economic events, check out our economic calendar.

German Inflation Figures for December Provides Little EUR Support

It was a quieter day on the Eurozone economic calendar. Finalized December inflation figures for Germany were in focus ahead of the European open.

In December, German consumer prices rose by 0.5%, which was in line with prelim figures. Consumer prices had fallen by 0.2% in the month of November.

According to Destatis,

  • In December, the annual rate of inflation picked up from 5.2% to 5.3%, which was in line with forecasts.
  • The annual average rate of inflation was 3.1% compared with 2020, which was also in line with forecasts.

Reasons for High Inflation Rate in 2021 on 2020

  • A temporary reduction of value added tax rates in the 2nd half of 2020 and a sharp decline in mineral oil product prices in the previous year reportedly had an upward effect.
  • More and more crisis-related effects, such as delivery bottlenecks and marked price increases at upstream stages in the economic process.

Prices of Energy Products up on an Annual Average in 2021

  • The prices of energy products were up by 10.4% in 2021 year-on-year.
  • In 2020, prices of energy products had fallen by 4.8%.

Other Contributory Factors

  • Food prices rose 3.2% in 2021 compared with 2020.
  • Prices of goods increased by 4.3%, while service prices increased by just 2.1%.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat and current day low $1.13190 before rising to a pre-stat high $1.13364.

In response to today’s stats, the EUR rose to a post-stat and current day high $1.13429 before falling to a post-stat low $1.13291.

At the time of writing, the EUR was up by 0.05% to $1.13323.

190122 EURUSD Hourly Chart

Next Up

Housing sector data from the U.S that should have a muted impact on the EUR. ECB member McCaul is scheduled to speak, however, which could draw some interest.

UFC Goes Crypto with MMA Heavyweight Champ to Take Bitcoin (BTC) Prize Purse

While governments around the world look to tighten their controls on cryptos, the crypto-sport relationship continues to grow.

Over the last few months, there has been plenty of crypto-sport-related news. Not only in relation to cryptos, but also NFTs and even the Metaverse.

Late last year, crypto exchange Crypto.com (CRO) announced a sponsorship deal with U.S female soccer team Angel City F.C. Shortly after, news hit the wires of Crypto.com buying Super Bowl LVI airtime.

With exchanges looking to build their brand names and attract consumers, there has also been news of sports stars entering the crypto space.

At the end of last year, we reported on leading NFL players taking Bitcoin (BTC) salaries or accepting cryptos for endorsements.

It hasn’t just been the NFL, however, with the NBA also having a strong link with the crypto space. Just last week, news hit the wires of Andre Iguodala announcing that he will take a portion of his annual salary in BTC. The 3-time NBA champion also announced that he will give $1m in BTC back to fans to make BTC more accessible.

With politicians also announcing plans to accept crypto salaries or contributions, we are likely to see the list of public figures accepting cryptos as salary surge in the months ahead.

UFC Joins the NFL, NBA, and Politicians

Overnight, news hit the wires of UFC heavyweight champion Francis Ngannou announcing that he will take half of his UFC270 prize purse in BTC.

According to the news, the MMA fighter is taking on Ciryl Gane on 23rd January. Ngannou has $750,000 in guaranteed prize money.

The heavyweight champion took to Twitter to announce his partnership with crypto wallet CashApp and his BTC plans.

Regulators Clamp Down on Crypto Ad Campaigns

While sports stars are announcing their partnerships with exchanges and BTC salary plans, regulators around the world have been clamping down on crypto exchange ad campaigns.

Just this week, news has hit the wires of Singapore, the UK, and Spain clamping down on crypto ads.

What this means for sports stars, their relationships with crypto platforms and the crypto platforms remains to be seen.

Governments and regulators may look to pour cold water on the growing partnership. When considering central bank concerns over cryptos and financial stability, sports have got too big a following for regulators to just stand back.

Crypto.com’s 30-second ad during Super Bowl LVI is just one example of the consumer reach an ad can have. Super Bowl LV attracted 96.4 million viewers and this was the lowest since 2007. A 30-second ad at Super Bowl LVI reportedly costs $6.5m.

Georgian Citizens Forced to Stop Crypto Mining amidst Ongoing Energy Crisis

Crypto mining is back in the news this week, as the crypto market readies for a U.S Congress subcommittee hearing on cryptos tomorrow.

While regulators across the world are ramping up activity in the crypto space, concerns over the impact of crypto mining on the environment has also been on the rise.

Chatter on crypto mining had abated following China’s Bitcoin (BTC) mining ban last summer. At the turn of the year, however, regulatory chatter has surged.

Tomorrow’s U.S Congress subcommittee hearing on cryptos will likely focus on mining and the environment and regulatory aspects of cryptos. As of August 2021, the U.S was the largest Bitcoin mining nation, according to Cambridge Centre for Alternative Finance.

Russia and the CIS Bitcoin Hashrate Distribution

The world’s 2nd largest Bitcoin mining nation was Kazakhstan, which accounted for 18.10% of the Bitcoin hashrate. Other nations forming the Commonwealth of Independent States, accounted for very little of the remaining hashrate. Other than the Russian Federation, which accounted for 11.23% of the global hashrate, the remaining independent states barely featured. In fact, Georgia and the Ukraine were the most prominent, with hashrates of 0.18% and 0.13% respectively.

With U.S Congress holding a subcommittee hearing on cryptocurrencies tomorrow, Bitcoin mining remain in the spotlight.

The U.S government has a goal of being emissions free by 2050. An outright ban on Bitcoin mining is a possible outcome to tomorrow’s hearing. Such an outcome would force miners to relocate to other crypto friendly jurisdictions. Some consider Russia and the CIS as viable alternatives.

At the start of the year, another CIS member state, Kosovo, was forced to impose crypto mining ban as a result of an ongoing energy crisis.

Just last week, news hit the wires of Binance (BNB) beefing up its Russia and CIS team. The strategic move by Binance suggests that Russia and the CIS could be the next crypto growth story. With Kazakhstan the world’s 2nd largest Bitcoin mining nation, miners may also look to other CIS member states when considering their proximity to China.

Georgians Forced to Take an Oath Against Crypto Mining

This week, news hit the wires of Georgian residents being forced to “pledge a holy oath that they will not mine cryptocurrency”. According to the report, crypto mining has been on the rise as a result of a slump in tourism. With certain parts of Georgia enjoying free electricity, the threat of an increase in crypto mining has caused the government to take action. Similarly to Kosovo, the government forced pledges in a bid to address energy shortages.

Intel Enters the Bitcoin (BTC) Mining Space amidst Rising Concerns over Mining and the Environment

Crypto mining, natural resources, and the environment are hot topics for governments and the crypto market at present.

China’s ban on Bitcoin (BTC) mining put the spotlight on crypto mining and the environment. While governments have taken greater interest, manufacturers of crypto mining equipment have yet respond to the increased level of scrutiny, until now…

Crypto Mining and the Environment

Last summer, China’s outright ban on crypto mining was in support of the government’s carbon neutral goal by 2060.

Amidst an ongoing energy crisis in Kosovo, the Kosovo government was forced to impose a blanket crypto mining ban at the start of the year. The government imposed the ban to curb energy consumption.

In terms of Bitcoin hashrates, Kosovo only accounted for 0.01% of Bitcoin’s global hashrate in August 2021. According to Cambridge Centre for Alternative Finance, the United States was the largest Bitcoin mining nation, accounting for 35.4% of the total Bitcoin mining hashrate as at August 2021.

The U.S had accounted for just 16.85% of the total hashrate in April 2021. Mainland China had been the largest crypto mining nation before the summer 2021 ban.

For governments with carbon neutral aspirations, the impact of Bitcoin mining on the environment is significant. Such is the extent of energy consumption that, if Bitcoin were a country, it would be a top 30 energy consumer.

Considering energy consumption and climate impact, some key mining stats are worth considering:

  • According to Columbia Climate School, Bitcoin is thought to consume 707KwH per transaction. In addition, there are also mining computers that heat up and need cooling.
  • The University of Cambridge estimated that Bitcoin mining consumes 121.36 terawatt-hours (TWh) per year.
  • According to estimates, Bitcoin mining yields 22m to 22.9m metric tons of CO2 emissions each year.
  • In terms of global warming, Bitcoin mining could push global warming above 2 degrees centigrade in less than 3-decades.

U.S Government Climate Goals

It therefore comes as little surprise that Bitcoin mining has appeared on the radar of the U.S government. Optically, inaction as the world’s largest Bitcoin mining nation would go against the U.S emissions goals.

In April 2022, President Biden announced a new target for the U.S “to achieve a 50-52% reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030”. Upon taking office, President Biden rejoined the Paris Agreement, aiming to tackle the climate crisis both domestically and abroad. The U.S has a goal of reaching net zero emissions by 2050.

With Biden’s new U.S target, tomorrow’s U.S Congress subcommittee hearing on cryptos will draw plenty of interest.

When considering China’s ban and the increased interest in crypto mining, more energy efficient mining equipment would be a next step in addressing environmental concerns.

Intel Looks to Deliver a Major Breakthrough in Bitcoin Mining

Overnight, news hit the wires of Intel (INTC) entering the Bitcoin mining space. According to the news, Intel plans to introduce a new “Ultra-Low-Voltage-Energy-Efficient Bitcoin Mining Asic”. Reportedly called Bonanza Mine, Intel plans to introduce the mining Asic next month. The Bonanza Mine is said to “reduce overall power consumption by approximately 15%”.

A 15% reduction in power consumption is a step in the right direction. Intel’s move into the Bitcoin mining space will also likely force other mining equipment manufacturers to look at improving power consumption inefficiencies.

Such an outcome would be positive, not just for Bitcoin miners, but also for the environment.

UK Inflation and Central Bank Chatter Puts the Pound back in the Spotlight

Earlier in the Day:

It is a relatively busy start to the day on the economic calendar this morning. The Kiwi Dollar and the Aussie Dollar were in action in the early hours.

For the Kiwi Dollar

Electronic card retail sales increased by a modest 0.4% in December, following a 9.6% jump in November.

According to NZ Stats,

  • Easing COVID-19 restrictions and the Christmas holidays supported another increase in card spending.
  • While total retail card spending rose by just 0.4%, spending on services jumped by 16.6%.
  • Within the retail industries, spending on fuel led the way, rising by 4.2%.
  • Spending on durables and consumables bucked the trend, however, falling by 7.2% and by 0.1% respectively.
  • The sharp fall in durable spending was attributed to higher spending in November that had coincided with Black Friday sales.

The Kiwi Dollar moved from $0.67695 to $0.67668 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.06% to $0.6766.

For the Aussie Dollar

The Westpac Consumer Sentiment Index fell by 2% to 102.2 in January. In December, the Index had fallen by 1.0% to 104.3. Economists had forecast a 0.3% decline.

According to the latest Westpac Report,

  • The 2% decline, attributed to the Omicron strain, was modest when compared with the Delta strain driven 5.2% slide.

Looking at the sub-components:

  • Family finances vs a year ago increased by 7.5% to 95.6, while family finances next 12-months fell by 2.8% to 108.1. In spite of the decline the sub-index held above a long run average of 107.5.
  • Economic conditions next 12-months fell by 9.6% to 94.8, with economic conditions next 5-years falling 6.1% to 103.6. Both continued to sit above their long run averages of 91.1 and 91.9 respectively.
  • In spite of the negative sentiment, the time to buy a major household item rose by 2.8% to 108.9. (Long run average: 126.5).
  • The time to buy a dwelling sub-index rose by 6.3% to 87.0, while the Unemployment Expectations Index increased 8.2% to 112.7.

The Aussie Dollar moved from $0.71871 to $0.71850 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.10% to $0.7178.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.08% to ¥114.700 against the U.S Dollar.

The Day Ahead

For the EUR

It’s a quieter day ahead on the economic calendar. Finalized December inflation figures for Germany are due out later today. Expect any revisions to prelim figures to influence. On the monetary policy front, ECB McCaul is scheduled to speak.

At the time of writing, the EUR was up by 0.01% to $1.1326.

For the Pound

It’s another particularly busy day ahead on the economic calendar. December inflation figures are due out today. Persistent inflationary pressures could force the BoE to signal a 2nd rate hike in the coming months. The stats precede scheduled speeches from BoE Governor Bailey and MPC member Cunliffe who are due to speak late in the day.

At the time of writing, the Pound was down by 0.05% to $1.3589.

Across the Pond

Housing sector figures for December are due out. We don’t expect the numbers to influence, however.

On Tuesday, the U.S Dollar Spot Index rose by 0.50% to end the day at 95.732.

For the Loonie

Inflation figures for December are due out later today. Expect plenty of interest in the numbers.

The IEA’s monthly report and crude oil inventories will also draw interest, however.

At the time of writing, the Loonie was up by 0.06% to C$1.2507 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Crypto Advertising Just One Area of Focus for Regulators

Regulators have been back in action this week, with crypto exchanges once more a key area of focus.

As exchanges look to ramp up marketing campaigns to lure investors, regulators have been looking to stem the tide. A number of exchanges have been particularly active in ramping up marketing campaigns, drawing the attention of regulators.

Crypto Exchanges and Crypto Ad Clampdown

In the 1st week of the year, news had hit the wires of the UK’s Advertising Standards Authority (ASA) banning two Crypto.com (CRO) ads.

The Singapore government also hit crypto exchanges with a ban on advertising. According to news at the start of the week, Singapore’s MAS imposed a blanket ban on digital payment token providers (DPTs) from marketing their services in public areas. In Singapore, public areas include social media platforms and print media as well as on public transport and transportation venues.

Following Singapore’s ban, the UK government announced plans to crackdown on “misleading” crypto ads. The latest move is reportedly to align crypto exchange advertising with the advertising requirements for mutual funds and other financial products.

Following Singapore’s ban and the UK government’s announcement, news hit the wires of Spain’s CNMV rolling out new crypto ad rules, reportedly effective on 17th February.

For both the UK and Spain, requiring strict rules in the advertising of riskier assets is aligned with the advertising of other financial products. This is unlikely to be considered punitive and should be seen as a natural progression for the crypto markets. Advertising laws for mutual funds and other financial products have continued to evolve over the years.

For the crypto markets, however, the greater concern will likely be over the marked increase in regulatory activity.

Ad Clampdown Coincides with Calls for a Global Regulatory Framework

Late last year, the Bank of England had called for a global economic framework to address risks to financial stability. Earlier this year, the IMF echoed the Bank of England’s calls, talking of interconnectedness between the crypto and U.S equity markets.

At the start of the week, we also reported on news from DAVOS 2022. India’s prime minister Modi called for “global cooperation and a common approach towards addressing emerging challenges posed by cryptocurrencies”.

The latest clamp down and focus on advertising campaigns is likely stemming from calls by regulators to protect investors.

For crypto exchanges and the crypto markets, there will also be a likely increase in uncertainty to test support for the crypto majors.

Bitcoin (BTC) Price Action

At the time of writing, Bitcoin (BTC) was up by 0.15% to $42,435. Market reaction to the latest spate of regulatory activity has been relatively muted on Bitcoin. For the current week, Bitcoin is down by just 1.69%. Year-to-date, however, Bitcoin is down 8.28%, with crypto market sentiment towards FED monetary policy and regulatory activity weighing.

BTCUSD 190122 Daily

The losses are modest, however, when compared with the slump of 2018. Tomorrow’s US Congress subcommittee hearing on cryptos may have a greater impact, however…

European Equities: A Quiet Economic Calendar Leaves Crude Oil and FED Policy in Focus

Economic Calendar

Wednesday, 19th January

German CPI (MoM) (Dec) Final

Thursday, 20th January

German PPI (MoM) (Dec)

Eurozone Core CPI (YoY) (Dec) Final

Eurozone CPI (YoY) (Dec) Final

Eurozone CPI (MoM) (Dec) Final

The Majors

It was a particularly bearish day for the European majors on Tuesday. The DAX slid by 1.01%, with the CAC40 and the EuroStoxx600 ending the day with losses of 0.94% and by 0.97% respectively.

Economic data took a back seat on Tuesday, with rising U.S Treasury yields weighing heavily on riskier assets. Market sentiment towards FED monetary policy and the path of interest rates drove yields higher on the day. A sharp increase in crude oil prices added to the market angst on the day. Tech stocks took a big hit as the U.S markets reopened following Monday’s holiday.

The Stats

ZEW Economic Sentiment figures for Germany and the Eurozone were in focus early in the European session.

In January, Germany’s ZEW Economic Sentiment Index jumped from 29.9 to 51.7. Economists had forecast an increase to 32.0. The Eurozone Economic Sentiment Index also impressed, rising from 26.8 to 49.4. Economists had forecast a rise to 29.2.

For Germany, the ZEW Current Conditions Index disappointed, however, falling from -7.4 to -10.2. Economists had forecast a more modest decline to -8.5.

From the U.S

NY Empire State Manufacturing Index slid from 31.9 to -0.70 in January. Economists had forecast a decline to 25.70.

According to the January Survey,

  • New orders took a hit, with the new orders index falling 32 points to -5.0.
  • The shipments index fell to 1.0, while the delivery times index held steady at 21.6, pointing to a continued lengthening amidst ongoing supply chain disruptions.
  • On the inflation front, the prices paid index slipped by 4 points to 76.7, with the prices received index down 8 points to 37.1. Both remained elevated and pointed to “ongoing substantial increases in both input and selling prices”.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Daimler rose by 0.51% to buck the trend. f Continental slid by 1.83%, however, with BMW and Volkswagen ending the day down by 0.08% and by 1.07% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank declined by 0.77% and by 0.69% respectively.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 0.44%, with Soc Gen and BNP Paribas seeing losses of 0.09 and 0.06% respectively.

The French auto sector also had a bearish session. Stellantis NV and Renault ended the day down by 0.54% and by 0.79% respectively.

Air France-KLM and Airbus SE fell by 1.09% and by 0.75% respectively.

On the VIX Index

It was back into the green for the VIX on Tuesday.

Reversing a 5.51% fall from Friday, the VIX surged by 18.76% to end the day at 22.79.

The NASDAQ tumbled by 2.60%, with the Dow and the S&P500 seeing losses of 1.51% and 1.84% respectively.

VIX 190122 Daily Chart

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar. Finalized German inflation figures for December are due out going into the European open. Barring any marked revisions from prelim, however, we don’t expect the numbers to influence.

From the U.S, housing sector data for December, due out late in the European session, should also have a muted impact on the majors.

The markets will be tracking U.S Treasury yields and crude oil prices for direction.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 52 points.

For a look at all of today’s economic events, check out our economic calendar.

CoinEx Lists BabyDoge as Meme Coin Interest Holds Firm

Meme coins have become part and parcel of the crypto world. Such has been the market interest that two particularly well-known meme coins had stellar years last year.

Dogecoin (DOGE) surged by 3,600% in 2021. Another favorite of Tesla’s Elon Musk, Shiba Inu (SHIB) is also another crypto market performer. In the 4th quarter of last year alone, SHIB surged by a whopping 3,626%.

Both meme coins have had the undivided attention of Tesla’s Elon Musk. Just last week, news hit the wires of Tesla accepting DOGE as payment for Tesla merch, driving demand for DOGE in the week.

Such has been the level of investor interest in meme coins that DOGE is ranked an impressive 11th on CoinMarketCap, with a market cap of $21,974bn at the time of writing. SHIB isn’t far behind, ranked 14th, with a market cap of $15,169m.

It comes as a little surprise, therefore, for exchanges to list new meme coins when considering investor interest.

What is Baby Doge Coin (BABYDOGE)?

Baby Doge Coin (BABYDOGE) is an offspring of DOGE, created by the online community of the DOGE. Similar to Dogecoin, Baby Doge Coin is considered to be a lighthearted meme coin, with a mission to save dogs.

Hyper-deflationary, with static reflection that rewards holders” are key attributes. The platform automatically redistributes 5% of each transaction fee to BABYDOGE holders.

The 5% comes out of a 10% fee charged for each and every exchange of BABYDOGE. Essentially, keepers get rewarded, while sellers become losers.

As is the case with SHIB and its support for Shiba Inu dogs, BABYDOGE has plans to contribute $100,000 to dog charities.

CoinEX Hong Kong Lists BABYDOGE

Today, news hit the wires of HK crypto exchange CoinEX listing BABYDOGE. CoinEX supports DOGE and SHIB trading. According to the announcement, the platform already enables BABYDOGE deposits and withdrawals.

BABYDOGE’s launch and inclusion may give investors that missed out on DOGE and SHIB a chance at a new meme breakout investment.

At the time of writing, BABYDOGE ranked #2,834 on CoinMarketCap, with a market cap of $1,416m. BABYDOGE launched in 2021.

EUR Brushes Aside Spike in German and Eurozone ZEW Economic Sentiment Figures

It was a busier day on the Eurozone economic calendar. ZEW Economic Sentiment figures for Germany and the Eurozone were in focus early in the European session.

In January, Germany’s ZEW Economic Sentiment Index jumped from 29.9 to 51.7. Economists had forecast an increase to 32.0. The Eurozone Economic Sentiment Index also impressed, rising from 26.8 to 49.4. Economists had forecast a rise to 29.2.

For Germany, the ZEW Current Conditions Index disappointed, however, falling from -7.4 to -10.2. Economists had forecast a more modest decline to -8.5.

In spite of the improved sentiment, the EUR failed to revisit highs from earlier in the day.

Market Impact

Ahead of today’s stats, the EUR had risen to a pre-stat and current day high $1.14214 before sliding to a pre-stat and current day low $1.13851.

In response to today’s stats, the EUR rose to a post-stat high $1.13995 before falling to a post-stat low $1.13921.

At the time of writing, the EUR was down by 0.09% to $1.13957. A break back through to $1.14 levels would support a run at this morning’s high $1.14214. A spike in U.S Treasury yields, however, has driven demand for the safe havens, weighing on the European majors.

The DAX was down by 1.36%, at the time of writing, with the CAC40 down by 1.24%.

180122 EURUSD Hourly Chart

Next Up

NY Empire State Manufacturing numbers from the U.S. We don’t expect the figures to have a material impact on market risk sentiment on the day, however.

A Former Thailand SEC Chief Questions Government Plans on Crypto Tax

Government and regulatory chatter on cryptos continue to flood the crypto news wires at the turn of the year.

Crypto exchange activity has also been on the rise, as adoption surges and NFTs and the Metaverse draw greater investor interest.

Overnight, news hit the wires of Binance (BNB) entering into an agreement with Thai company Gulf Energy Development PLC to launch a digital asset exchange. The latest move comes in spite of a pending criminal complaint against Binance.

Thailand and the Crypto Market

A number of nations within the region have taken a more crypto friendly stance. These include Japan and South Korea, where crypto adoption is high.

Thailand is also considered crypto friendly, with the Bank of Thailand (BoT) holding back from imposing an outright ban on cryptos. Recently, however, bans on meme coins and NFTs have been rolled out.

Additionally, the government has just announced plans of a 15% capital gains tax on crypto trading profits. The capital gains tax reportedly relates to investors and mining operators but not to digital asset exchanges. It is also worth noting that the BoT is making strong progress towards a central bank digital currency (CBDC).

According to CBDC Tracker, the Bank of Thailand is in the proof-of-concept stage for its Ithanon-LionRock CBDC. Other central banks in the proof-of-concept stage include the Hong Kong’s HKMA, the Bank of Japan, the Reserve Bank of Australia, and the Bank of Korea.

Divided Views on Crypto Taxation

While some will view the 15% capital gains tax as crypto friendly, not all agree. News hit the wires this week of former Thailand SEC Deputy Secretary General Tipsuda Thavaramara disagreeing with the crypto tax plans. The former Deputy Secretary General noted that countries including Australia, Singapore, and some EU member states have removed VAT on trading and don’t treat cryptos as a product.

Late last year, news had hit the wires of Thailand’s finance officers planning to create a regulatory framework to minimize the risks of cryptos to the financial network and investors. The BoT’s concerns are aligned with those of the Bank of England and the IMF.

According to the late December report, the Bank of Thailand will introduce crypto regulations soon.

Thailand and Crypto Adoption and Mining

According to the University of Cambridge, Thailand had accounted for 0.99% of Bitcoin’s global hashrate as at August 2021.

More significantly, crypto adoption in Thailand has been on the rise. According to Chainalysis, worldwide adoption jumped over 880% in 2021. Thailand ranked 12th out of 154 in crypto adoption in 2021, one place ahead of China.

Regulatory Chatter Weighs on the Major Cryptos with the Exception of Cardano (ADA)

It was a bearish session for Bitcoin (BTC) and the broader crypto market on Monday. Chatter from DAVOS 2022 over the need for unified action on cryptocurrencies likely contributed to the broad-based pullback.

Amongst the first speakers at this year’s virtual event was Indian Prime Minister Modi. We reported this morning of the Prime Minister’s call for unified global action on cryptocurrencies. At the turn of the year, news had hit the wires of the Indian government creating a FINTECH division to keep up with cryptos.

Others have also made calls for a global regulatory framework, which would stamp out regulatory arbitrage.

Monday’s Crypto Market Movers

The total crypto market cap briefly fell back to sub-$2,000bn levels before ending the day at $2,005bn.

Chainlink (LINK) led the way down, sliding by 6.40%. Things were not much better for Binance Coin (BNB) (-4.69%), Crypto.com Coin (CRO) (-3.93%), and Ethereum (ETH) (-4.15%).

For CRO the losses could have been far more significant. On Monday, news had hit the wires of Crypto.com suspending withdrawals. The decision to suspend was in response to user claims of stolen funds.

Bitcoin saw a relatively modest 2.03% loss on the day. In spite of the Bitcoin pullback and negative sentiment, the Bitcoin Fear & Greed Index currently sits at 24/100 and in the red. While up from 10/100 on 8th January, a level in the red and close to or at zero indicates investor fear of further price declines.

Bitcoin Fear & Greed Index b

Cardano (ADA) Bucks the Trend

Bucking the trend on the day were Cardano (ADA) and Litecoin (LTC). While Litecoin rose by 3.17%, ADA surged by 13.53% to end the day at $1.603.

For Cardano, there’s been plenty of news chatter and activity to support the latest breakout. On Monday, news of the first Metaverse project launching on the Cardano blockchain delivered the upside.

For the Day Ahead

It’s been a mixed start to the morning for the broader crypto market. Chatter from DAVOS 2022 will likely continue to influence, particularly if more world leaders call for unified action on cryptos. We may also see some market jitters ahead of Thursday’s U.S Congress subcommittee hearing on cryptocurrencies.

From the U.S, there are no major stats to influence market sentiment towards FED monetary policy. With the prospect of 4 rate hikes this year, however, it’s still negative for riskier assets. Support could come from the U.S equity markets, however.

At the time of writing, Bitcoin (BTC) was up by 0.34% to $42,368. We continue to see a move back through to $43,500 and last week’s high $44,443 key to any run at this month’s high $47,979.

A broad-based pullback and a Bitcoin fall back to sub-$41,500 levels, however, would bring sub-$40,000 back into play. This week, much will likely depend on the outcome to Thursday’s subcommittee hearing and any concrete plans from DAVOS 2022.

BTCUSD 180122 Daily Chart

India Joins Calls for Global Action on Cryptos at Davos

DAVOS 2022 got underway on Monday, after having been postponed from December due to COVID-19. As a result of COVID-19, this year’s event is virtual and will end on 21st January. World leaders delivering special addresses include the heads of states of Australia, China, Germany, India, Indonesia, Israel, Japan, and Nigeria. President of the EU Commission, Ursula von der Leyen and U.S Secretary of the Treasury Janet Yellen are also scheduled to speak.

United Call for Global Regulatory Oversight of Cryptos

For the crypto markets, the global presence at DAVOS 2022 provides world leaders an ideal platform to discuss cryptos and the regulatory road ahead.

Late last year, the Bank of England raised concerns over the risk that cryptos pose to UK financial stability. The UK’s central bank also talked of the need for a global regulatory framework for cryptos. Earlier this month, the IMF joined the Bank of England, raising concerns over the interconnectedness of cryptos and the U.S equity markets. Aligned with the UK’s central bank, the IMF also called for a global regulatory framework.

In recent months, there has been a marked increase regulatory chatter and activity. This month, news hit the wires of India’s central bank creating a new FINTECH division to step up its oversight of cryptos. In addition, however, the government is also looking to monitor the NFT market and new token launches. The move followed news of the government searching a number of crypto exchanges on the suspicion of tax evasion.

Indian Prime Minister Modi Joins Call for Action

Speaking on day 1 of DAVOS, Indian Prime Minister Modi reportedly called for “global cooperation and a common approach towards addressing emerging challenges posed by cryptocurrencies”.

With the Indian government cracking down on cryptos, the presence of other key world leaders could test crypto market sentiment. China’s Premier Xi Jining would certainly be aligned with a global crackdown.

Interestingly, the DAVOS agenda has climate action failure, extreme weather, human environmental damage, and natural resources crisis listed amongst the top 10 global risks over the next 10-years. Governments could argue that cryptos and crypto mining contribute to all of these and possible more of the top 10 risks.

Later this week, a U.S Congress subcommittee hearing is taking place to look at cryptocurrencies and the environment. Last summer, China had banned Bitcoin (BTC) mining as part of its goal of becoming carbon neutral by 2060.

Bitcoin (BTC) Price Action

It was a bearish day for the crypto market on Monday. Bitcoin fell by 2.03% to end the day at $42,224. With the U.S equity markets closed on Monday, persistent regulatory chatter likely contributed to the decline.

Year-to-date, Bitcoin was down by 8.60% to Monday’s close. More significantly, however, Bitcoin was down by 39% from November’s ATH $68,979.

With the U.S markets reopening today, we can expect the U.S equity markets to have some influence on the crypto majors. Chatter from Davos, however, and regulatory activity ahead of Thursday’s subcommittee hearing will also need considering.

At the time of writing, Bitcoin was up by 0.17% to $42,298. A move back through $43,500 levels would bring last week’s high $44,443 into play. A fall back to sub-$41,500 levels, however could bring sub-$40,000 back into play.

BTCUSD 180122 Daily Chart