Russia Plans To Ban Crypto Mining

The Bank of Russia has just released a report outlining its position on cryptocurrencies. Put simply, Russia wants to push cryptos out of the country.

No Mining, No Transactions Inside the Country

The Bank of Russia believes that cryptocurrencies pose significant risks to the well-being of Russian citizens and the stability of the financial system. In addition, the Bank of Russia highlights its role in illegal activity.

Put simply, the Bank is concerned that the additional development of crypto markets will hurt the sovereignty of its monetary policy. Interestingly, the Bank says that developed countries which have reserve currencies can afford such risks, so they choose the path of regulation.

The Bank wants to add penalties for using cryptos as a means of payment inside Russia, ban crypto exchanges and P2P platforms, and ban crypto investments for financial firms.

Importantly, the Bank of Russia does not propose banning crypto for Russian citizens, so they will be able to use foreign exchanges to purchase cryptocurrencies.

Another important thing is that the Bank of Russia wants to ban crypto mining due to high energy usage and increased demand for crypto infrastructure, which may be used to bypass other crypto bans.

A similar idea (on proof-of-work mining) has been recently voiced in the EU, although it should be noted that the Bank of Russia’s proposal has a much bigger chance to become law.

What This Means for Crypto Markets?

According to the Bank of Russia, the country accounted for 11.2% of the global hashrate in August 2021. Its share in the global hashrate was rising rapidly, as it was just 6.9% at the beginning of 2021. In August 2021, Russia was behind the U.S. (35.4%) and Kazakhstan (18.1%).

It should be noted that crypto markets have been able to deal with the ban on crypto mining in China. However, crypto miners may soon find themselves in a “nowhere to run” situation as the number of countries with cheap electricity and sufficient technical development is limited. If Russia bans crypto mining and something happens in Kazakhstan, which has recently suffered from unrest, miners may find themselves stuck in the U.S.

It is not clear whether the news will have an immediate impact on Bitcoin and other leading cryptocurrencies like Ethereum, Cardano or Solana. The good news is that the Bank Of Russia did not propose to ban cryptos for Russian citizens, so there is no risk of forced sales, which could have put pressure on some coins.

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 is 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 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.

LunarCrush Poll Shows That Users Want Crypto to Replace Banks

A survey by LunarCrush has revealed that many users are willing to trade their bank accounts for crypto. The survey asked users whether crypto could replace their bank account. The majority was a yes, with 74.71% open to that idea in 24 hours. 

Crypto Enthusiasts Dominated LunarCrush Poll

However, the platform didn’t provide any extra details about the poll, especially in terms of how many people voted. So, it’s hard to tell how representative this poll is of the overall population. Also, the fact that most of the respondents to the poll are crypto enthusiasts means that the results will reflect support for crypto.

Regardless, the polls show the growing interest in Bitcoin, Ethereum, and other digital assets. In a BlockFi survey last year, crypto was a popular gift idea for several Americans, especially the millennials.

In recent years, the crypto industry, especially the DeFi sector, has positioned itself as an alternative for traditional financial institutions.

By offering similar products as traditional institutions but with higher returns, many people have embraced it. The general belief is that they can get better services through this space.

Risks Associated With Crypto Puts Many Away

While this is true to an extent, traditional financial institutions still represent the best option for many people. Beyond the volatility of these assets, the associated security risks discourage many people. 

In 2021, over $14 billion worth of crypto assets were lost to crypto crimes. The DeFi sector accounted for a major part of these losses.

The trend has continued into the new year, with crypto hacks already resulting in millions in losses. For instance, around $15 million worth of assets were stolen from the Crypto.com exchange, but the firm has denied this vehemently.

Though these security issues discourage some investors, it hasn’t stopped others. A number of traditional financial institutions are already entering the crypto industry as regulations permit. 

The DeFi platform, Aave, recently launched Aave Arc, a permissioned DeFi platform for financial institutions. Several regulated and licensed financial institutions have already signed on to it, including Switzerland-based Seba Bank. Thus, a future where crypto and bank coexist is very much possible.

Philippines’ UnionBank Opts Metaco and IBM for Crypto Safekeeping

The Union Bank of the Philippines, a pro-crypto bank, has chosen Metaco and IBM to provide orchestration for cryptocurrency storage solutions. Announced Thursday, Union Bank will deploy crypto management services on IBM Cloud.

“It’s a way to future-proof our banking business,” Cathy Casas, head of the bank’s blockchain, said in an interview with Bloomberg.

The bank will use Metaco’s Harmonize service, a crypto orchestration system. By doing so, UnionBank can improve the insurability of assets with certified physical controls for managing and migrating keys.

“We have the passion for meaningful and sustainable reinvention. We value our strategic partners, like Metaco, and collaborate with them in an alliance that is meaningful in pursuit of a common vision,” UnionBank Senior Executive Vice President Henry Aguda said in the release.

The partnership with UnionBank follows Metaco’s recent opening of Asia Pacific headquarters in Singapore.

Pro-Crypto Moves

The UnionBank debuted its crypto custody services in August 2021, stating that the bank is in “full compliance” with the central bank of the Philippines, in offering this service.

The bank has been exploring crypto-friendly options ever since it installed the first two-way bitcoin ATM, at its main bank branch in early 2019, mainly to address remittance service demand.

The UnionBank has even issued its own stablecoin – PHX – pegged to the Philipino peso and backed by UnionBank reserves. PHX is similar to the US dollar-pegged Tether or USDT.

The stablecoin is available to all UnionBank account holders and can be purchased through debits to account holders.

Crypto Custody Services vs. Wallets

Put simply, custody services are safekeeping solutions for cryptocurrencies. On the other hand, wallets, though hot and cold wallets address safety concerns, are third parties offering storage and safety for digital tokens.

Importantly, crypto custody services are primarily intended for institutional investors and for those who hold large amounts of Bitcoin or Ethereum, or other digital assets. But wallets are for all crypto buyers, sellers, traders, and investors.

Having said that, Metaco services enable institutions to manage not only crypto custody and trading but also smart contract management and decentralized finance (DeFi). Some of Metaco’s crypto custody clients include Swiss banks BBVA and GazpromBank.

“[Clients] can leverage the existing stack, existing run capabilities to manage Metaco vaults directly from existing infrastructure. And we have a number of other similar deals in the pipeline, leveraging our combined capabilities,” Seamus Donoghue, Metaco’s VP of business development said in a CoinDesk interview.

Multichain Protocol Loses Over $3 Million in Multiple Hacks

Hacks are something everybody has to consider when entering the crypto world, especially when it comes to smart contracts.

The cross-chain protocol announced last Monday to users that six tokens had critical vulnerability, including WETH, PERI, OMT, WBNB, MATIC, and AVAX. The team commented that users need to revoke the approval of any of the six tokens. The next day over $1 million was stolen.

A day later, on January 19, Tal Be’ery, the co-founder of the ZenGo wallet announced on his twitter account that the Multichain losses rose to $3 million as mentioned below.

In the crypto world, the hacks haven’t disappeared, last month the Centralized exchange BitMart lost around $200 million worth of crypto, and also the Celsius Network about $54 million.

What Is Multichain?

Multichain, formerly known as Anyswap, is a cross-chain router protocol, founded in July 2020. It allows users to swap tokens between different blockchains using a bridge.

The protocol supports 30 different chains and over 1,389 different tokens according to their official website. It has $9.43 billion Total Value Locked (TVL) and over $4 billion of volume in the last seven days.

The cross-chain protocol uses a governance token called MULTI, and it allows holders of the token to vote and participate in the decisions of Multichain’s ecosystem.

Is the Hack Situation Under Control?

At the moment one whitehat hacker returned 259 ETH as Multichain’s official twitter account commented as you can see below:

The Multichain team has warned over and over about the six compromised tokens on their protocol. Also the team has been taking actions along the way like monitoring and reaching the affected users, making announcements, updates, and alerts banners on social channels.

It appears Multichain is a bit relieved due to the recovery of some of its funds, but are all the funds going to be recovered? Let’s hope so.

 

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.

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.

BTCUSD 200122

BabyDoge Adds 13% to its Value in 24 Hours Following CoinEx Listing

BabyDoge Coin has more holders than Shiba Inu despite SHIB being the second-largest meme coin in terms of market cap.

BabyDoge Now Has More Than 1.2 Million Holders

BabyDoge has rallied by more than 13% over the past 24 hours, making it one of the top-performing cryptocurrencies in the market at the moment.

At press time, BabyDoge is trading at $0.000000006132. The rally comes as the meme coin was listed on the CoinEx cryptocurrency exchange yesterday. The BABYDOGE/USDT pair is now live on CoinEx, with deposit and withdrawal features also available.

This latest development came on the same day that the number of wallets holding BabyDoge surpassed that of Shiba Inu. Yesterday, the total number of wallets holding Shiba Inu topped 1.1 million.

However, BabyDoge has more holders. According to the data revealed by WhaleStats, 1,275,995 wallets now hold BabyDoge. WhaleStats added that the 1000 BNB wallets are holding 989,582,594,495,517 BabyDoge tokens (worth around $5,027,713).

BabyDoge has been recording positive milestones since the start of the month. Last week, BabyDoge flipped Ethereum to become the most traded cryptocurrency by Binance Smart Chain whales.

BABYDOGE Could Rally Higher Soon

The BABYDOGE/USDT daily technical chart shows that the cryptocurrency has been performing excellently over the past few days. The technical indicators are positive, pointing to a positive trend in its performance.

BABYDOGE’s MACD line is above the neutral zone. Source: Coinmarketcap / TradingView

BABYDOGE’s MACD line has been above the neutral zone since the start of the year, indicating a strong bullish performance. The 14-day RSI of 71 shows that BABYDOGE is in the overbought region.

If the positive momentum is maintained, BabyDoge could rally past the $0.0000000075 resistance level in the coming hours. In the event of an extended rally, BabyDoge could target the $0.0000000090 level before the end of the week.

Bitcoin Takes a Hit as Crypto Market Records $193 Million in Liquidations

More than 70,000 traders were hit with liquidations over the past 24 hours as the broader cryptocurrency market sustained losses.

The Crypto Market Loses 2.4% of its Value in 24 Hours

The recent data obtained from Coinglass has revealed that more than $193 million worth of liquidations was recorded in the cryptocurrency market over the past 24 hours.

Over the last one hour, more than $7 million worth of liquidations took place in the market. The liquidations have resulted in the total cryptocurrency market cap dropping below the $2 trillion mark a few hours ago.

Bitcoin accounted for most of the losses, with $11.47 million worth of BTC liquidated over the past 24 hours. Ethereum, Cardano, Fantom, and Cosmos complete the top five cryptocurrencies with the highest liquidation.

Bitcoin has struggled below the $45k resistance level over the past few weeks. At press time, BTC is trading at $41,788, up by less than 1% over the past 24 hours.

Fed Rate Hike the Likely Catalyst Behind Market Liquidation

The United States Federal Reserve is expected to announce more significant rate hikes over the coming months. This has resulted in a stronger dollar over the past few days, ultimately affecting the performance of the cryptocurrency market.

According to Coinglass, Binance accounted for most of the liquidations. The cryptocurrency exchange recorded more than $80 million worth of liquidations over the past 24 hours. It is followed by OKEx, with $49 million in liquidations during that period.

Coinglass added that more than 70,000 traders were liquidated over the last 24 hours. The largest single liquidation order happened on Okex, BTC-USDT-SWAP (a total of $3.81M).

If the cryptocurrency market continues to underperform, Bitcoin could lose the $40k support level over the coming hours or days.

Play-To-Earn Game Warena Has Officially Launched

It seems a new era of gaming is coming, and it is called “play-to-earn”. After having a successful Beta phase of 15,000 players in a four-day period of Warena, the initial phase of Warena game has officially deployed.

Warena is a play-to-earn game built in the Binance Smart Chain and will be released in two phases, the first phase of the game called “Survival”, was launched today, a 2D game survival mode in a post-apocalyptic world, and the second phase called “Metaverse” will come in Q2 this year as a 3D game.

In October 2021, Warena raised $1.5 million during a funding round from big companies in the blockchain ecosystem such as Genesis Builders, DAOMaker, Momentum 6, Master Ventures, Animoca, Clovers Ventures, and others.

About Warena

The play-to-earn game starts its first phase in the year 2129, where technology is really advanced but is World War 3 because a virus spread and most of humanity became zombies. Players will choose to be humans or robotic warriors to fight against the zombies.

The Warena project is a combination of software game companies such as d2mstudio, and co-led by the Genesis Builders Fund, according to Warena’s official GitBook.

One of the most anticipated features will be available during the second phase of the game, where players will interact and battle other “Metaverses” players that are built on other blockchains like, for example, Axie Infinity in the Ethereum blockchain.

How Do You Earn Tokens in Warena?

There are two tokens you can earn in the game: $WARE, which is the main currency of the game, and $RENA.

You can earn $WARE in the daily quest that is granted for all players, passing successful missions in the adventure gameplay, achieving one-time milestones, being in the top 100 players list in the weekly rank challenge, and renting warriors. On rare occasions, you will earn $RENA instead of $WARE by achieving missions.

The token $WARE is used to purchase things like mystery boxes, improving your warriors, to rent a warrior. On the other hand, $RENA can be used for staking and earning more tokens.

Both tokens $WARE and $RENA are also available in Binance Smart Chain’s decentralized exchange PancakeSwap.

As the Beta phase was successful, probably the first phase of Warena will be a success too, as an innovative play-to-earn game, let’s see if it can reach the top list of the most played games in the near future.

Over 64% Canadians Desire To Be Paid in Cryptocurrency: Survey

The discussion of cryptocurrency’s mainstream adoption has been going on forever and the only way to turn it into reality is by finding the easiest mass influential method.

Salary in Bitcoin?

That is the demand of Canadians at the moment. A survey of 1000 Canadians brought to light the demand and current use of cryptocurrency in the country and what they expect from the future.

Presently crypto payments aren’t accepted by every business in the country.

Although some retailers do accept crypto currently, it is yet to be accepted conventionally. And the process would have to start with none other than the king coin, Bitcoin.

Of the surveyed individuals, about 81% of them had used Bitcoin at some point in their life. Following by a gap of 33% is Ethereum which holds about a 48% usage domination.

Other altcoins used by the focus group included Dogecoin which was used by 28% of people, followed by Litecoin and Cardano at 18%

And their usage comes from the fact that 2021 had crypto hyped the most ever as over 58% of the users jumped into this space less than a year ago. Only 4% of the 1000 individuals were truly dedicated users as they had been using crypto for more than 5 years.

The duration of crypto being used | Source: Capterra

Alas, most of those who entered the crypto space did not join with the intention of truly utilizing the strengths of this technology. About 58% of respondents said that their motivation was to make profits through cryptocurrency.

However, some 26% of them truly looked forward to escaping the clutches of the regular banking system, and being paid in crypto would certainly enable them to do so.

Reasons for why cryptocurrency | Source: Capterra

This particular reason has been driving not just Canadians but also people from other countries to be paid in crypto.

Earlier last year Australian companies too began paying a portion of their employees’ wage in crypto. And the year before New Zealand made it legal for salaries to be given using digital currencies.

But This Is a Matter of Concern…

While 64% of the respondents refrained from using crypto due to a lack of knowledge, another 44% feared the end of cryptocurrencies’ demand in the future.

Reasons for why not cryptocurrency | Source: Capterra

Although another reason why being paid in cryptocurrencies such as Bitcoin and Ethereum would be risky is the rampant volatility of the market.
Within the span of just the last 3 months, Bitcoin shot up by 65% to touch $67,500 and then dropped back to $41.9k as of press time.

Bitcoin and Ethereum’s volatility – Source: FXEMPIRE

Thus, maybe looking into a more stable form of cryptocurrency such as stablecoins (USDC, USDT, etc.) would be advisable for paying wages in crypto.

Key Milestones of the Financial Market in 2021

The year 2021 was packed with exciting developments and meaningful circumstances in world affairs—its economy, politics, and policies—impacting the financial sector as a whole. With the help of its analytics team, the international Forex broker OctaFX compiled a basic rundown to deliver some of the more critical, vital events which it deemed especially important.

The U.S. dollar’s tumultuous journey through quantitative easing (QE)

During the COVID-19 crisis, the U.S. Federal Reserve (Fed) and the European Central Bank (ECB)—the central banks that issue the world’s reserve currencies—flooded the financial markets with new money. The official reason stated was helping the suffering economy because of the pandemic.

Therefore, U.S. president Joe Biden’s proposal of a 1.9 trillion USD stimulus package to Congress arrived on 21 January. The Republican Party was highly sceptical about this approach—some congressmen even recalled the already worrying, continual growth of the national debt (a mass total of 21.6 trillion USD at the time). It is a long-term development whose lack of resolution as of yet does not shake the market’s firm belief in the reliability of the U.S. dollar.

Biden follows suit by signing stimulus plan

Fast forward two months, the U.S. Senate (6 March) and the U.S. House of Representatives (10 March) both approved the stimulus plan before Biden signed it on 11 March as a 1.9 trillion USD economic rescue package. Far from being a bipartisan undertaking, no Republican approved the new order. Although, the document was amended, for example, the clause on raising the minimum wage was removed. New money flooding the market like this filled most market participants with a bullish sentiment.

Another 1.2 trillion USD for ‘infrastructure spending plan’

Towards the end of June 2021, expectations for a tight monetary policy were running high but then the U.S. Senate agreed on and approved a new ‘infrastructure spending plan’, totalling another 1.2 trillion USD. The reason was a sharp increase in inflation in the months prior to June.

Both institutions—the Fed and the ECB—have kept rates at zero or negative and implemented quantitative easing (QE) throughout 2021, increasing their balance sheets and buying bonds with that money. Because of this, their yields fell, which encouraged investors to put capital into companies’ stocks and look for other projects.

Fed announces the end of bailout measures

In September, the U.S. Federal Reserve officially declared that it is ready to end its quantitative easing programme and may raise the base rate already from 2022 rather than 2023, as previously assumed. The Fed further added it would continue to buy 120 billion USD worth of assets each month for the time being: 80 billion USD in treasuries and 40 billion USD in mortgage-backed bonds.

The regulator’s rhetoric initially spooked investors, but overseas markets moved higher on 23 September. The American S&P 500 was recovering from a marginal fall and rose by 1%. Finally, the U.S. monetary regulator started winding down asset purchases from the market to 105 billion USD in November (from 120 billion USD previously) and to 90 billion USD in December—strong signals for the market that the economy starts to revitalise itself.

Bitcoin reaches historic ATH in April before falling again by 53%

The whole of April, the crypto industry radiated with enthusiasm over an ongoing bull market before bitcoin—surprisingly to most—started a steep correction from a historical all-time high of 63,500 USD (13 April 2021) to 34,600 USD (29 May 2021). In those first initial waves downward, due to triggered margin calls, around 8 billion USD in position liquidations took place. This process had put most of the trading community on a new kind of alertness.

This downtrend continued up to 20 July 2021, reaching a price of 29,600 USD per bitcoin (that’s over 53% from the previous all-time high). Only after that point did an uptrend start with a late-summer high of 52,600 USD (6 September 2021). Most were sure the bottom for bitcoin back then had been hit and more frequent but careful trading resumed during that time.

Ethereum stays strong but stable while bitcoin tops twice more

Six weeks later, the mother of all cryptocurrencies topped off its previous all-time high twice in close succession—65,990 USD (20 October 2021) and 67,500 USD (8 November 2021), vindicating a suspected bull market across market observers, retail investors, and legacy institutions once again. All the while, the altcoin market soldiered on with a fluctuating performance, seeing Ethereum’s persistence and some success stories such as the Solana smart-contract platform.

The latter rose from 1.84 USD on 1 January to its all-time high of 258.93 USD on 6 November, gaining 13,972%. Many opportunities for lucrative trades and initial long-term investments were realised. At the same time, some solid altcoin projects stagnated during this period, only showing that their turn for growth has yet to come.

U.S. and E.U. prioritise the basic materials sector

In autumn, the E.U. and the U.S. have agreed to suspend duties on steel and aluminium products. During a speech, the President of the European Commission, Ursula von der Leyen, stressed that her institution planned to develop proposals to suspend duties imposed on goods from the U.S. She elaborated that this would bring trade in steel and aluminium products back to their levels before these tariffs were imposed in 2018.

U.S. President Joe Biden reiterated the intentions of the European Union and the United States jointly committing to a carbon-based agreement on steel and aluminium trade. After President Trump’s era of ‘economic isolationism’, many investors in the relevant industries understood this development as a bullish long-term sign.

European Union at a crossroads

In 2021’s fourth quarter, the euro fell to its lowest value since the start of July 2020. The reason for the plunge was the worsening business climate in the E.U.

In Germany, supply problems within most industries have worsened. Berlin, as the fourth-biggest economy in the world, also inaugurated its new government in December. One important aim of the new coalition is to introduce a wide variety of new taxes on secondary homeownership and carbon emissions on all levels, be it corporate or private. Germany is a major player in the European Union’s power dynamics structure. Its new government in Berlin will have much to say about the way onwards in terms of the continent’s financial and political development.

What the future holds

As Powell hinted throughout the year, in January 2022 there will be a monthly quantitative easing cap of 60 billion USD, halving the 2021 rate and initiating a probable and gradual farewell to the emergency policy. A process that market participants of all shapes and sizes (private and corporate) will have to pay close attention to.

All of the dynamics above will have exciting new developments in 2022 and the years after—many of which will hit most by surprise. So, financial education and constant research and training towards economic and financial literacy are paramount to navigating through these fast-paced markets. This plain truth applies just as much to Foreign Exchange as it does to the stock market or the cryptocurrency domain.

About OctaFX

OctaFX is a global broker that provides online trading services worldwide since 2011. It offers a state-of-the-art trading experience to over 7.5 million traders worldwide. The company is well-known for its financial expertise, analytics, and educational programme. It maintains a high emphasis on financial literacy in its trading community. OctaFX has also won more than 45 awards since its foundation, including the 2021 ‘Best Forex Broker Asia’ award and the 2020 ‘Most Transparent Broker’ award from Global Banking & Finance Review and Forex Awards, respectively.

 

Opera Announces the Launch of Web 3 Focused Crypto Browser

Opera Limited has launched the beta version of its new ‘Crypto Browser Project,’ an internet browser featuring built-in Web 3.0 integrations.

According to the company, the newly launched product aims to target ‘the crypto-native and the crypto-curious,’ with Opera’s in-house crypto wallet at the center of its user experience. 

Opera’s New Web3, Crypto-Focused Initiative

The Norway-based firm has released the beta version of its new Crypto Browser Project which aims to facilitate the all-over user experience in terms of DApps, gaming, and metaverse platforms.

By offering direct access to Web3 services for Windows, Mac, and Android users the project aims to build its community of crypto enthusiasts. 

The last version of Opera browser had a no-login VPN, and native Ad tracker and blocker that help to make the user experience more secure and less time-consuming. While integrating direct access to decentralized exchanges (DEXs), NFTs, and gaming DApps, alongside Telegram and Twitter support, the new browser will also maintain the previously featured security features. 

One feature of the new crypto browser that stands out is that users can switch between applications without signing in to their wallets while accessing a new tab, which would work for apps with an Opera wallet integration.

While Opera launched the first web browser with an integrated cryptocurrency wallet and basic Web 3.0 support in 2018, the latest announcement focuses on the launch of a dedicated Web 3.0 browser.

For now, the current Opera wallet is exclusively compatible with Ethereum, however, the company is expected to integrate Polygon and Solana compatibility in Q1 2022 itself. The same could potentially boost interoperability, scalability, and exposure to a low fee environment.

The dedicated Web 3.0 browser is designed to work with DApps and provide deeper functionality than a traditional browser that has a basic web wallet add-on.

Competitors Inching Closer

While Opera is one of the top names in the industry, competitors like Brave have been keeping up with the market pretty well. The privacy-protecting browser company Brave announced the launch of its Brave Wallet, a crypto-wallet backed into the desktop browser a couple of months ago. 

Brave’s BAT token, however, has maintained lower price levels and is currently down almost 50% from its November price highs. Nonetheless, in terms of growth and development, it presents a good trajectory and could act as a strong competitor for the new Opera browser.

No Crypto ATM’s in Singapore Until MAS Clarifies on New Guidelines

Two cryptocurrency ATM operators have acted quickly to the Monetary Authority of Singapore’s (MAS) new guidelines issued on Monday. Under the new guidelines, the central bank of Singapore said that crypto trading should not be promoted to the public.

Daenerys & Co. and Deodi Pte crypto ATM operators in the city-state have shut down quoting the MAS guidelines as an “unexpected surprise.”

“To comply with the sudden announcement, we have ceased to offer buy or sell services via our ATMs while seeking further clarification from the MAS,” a representative from Daenerys told FXEmpire.

Another operator, Deodi Pte has halted services from its public Bitcoin machine on Tuesday, pursuant to MAS notice.

Singapore crypto ATM
A Bitcoin ATM machine was removed on Tuesday in Singapore – Source: The Straits Times

Daenerys has five crypto ATMs, that accept fiat currency to lend cryptos, mostly Bitcoin, Ethereum, Ripple among others.

Alongside digital currencies’ increasing prominence in Singapore, the untraceable nature making it an attractive medium for illegal activities has made the regulator reiterate the risks it poses.

However, MAS did not impose any penalties from ATM operators for non-compliance.

MAS has restricted crypto businesses from providing physical crypto ATM services in the country. According to the watchdog, convenient access to Bitcoin ATMs might encourage “impulse-driven” trading activities, without considering the risks involved.

Daenerys has an “ongoing application” with MAS as a payment service provider and is waiting for the regulator to approve licensing, the company stated.

No Crypto Ban – Just Made It Less Accessible

Singapore’s financial regulator has clearly told crypto companies to refrain from advertising or promoting their digital currency services but has not banned its usage.

Users can still go and buy cryptos – but it will be more deliberate and less on impulse.

Having said that, with tougher rules spread out by the government, crypto entrepreneurs lured by the country’s crypto-embraced culture, find it difficult to get approval to legally operate in the city-state.

The cautious approach on every aspect is due to the fear of cryptocurrencies being abused for money laundering, terrorism financing, due to the speed and cross-border nature of the transactions.

“Digital payment token service providers in Singapore have to comply with requirements to mitigate such risks, including the need to carry out proper customer due diligence, conduct regular account reviews, and monitor and report suspicious transactions,” a MAS spokesperson told Nikkei.

Such steps by the government show how Singapore’s stance on digital assets has resulted in cryptos being less accessible to the public and the country being one of the most advanced and mature nations when it comes to crypto inclusion.

How Does It Work in Preventing Frauds

Singapore is one of the few countries that openly support cryptocurrencies and blockchain projects. According to a recent poll by fintech comparison website Finder.com, nearly 16 percent of Singaporean adults currently own cryptocurrency.

Bitcoin is the most popular coin owned by citizens, followed by Ethereum and Cardano.

However, some crypto ATM kiosks allow certain transactions to take place without acquiring any customer information other than their phone numbers. Some even use prepaid cellphones, that are disposed of after a transaction.

Shutting down crypto ATMs means that it is important for operators to set know-your-customers (KYC) standards to protect them from fraudulent activities and transactions. This is however been more challenging to implement in the cryptocurrency space where anonymity thrives.

European Countries Should ban Proof of Work Mining — ESMA Vice Chairman

Due to growing concerns about the energy consumption of crypto activities, the Vice-Chair of European Securities and Markets Authority (ESMA) Erik Thedéen has called for banning Proof of Work (PoW) mining. 

According to a Financial Times report, Thedéen believes that regulators in Europe should instead opt for Proof of Stake (PoS) networks instead. 

PoW Energy Consumption Raises Concerns

Both PoW and PoS are the most common consensus mechanisms for blockchains today. However, unlike PoW, which requires energy-intensive miners, PoS depends on a few validators to process transactions. 

Many blockchains now adopt PoS as a newer and more energy-efficient consensus mechanism. But the major blockchains such as Bitcoin and Ethereum still use PoW. 

For early adopters, PoW aligns better with the decentralization that blockchain promises.

However, not many people agree, especially with the global energy crunch and climate change. 

Several countries have already banned or limited crypto mining due to this reason. Recently, Kosovo banned crypto mining after blackouts due to high electricity use.

Thedéen, who also serves as the chair of sustainable finance at The International Organization of Securities Commissions and director-general of Sweden’s Financial Services Authority, has spoken against crypto mining before. 

He described Bitcoin mining as a national problem. According to him, banning PoW is the solution as “Proof of stake has a significantly lower energy profile.”

Countries now Look to Regulate Crypto Industry

ESMA calls for banning Proof of work mining echoes a wider call for regulation of the cryptocurrency industry. Almost every stakeholder from the International Monetary Fund to the Bank of England has called for more regulations. Already, some countries have started drafting regulatory frameworks for the crypto industry.

Recently, we reported that U.K. authorities might regulate decentralized finance and the crypto industry in general. Spanish financial regulators also made new rules for crypto advertising. And many countries, including South Korea, have enacted crypto-focused laws.

The current appetite for crypto regulation makes the call for a mining ban to be critical. With the global energy crunch and influential position of Eric Theéden in Europe and the international scene, the pressure on crypto miners will only increase. This represents a real threat for crypto mining companies and proof of work blockchains.

IOTA Down by 5% in 24 Hours Following Management Changes

The total cryptocurrency market cap has dropped below the $2 trillion mark again as Bitcoin, Ether, and the other leading coins continue to underperform.

IOTA’s Co-Founder Moves to the Supervisory Board

The IOTA team announced yesterday that its co-founder Serguei Popov has moved from the Board of Directors to the Supervisory Board. The management changes come as Serguei feels it is time to focus on managerial oversight rather than day-to-day decisions and responsibilities.

IOTA is a permissionless distributed ledger that targets the Internet of Things ecosystem. The project aims to support the growth of a machine economy by promoting fee-less machine-to-machine payments. It also seeks to offer greater scalability than blockchain networks.

Since the announcement, MIOTA, the native token of the IOTA ecosystem, has lost more than 5% of its value. At press time, MIOTA is trading at $1.0490 per coin.

IOTA’s poor performance in recent days comes despite being selected for phase 2 of the EU Blockchain Pre-Commercial Procurement last week. The selection will see IOTA improve its protocol over the coming months.

MIOTA Could Soon Enter the Oversold Region

MIOTA has been underperforming since the start of the year, losing 23% of its value during that period. At press time, MIOTA is trading at $1.0490, below its 50-day moving average price of $1.2247.

MIOTA could soon enter the oversold region. Source: FXEMPIRE

The MACD line has been below the neutral zone for more than two weeks now. Meanwhile, the RSI of 39 shows that MIOTA is facing selling pressure and could soon enter the oversold region if the bearish trend continues.

If the negative performance persists, MIOTA could drop below the $1 psychological level for the first time since August.

ADA Loses Its Momentum and Is Down 10% in the Last 24h

ADA, the 5th biggest cryptocurrency by market capitalization ($46 billion), joins other cryptocurrencies with the crypto bearish sentiment and is down over 10% in the last 24 hours.

ADA’s price has been in an amazing rally in the last seven days, especially because of its upcoming launch on January 20 of the decentralized exchange (DEX) SundaeSwap and its first metaverse called Pavia.

Another fact that could have pushed ADA’s price up in the last week, was the recent poll in Twitter made by Ethereum‘s co-founder, Vitalik Buterin, in which ADA was preferred as the currency in 2035 if ETH does not exist, you can see the results below in his tweet:

This recent rally made ADA to top at $1.62, but it is now trading at $1.38$ and it’s still approximately 50% down from it’s all time high of September 2021.

What Seems To Stop ADA’s Rally?

The total cryptocurrency market capitalization is down approximately 2.5%, from $2 trillion to $1.95 trillion, giving an overall bearish sentiment in most of the cryptocurrencies, according to CoinMarketCap.

Bitcoin, the biggest cryptocurrency with $780 billion in market capitalization, and representing 40% of total crypto market cap, is down 1.5% in the last 24 hours. Bitcoin, usually drives the crypto sentiment, either if it is bullish or bearish, as it is happening right now.

Yesterday, a blockchain data company claimed that cryptocurrency exchange Crypto.com lost about $15 million of crypto because of a hack, but a few hours later Crypto.com’s CEO denied the loss of the funds.

What’s Next for ADA in the Short Term?

ADA’s price right now is around $1.38, touching its previous support of January 16th, but if this support is broken, its next strong support is around $1.25 as you see in the price chart below:

ADA/USD chart. Source: FXEmpire

ADA could consolidate in the area of 1.38$ for the next few days, but can also continue the rally after SundaeSwap is launched tomorrow.

But time will tell, and let’s see if ADA can move on its own way without relying on the crypto sentiment in general, especially in Bitcoin price movements.

 

Ethereum may be Losing Ground to ETH-Killers like Solana

Ethereum, the top altcoin has maintained its monopoly in the cryptocurrency space both in terms of market cap and increased adoption.

However, the mushrooming of Ethereum killers over the last few years has raised skepticism around Ethereum’s dominance.

In fact, JPMorgan analysts are of the opinion that Ethereum could be losing ground to rivals in the NFT market, which could give a boost to the likes of Solana in the near future. 

Here are the Roadblocks

With a market cap of over $364 billion, Ethereum takes the second spot by market cap next only to the king crypto Bitcoin. In the DeFi space too, Ethereum has dominated in terms of Total Value Locked (TVL) and covers over 60% of the market (by TVL) with $137.98 billion as TVL in the chain at press time. 

Despite Ethereum’s success in the DeFi space and the NFT sector competing cryptocurrencies or ‘Ethereum-killers’ are trying to improve on its biggest flaws.

As the Ethereum network continues to suffer from a spike in transaction fees, high gas fees, and network congestion, the pertaining issues seemed to have pushed NFT apps away from the Ethereum network, as per JPMorgan analysts.

The bank’s analysts have found that Ethereum’s NFT volume share fell from 95% at the start of 2021 to around 80%. A reverse migration of NFT apps from Ethereum could further affect ETH prices and demand structure in the future if not dealt with. 

Analyst Nikolaos Panigirtzoglou further said:

“It looks like, similar to DeFi apps, congestion and high gas fees has been inducing NFT applications to use other blockchains.” 

The analysis further presented that the Solana network in particular had been seizing market share from Ethereum in recent weeks. Notably, the rise in the market cap of Layer-1 protocols in the last year has further led to skepticism around ETH’s trajectory. 

What’s the Way Forward?

Ethereum founder Vitalik Buterin a couple of weeks back proposed multidimensional pricing of a transaction to tackle high gas fees for the network aiming to optimize gas cost through multidimensional EIP-1559. 

Over 1.5 million ETH tokens have been burned to date and removed from circulation since the London Hardfork, driving a shortage in Ethereum supply. The same has fueled a long-term bullish narrative for Ethereum price. 

However, at the time of writing, much like the larger market ETH too seemed to be losing ground price-wise as it traded at $3,057.80 noting a 3.33% daily fall in price.

With a 985% Rally, SysCoin Activates Ethereum Cross-Chain Bridging

Interoperability is one of the biggest goals of blockchain technology. For users to be able to transfer any cryptocurrency or token to any chain without any effort is an important objective for a truly decentralized future of finance.

While many chains are already adopting it, cross-chain operations are still far from being mainstream.

SysCoin Joins Ethereum

However, even if interoperability may not be canon there are various dApps that many blockchains are using to enable the cross-chain transfer function for their users.

The newest member of this congregation is SysCoin who after announcing the decision 2 weeks ago, has finally activated the much-awaited bridging.

The network achieved this with the help of the Multichain dApp. Using the DeFi protocol SysCoin users will be able to move around their assets across Ethereum easily. Although for now these assets are limited to WBTC, DAI, USDC, USDT, TUSD, and ETH.

Furthermore, once the Ethereum bridge is crossed, SysCoin users would be capable of expanding to the Binance Smart Chain, Polkadot, Luna, and other chains that are accessible via Multichain.

Developments as such help SysCoin move one step further towards achieving the goal it envisioned 8 years ago.

SysCoin was created with the ambition of combining the strengths of Bitcoin and Ethereum to create a reliable, secure network enabled with the power of smart contracts. 

And in some ways, the network is slowly achieving that with the support of investors which is reflected in the asset’s exploding rise.

SysCoin’s Rise in 2021

The network’s token, SYShas been one of the rare coins to register a continuous rally throughout the second half of 2021 despite the multiple crashes and dips of September, November, and early January 2022. 

The price began to rise around July at $0.1 and shot up by 985% over the course of the next 7 months to trade at $1.12 at press time. 

On the other hand, the chain it’s bridging to hasn’t been performing that well. Ethereum’s price has been in a consistent downfall since November which has led to the altcoin king losing over 36.4%.

SysCoin rallied by 985% in 7 months – Source: FXEMPIRE

While it can’t be said how well this development will affect Ethereum, SysCoin will definitely be in a good spot for a while now.

Coinbase To Let Users Purchase Its Upcoming NFTs Using Mastercard

Coinbase on Tuesday penned a deal with payments behemoth Mastercard, enabling users to purchase its non-fungible tokens or otherwise known as  NFTs, using credit and debit Mastercards.

The agreement classifies NFTs as “digital goods”, enabling a broader group of consumers to purchase the digital collectibles.

Buying NFT’s, especially for those who are new to the space, hasn’t been a cakewalk. Buyers first need to create a crypto wallet, buy cryptocurrencies and then purchase NFTs using cryptos such as Bitcoin or Ethereum in an online marketplace like OpenSea or Rarible.

But according to Mastercard, getting more and more people involved in the burgeoning NFT market through a simple payment process – not involving cryptos – not only supports more NFT artists but also makes these collectibles more accessible.

“Buying digital goods should be as simple as buying a T-shirt or coffee pods on an e-commerce site. You can make your purchase with one click — that’s it,”

Raj Dhamodharan, EVP of blockchain and digital asset products at Mastercard, stated in a release.

He also noted that Mastercard will utilize its acquisition of CipherTrace, a crypto intelligence company, to enhance the safety of NFT purchases.

Coinbase’s Cup of NFTs

Coinbase first announced the launch of its NFT marketplace in October 2021, giving users the opportunity to mint, collect, sell and even share NFTs. The exchange soon announced that it reached over one million sign-ups.

Coinbase NFT platform still hasn’t gone live, but it currently has a waitlist for users to sign up and get early access.

The exchange’s NFT has also polled its followers, asking for their favorite NFTs, to better know users’ expectations and include their preferences in its upcoming NFT marketplace.

While Coinbase’s move has been very on-trend, it arrives late to the NFT-credit card integration conversation.

Other popular NFT marketplaces have already explored the possibility of integrating credit and debit cards for NFT payments. Rarible offers the option of buying an NFT from its array using Mastercard or Visa cards.

Buying NFTs With Credit Card

Many newcomers have been seeking ways to enter the NFT token system without the need for cryptocurrencies. Buying an NFT directly with credit or debit cards is something that many users prefer.

For instance, Tallinn-based crypto exchange Switchere introduced direct purchase of NFTs from SpaceSeven marketplace with credit or debit cards. This uses a Switchere widget, integrated into the marketplace that starts accepting payment via cards during checkout.

Though the payment process might sound easier with credit cards, it does come with few implications. Micah Carnahan, crypto expert and writer says, “the use of debt to purchase volatile assets like NFTs carries its own risks.”

According to him, if a user purchases an NFT using a credit card and fails to pay off the balance, there are chances that the user might lose money, especially when the price of the NFT goes down.

It is also important to note that the traditional way of buying NFTs would incur a multitude of fees such as the purchase of the NFT comes with its own gas fee. Likewise, buying an NFT with a credit card will come with a credit card processing fee.