A daily round-up of the most important news stories within the cryptocurrency market, including regulatory updates and daily data analysis.
Crypto Market Shows Stability But Expect Some Macro Headwinds – A Glassnode Report
Glassnode’s weekly newsletter on 14th Feb shows that the Long-Term Holder supply has been constantly holding onto a sideways trend – with a total supply held of about 13.341 million BTC. The data shows an equal degree of LTH spending to the degree of coin maturation, indicating a resilient cohort of HODLers.
Miners have also displayed an exceptional preference for holding BTCs as their balances have climbed in aggregate since the beginning of 2022.
At the same time, there is investor uncertainty around the crypto market with the expected rate hikes proposed by the Federal Reserve. In derivative markets particularly, the price signals indicate that investors may prefer protection in order to protect themselves against the upcoming storm clouds on the horizon.
The Glassnode data suggests a strong preference for put option protection if we look at the open interest distribution for the 4-March contract. Clearly, the crypto market is striving to strike between the $38,000 and $40,000 range.
Bitcoin Recovers Losses; And Must Clear A Critical Resistance Level for A Fresh Rally
After extending the decline below the key support level of $42,000, Bitcoin’s price has started a decent recovery wave and is trading above $43,000 against the US dollar at the time of writing. The cryptocurrency has also broken the $43,500 resistance zone, however; a resistance at $43,800 was seen on the 100-hour SMA chart as Bitcoin continues to move between the $45,000 to $45,700 price range.
The BTC/USD technical data further indicates that the market players continue to wait for some spark in momentum that can push the price of Bitcoin above the $50,000 mark. The trading range of $41,500 and $43,000 over the past few days suggests that traders are less optimistic about the short-term prospect of Bitcoin, mainly due to the increasing tension at Ukraine’s borders
Uncertainty Around Laws Continues to Hang Over Indian Crypto Community
Yesterday, in a keynote address at the Indian Banks Association, the Deputy Governor of Reserve Bank of India, T Rabi Sankar, put cryptocurrencies in the same category as Ponzi schemes.
He shares that “cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value – all these should be reason enough to keep them away from the formal financial system.”
Most of his reasoning revolved around “no intrinsic value” of cryptocurrencies and that they “were developed to curb the financial regulation system”. He also argues that “Bitcoin is built on a weird mix of speculative greed bolstered by a utopian cyberlibertarian ideology and likened it to a digital gold rush”.
Coming from the DG of the Central Bank of India, these comments are indeed worrisome for the Indian crypto community. However, yesterday, during a press conference, the FM of India said the government and the RBI are “on board and discussing the issues of cryptos and regulation”.
SEC Claws Into DeFi – Charges BlockFi and May Tap Into Wonderland
The US Securities and Exchange Commission has charged the DeFi lending protocol, BlockFi, with $100 million as the company failed to register its retail crypto lending products with the government. BlockFi also violated the registration provision of the Investment Company Act of 1940.
This case might be the first-of-its-kind action seen by the DeFi industry, particularly with respect to the crypto lending platforms. In an attempt to settle the charges, BlockFi has agreed to pay the penalty of $100 million and agreed to cease its unregistered offers and sales of the lending product.
While SEC hasn’t yet asked for an inquiry on Wonderland, experts are of the opinion that the protocol could bring trouble for the whole decentralized finance (DeFi) ecosystem. If you are unaware of what’s happening with Wonderland, continue reading:
In January, it was revealed by an on-chain sleuth that Wonderland’s treasury is under the control of a convicted felon, Michael Patryn – who was also the co-founder of the fraudulent former Canadian crypto exchange QuadrigaCX.
The Wonderland’s Treasury aka PCV (Protocol Controlled Value) uses a multisig scheme for security, which is largely unilaterally managed by Patryn and Sestagalli (founder of Wonderland).
Though SEC isn’t involved so far, the whole case of Wonderland could become an entry point for SEC to tap into the DeFi, possibly to explore the sector and understand whether it should be put under the Investment Act of 1940.
Canada Cracks Down on CrowdFunding Platforms – Blocks Crypto Aids, Too!
In an attempt to stop the ongoing protest “Freedom Convoy”, Canadian authorities have taken a different approach aiming to stop the funding aiding the blockades, including transactions in digital currencies.
Chrystia Freeland, the finance minister of Canada, announced yesterday that the government is undertaking strict financial measures under which Canadian banks can freeze accounts suspected of funding the riots, as well as suspend insurance on vehicles taking part in the protest. These changes involve all kinds of transactions, including cryptocurrencies.