China Makes Aggressive Moves to End the Circulation of All Digital Asset Exchanges
Forbes reported that China wants to stop all digital
currency transactions, attempting to block payments for all clients who
purchase cryptocurrency. As recently as 2017, China was responsible for as much as 90% of the global cryptocurrency trading
before stepping up this strict regulation. They will no longer be opening
accounts for digital asset services. The PBOC released statements expressing
their concern about the risks and disruption that they believe DeFi catalyzes.
"Cryptocurrency
transactions and speculative activities have disrupted the normal economic and
financial order," the PBOC said in a statement. "They increase the
risks of crimes such as illegal cross-border transfers of assets and money
laundering, which severely infringe upon the property safety of the general
public."
Ether, Dogecoin,
and Bitcoin took a dive after the PBOC released these statements. Coin Metrics
reported that Bitcoin fell 11% to $28,911, its lowest in two weeks.
Bitcoin Is Following a "Death Cross"
Pattern. What Does It Mean?
Forbes also reported that Bitcoin's 50-day moving
average has fallen below the 200-day moving average. Experts call it the
"death cross" pattern, and Coinbase co-founder Fred Ehrsam has made
bold comments in response to the recent drop in the value of crypto assets.
According to
Investopedia, a moving average is a calculation designed to create a constantly
updated average price on a stock. The analysis mitigates the impacts of
short-term fluctuations over a specific period. Ehrsam stated that
"there'll be millions and millions of cryptocurrencies and crypto-assets,
just like there were millions and millions of websites. Most of them won't
work."
But Ehrsam
compared opportunities in the crypto space to options available early on in the
internet's inception. People will launch many different ventures (in this case,
coins). Many of them will fail, but the underlying technology (the blockchain)
is precious and powerful as a reimagining of finance and technology as we know
it.
As of last check,
Bitcoin was trading at $34,698.47.
Pending Regulation Could Have Major
Implications for the Future of Digital Asset Management
The Consumer
Safety Technology Act is a Bipartisan bill that pushes the Secretary of Commerce and the
FTC to study blockchain and digital asset storage on a much more granular level
than ever before.
The Blockchain
Innovation Act and the Digital Taxonomy Act are two titles within the bill that
aim to uncover "unfair or deceptive acts or practices in transactions relating to
digital tokens."
Cyberattacks such
as Colonial Pipeline may have accelerated this shift in regulation, as
Cointelegraph reported that "the bill passed the 117th Congress within a
week of its introduction, with a resounding 325 votes in favor of, and 103
votes against."
It remains to be
seen how this bill will affect consumer protections with digital assets in the
long term.
A Record-Breaking $13 Million Outflow:
Ethereum Takes Its Biggest Dive since March
Business Insider rounded up some data to provide visibility
into Ethereum's record slide from last week:
● Digital asset
outflows reached $21 million
● The price of
ether dropped 12%
● Bitcoin saw
outflows of $10 million, while trading activity increased by 43%
Ethereum products
have been a go-to for investors amid Bitcoin’s dive as of late. But Coin
Shares, the digital asset investment firm that supplied the data, remarked that
investor's opinions are in flux about Ethereum versus Bitcoin.
"Ethereum
has been the stalwart relative to bitcoin over recent months but inflows over
the course of last week were mixed, implying mixed opinions amongst
investors."
Also, this week,
Elon Musk tweeted about the possibility of Tesla accepting Bitcoin again, which
helped the coin gain some additional ground.
Mark Cuban's Investment in Iron's Stablecoin
Token Did Not Go Well
According to Decrypt, Mark Cuban was an investor in Titan. This
stablecoin recently lost nearly all of its value due to the first "bank
run" in the history of digital currencies.
The appeal of stablecoins is that they use various means
to achieve less volatility than cryptocurrencies that aren't backed by fiat
currencies. For example, some stablecoins, like Tether, are supported by the US
dollar. In contrast, strategic assets like Gold and oil support others. In
Cuban's case, he stressed that he wants more regulation around stablecoins, as
digital currencies don't have the consumer protections in place that banks do.
NFT "Dreaming at Dusk" by IX Shells
Sells for $2 Million
Forbes reported that Itzel Yard (aka IX Shells), a
rising female Afro-Caribbean digital artist, recently sold her piece
"Dreaming at Dusk" for $2 million on Foundation, a digital art
marketplace. She created Dreaming at Dusk for the 15th anniversary of the Tor
Project, an internet browser with a mission "to advance human rights and freedoms by creating and
deploying free and open-source anonymity and privacy technologies, supporting
their unrestricted availability and use, and furthering their scientific and
popular understanding." PleasrDao, an art collector passionate about
cybersecurity, purchased the piece in May for $2,019,820 (500 ETH).
Crypto Kiosks Are Gaining Immense Popularity
Coin Cloud
provides cryptocurrency ATMs to buy digital assets in 43 US states. According
to Coindesk, the company will soon reach 2,000
installations, up from 1,250 in December 2020. Traditional payment methods like
cash, debit, and credit can all be used with Coin Cloud's machines. The company
is based in Las Vegas and allows customers to purchase and sell over 30
different coins. In addition, Crypto kiosks offer a physical location to buy
and sell digital currency. Reuters reported a near 45% increase in the market
growth of these ATMs back in March and that they can also benefit people who
don't have bank accounts or want to send foreign transactions.
Intertrust Survey: Hedge Funds May Hold over
$300 Billion in Crypto Assets in the Next Five Years
Buyers are not
afraid of the recent swings Bitcoin is experiencing, according to Business Insider. The Intertrust survey interviewed 100 hedge
fund CFOs worldwide. Two exciting stats emerged from the poll: 7.2% of hedge
fund assets under management may be in digital asset
holdings by 2026,
and North American hedge funds, in particular, could manage an even higher
amount: up to 11.2% of their assets. Anthony Scaramucci, founder and managing
partner of hedge fund Skybridge Capital, said recently that DeFi "has offloaded a lot of
systemic risk that people have been worried about" as crypto assets have
seen $1 trillion taken out of the market. He explained that if traditional
banks have a $1 trillion collapse, they need massive support from the Federal
Reserve. In contrast, those same losses in digital assets have not crippled any
institutions in the same way.
Looking Forward
While crypto
investors are still reeling from ongoing volatility, this week's news cycle
doled out plenty of reasons to feel both bullish and bearish on the state of
the market. Crypto remains a space of rapid growth, but anyway you slice it,
still not for the faint of heart.
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