Weekly Review of the Crypto Market (Aug 8 – Aug 14, 2022)

The second week of August was extremely exciting for all types of investors as the market hit a bullish trend that saw Bitcoin (BTC), and Ethereum (ETH) make gains. 

Aside from the two most popular and largest-digital assets by market capitalization, other altcoins saw a significant spike in price. Unfortunately, there was negative press associated with the decentralized mixing solution protocol Tornado Cash which led to a plunge in the value of the project’s ecosystem. 

The United States Treasury levied sanctions on the project while a developer connected to the decentralized crypto firm was also arrested in Amsterdam. 

On the bright side, Ethereum’s upcoming merge was received awesomely by more than 95% of the major players in the crypto finance space. 

Developing Countries Urged by UN Agency to Limit Cryptocurrency Expansion

On Wednesday, August 10, the United Nations Conference on Trade and Development (UNCTAD) announced that it laid out several actions that can help curb the growth of cryptocurrencies in developing countries. “The global reach of private digital currencies makes national regulatory responses challenging but developing countries are not without choices”, UNCTAD stated. 

Out of the top 20 economies that have the lion’s share in the ownership of cryptocurrency, 15 were emerging economies. 

They are Ukraine, Russian Federation, Venezuela, Kenya, India, South Africa, Nigeria, Colombia, Vietnam, Thailand, Brazil, Pakistan, Philippines, Peru, and Belarus. 

In three different phases which were titled The Cost of Doing Too Little Too Late, Public Payment Systems in the Digital Era, and All that Glitters is not Gold, the agency lays out the dangers of the rapid uptake of digital currencies by residents of the aforementioned countries. 

According to UNCTAD, despite their use in facilitating remittances as well as serving as a hedge against inflation, the mainstream use of cryptocurrencies can destroy the monetary sovereignty of countries.

The agency urged countries to implement efficient domestic digital payment systems before the problem gets out of hand. 

Circle and Tether Limited to Support “The Merge”

On Tuesday, August 9, Circle, the crypto firm behind the stablecoin called the United States Dollar Coin (USDC) announced that they are extremely excited about Ethereum’s transition from a Proof-of-Work (POW) network which used the high-energy intensive process of mining to the Proof-of-Stake (POS) network. 

“USDC is the largest dollar-backed stablecoin issued on Ethereum and, as the issuer of USDC, Circle intends to fully and solely support the Ethereum proof-of-stake (PoS) chain post-merge”, Circle added. 

On the same day, Tether Limited, the crypto company behind the stablecoin called the United States Dollar Tether (USDT) announced they will also be supporting Ethereum’s transition to a fully functioning PoS network. 

“For this reason Tether will closely follow the progress and preparations for this event and will support POS Ethereum in line with the official schedule. We believe that a smooth transition is essential for the long-term health of the DeFi ecosystem and its platforms, including those using our tokens”, Tether added in the post. 

As of Sunday, August 14, USDT and USDC remain the two largest stablecoins by market capitalization and continue to maintain their peg against the dollar. 

Number of Addresses with at least 1 BTC Hits All-Time High

On Wednesday, August 10, the number of BTC addresses holding a minimum of one (1) BTC reached an all-time high (ATH) of 894,303, according to Glassnode, world-leading on-chain and financial metrics, data, and insights for Bitcoin and digital assets as a whole.

The latest milestone bodes well for reserve risk analysis as this is a sign of accumulation. Despite the steep decline in the price of Bitcoin which has seen the coin lose about 65% of its price, trading volume remains high.

If more than 800,000 people are still holding onto their BTCs, it means they anticipate a relatively higher value for the coin in the short, medium, and long term. 

It is no surprise to see Wallet Investor, a reputable crypto forecast portal estimate new price highs for the coin. According to the prediction portal, BTC could reach the best possible price of $42,603.20 by the end of 2022. 

BTC could reach the highest possible prices of $85,495.30 and $105,975 by the close of 2025 and 2027 respectively.

Australia’s Central Bank Launches Digital Currency Pilot

 On Tuesday, August 9, the Reserve Bank of Australia (RBA) unveiled plans to examine the benefits of issuing a national digital currency. The project will be done in association with the Digital Finance Cooperative Research Centre (DFCRC). 

“Considerable research has been undertaken by central banks, including the Reserve Bank, into the feasibility and possible technical design of CBDC, in particular exploring the potential use of new technologies such as distributed ledger technology”, the RBA added.

According to the Chief Executive Officer (CEO) of DFCRC Andreas Furche, CBDCs have surpassed the question of technological feasibility to economic benefits. 

“This project is an important next step in our research on CBDC. We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia”, Michele Bullock, Deputy Governor of the Reserve Bank added. 

The pilot project will take 12 months.  

Philippine Central Bank Halts Crypto Service Provider Applications for 3 Years

On Wednesday, August 10, the Bangko Sentral, Philippines’ central bank shared a memorandum that the regular application window for new Virtual Asset Service Provider (VASP) licenses shall be closed for three (3) years starting from 1st September. 

Applications that have completed or passed Stage 2 of the licensing process on or before 31st August will be processed and assessed for completeness and sufficiency. 

Unfortunately, incomplete applications will be tagged as closed. 

With that said, the central bank assured financial institutions operating under their hand that they can be offered VASP services. 

Overall, the second week of August was great for the crypto finance space as it carried on with the growth in certain areas such as decentralized finance (DeFi), and the overall market capitalization of digital assets.

 

    

  

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