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As this communication comes back from a one-week publishing hiatus, it is north of $2 trillion in total capitalization that the cryptocurrency market finds itself again. The fund benefited from this rise, actually outperforming the bitcoin index for the period thanks to a high exposure to ether. The news of interest was numerous during these same weeks. Let’s take a look at what caught our attention.
Surprise in the markets this week as Elon Musk announces that he has acquired a 9.2% share of Twitter and thereby won a seat on the Board of Directors. Musk has always been vocal on hot web topics, including both censorship and cryptocurrencies. What consequence could such an acquisition have? Besides a short-term bounce in Dogecoin – Musk’s pet token – the influence of the world’s richest man could accelerate crypto adoption on the social platform. As Ken Li, Chief Investment Officer at Binance Labs, mentions, “Elon has always been very public about the concept of a more decentralized and censorship-resistant social media platform, and that’s something blockchain technology and Web3 can help enable.”
The European Parliament voted last week in favor of new regulatory measures that would essentially ban anonymous cryptocurrency transactions. The plan aims to impose KYC on all private cryptocurrency wallets, as well as making any anonymous transaction over 1,000 euros from “non-hosted” wallets illegal. These wallets refer to the personal holding of these, not using the involvement of a third party as an exchange. We are talking about wallets such as MetaMask, or in version hardware, Ledger or Trezor. If you send such a sum from one wallet to another, the project would require you to report this transaction to the authorities.
It goes without saying that this measure goes against the very spirit of cryptocurrencies and has been criticized by the majority of players in the industry. One of the most vocal to this effect was Brian Armstrong, CEO of Coinbase. He calls the proposal “anti-innovation, anti-privacy, and anti-law enforcement.” It is true that under this project, crypto transactions are suddenly more scrutinized than traditional monetary transactions. “Imagine if the EU requires your bank to report you to the authorities every time you pay your rent, simply because the transaction is over 1,000 euros,” he argued. He adds that this puts companies like his in an impossible position. “This means that before you can send or receive cryptocurrency from a self-hosted wallet, Coinbase will need to collect, store and verify information about the other party, which is not our customer, before the transfer is permitted. Additionally, whenever you receive 1,000 or more in crypto from a self-hosted wallet, Coinbase will be required to report you to the authorities. This applies even if there is no indication of suspicious activity.”
For the legislation to be officially adopted, it must first go through tripartite meetings between the European Parliament, the European Commission and the European Council. However, the project is not expected to die there, quite the contrary.
At the same time, the United Kingdom continues to try to position itself as fertile ground for the development of digital currencies. This week, UK Finance Minister Rishi Sunak asked the Royal Mint to create a non-fungible token to be issued by summer, adding that this is part of its forward-looking approach to cryptoassets.
This letter deliberately stays away from any political opinion, only mentioning it when it influences the cryptocurrency industry itself. On our side of the Atlantic, it should be noted in this regard that the candidate for the leadership of the Conservative Party of Canada, Pierre Poilievre, pleaded in favor of digital currencies in the country. After paying for his lunch in bitcoin last week as part of his grassroots campaign, he officially spoke out over the weekend. “Give people back control of their money. Keep crypto legal and let it thrive,” Poilievre said on Twitter, where he also promised to help Canadians “take back control of your money from politicians and bankers.” He says he wants to make Canada the blockchain capital of the world.
It must be said that Canadians’ confidence in digital currencies is constantly rising. While outflows of cryptocurrencies from exchanges are at record highs, so are the inflows of funds to Canadian bitcoin ETFs. These funds have increased their holdings by 6,594 BTC since January to an all-time high of 69,052 BTC held. As the analysis firm Glassnode mentions: “It is quite impressive to observe such strong outflows from exchanges (spot holdings), as well as inflows into both ETF products, DeFi applications and digital wallets. on-chain accumulation, despite the many macroeconomic and geopolitical headwinds of recent months”. In short, the accumulation process is clearly continuing, against all odds.
Speaking of hoarding, who but Michael Saylor and MicroStrategy to add to its ever-growing slice of the pie. The firm yesterday announced that it had acquired an additional 4,197 BTC between February 15 and press time. The purchase was made at an average price of $45,714 each. As a result, MicroStrategy and its subsidiaries now hold a total of 129,218 BTC, for a total purchase price of $3.97 billion and an average purchase price of $30,700 per BTC.
Only fools don’t change their mind? Jamie Dimon, CEO of investment banking giant JPMorgan, praised blockchain technology and decentralized finance (DeFi) in a letter to shareholders published on Monday. “Decentralized finance and blockchain are real, new technologies that can be deployed publicly and privately, with or without permission,” Dimon said, before adding that JPMorgan is “at the forefront” of these. innovations. Surprising words from the man who once outright called cryptocurrencies a fraud, then went even further last October saying that bitcoin was worthless.
On the news side, let’s just point out that Intel officially launched its chip on Monday. Intel Blockscale ASIC, built specifically for cryptocurrency mining. The latter offers a high hash rate for lower energy consumption and therefore more eco-responsible. The SEC, unsurprisingly, turned down the ETF project of Ark Invest and 21 Shares. CME Group, which already offers bitcoin and ether futures, says it is now exploring the possibility of doing the same with Solana (SOL) and Cardano (ADA) tokens.
On the more technical side, as bitcoin miners helped release the 19 millionth BTC into circulation on Friday, the mining difficulty of the BTC network returned the favor by hitting its own all-time high. Bitcoin’s network difficulty correlates to the computing power required to mine BTC blocks, which currently requires an estimated hash rate of 201.84 exahash per second (EH/s).
Simply put, bitcoin mining has never been harder, but the network has never been safer.
At the same time, it is all the more interesting to note that network transaction fees have reached a low average cost over a decade. As shown in the chart below, the average bitcoin transaction fee dropped to 0.00004541 bitcoin ($2.06) in 2022, while the median is 0.00001292 bitcoin ($0.59), this which is the lowest of all years except 2011.
According to Alex Thorn, Head of Research at Galaxy Digital, the combination of growing Segwit adoption, transaction bundling, the growth of the Lightning Network, and collapsing miner sales are all contributing factors. this dynamic. More interestingly, the analyst points out that the bitcoin price rise in the fall was the first in history not accompanied by a parallel increase in transaction fees, proving that the technological solutions put in place are working.
If the overall health of the industry is beyond doubt, in the short term, it is without a doubt the same themes that influence the markets. Particularly stark comments pointing to an inflation-fighting urgency by the US Fed over the past couple of days are putting downward pressure on the stock market, dragging cryptocurrencies along. Bitcoin appears in a clear consolidation channel between $43,000 and $48,000, where incidentally the 200-day moving average is. The fact remains that after the decline of the first weeks of January, bitcoin paints a picture of bullish accumulation since touching $34,000 with a series of higher and higher lows.
This article is brought to you by Fonds Rivemont. The Rivemont crypto fund is the first and only actively managed cryptocurrency fund in Canada. RRSP and TFSA eligible. Accredited investors can learn more here.
Disclaimer: This column does not necessarily reflect the opinion of CryptonewsFR and does not constitute investment advice or trading instructions..
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