Crypto-price check: Investors are desperate for a positive sign
Cryptocurrency prices were declining on the first business day after the July 4 holiday as investors continued to be cautious.
Bitcoin, the most popular cryptocurrency, fell slightly to $ 19,415.74 at the last check on July 5, according to CoinGecko, down 71.9% since its highest of 69,044.77 on November 10.
Ether, the original cryptocurrency of the ethereum platform, fell 1.7% to $ 1,085.25 and dogecoin fell marginally to $ 0.066217.
‘Fingers crossed’
“Crypto prices continued to fluctuate over the holiday weekend,” said Frank Corva, senior analyst for digital assets at Finder. “As the weekend approached, some major crypto-Twitter accounts shared technical analysis that required yet another major step into the crypto market, warning that bitcoin could fall to around $ 16,000.”
Although this did not happen, Corva said that “the crypto markets continued to dance on a knife edge with BTC’s price jumping between $ 19,000 and $ 20,000.”
“Investors are crossing their fingers that FTX CEO Sam Bankman-Fried’s purchase of BlockFi, a crypto-lending and lending platform, may be one of the last steps needed to stop the crypto-market contagion stemming from the Terra (LUNA) ecosystem that fell from each other.” he said.
Bankman-Peace’s company reached an agreement giving it an option to buy BlockFi for up to $ 240 million. The deal also gives BlockFi a $ 400 million revolving credit facility.
“The worst can be over”
Corva said that the fallout has affected other crypto-lending and lending platforms, including Celsius and Voyager, the crypto-venture capital fund Three Arrows Capital (3AC) and BlockFi.
“Bankman-Fried and Changpeng Zhao, CEO of Binance, have been rumored to be looking to buy out other distressed crypto platforms as well,” he said. “If Bankman-Fried and Zhao bail out these companies / buy them, the worst collapse of the crypto market could be over.”
David Lesperance, managing partner for immigration and tax adviser at Lesperance & Associates, said that in the midst of the crypto-meltdown, “Bankman-Fried is trying to play a modern JP Morgan by rescuing key players in the crypto ecosystem.”
He said FTX also provided an additional $ 200 million in credit and a separate $ 15,000 Bitcoin revolving facility available to Voyager Digital, the Toronto-based crypto-broker that owed $ 660 million to troubled hedge fund Three Arrows Capital Ltd.
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“A rulebook”
At the same time, Lesperance said, Zhao spoke of a “responsibility” to help crypto companies struggling to effectively compensate victims of the hacking of the crypto game Axie Infinity earlier this year.
In March, Ronin, the blockchain underlying Axie Infinity, said hackers had stolen about $ 625 million from games to make money online.
On the regulatory front, Lesperance said Securities and Exchange Commission chief Gary Gensler has proposed “one rulebook” governing cryptocurrency companies.
“This is to prevent anyone from slipping through the regulatory gaps as the SEC and the Commodity Futures Trading Commission (CFTC) regulate the crypto environment.
Meanwhile, he said, the CFTC is taking political momentum to regulate crypto markets directly under the Responsible Financial Innovation Act, proposed by Wyoming Senator Cynthia Lummis and New York Senator Kirsten Gillibrand.
“A winner will be announced soon”
The proposed legislation would reduce the Security and Exchange Commission’s regulation of at least 200 cryptocurrencies and no longer require U.S. citizens to tell the IRS when they have cryptocurrencies of $ 200 or less.
“The legislative turf war is underway, and given the controversy swirling around the cryptocurrency world associated with stable coins, DeFi and NFT, there is little doubt that a winner will soon be declared,” Lesperance said.
Across Europe, Winston Ma, managing partner of CloudTree Ventures and author of “Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse,” said that EU officials last Thursday secured an agreement on what is likely to be the first major regulatory framework for the cryptocurrency industry, “which comes at one point without a doubt the most challenging moment for cryptocurrencies.”
“This EU landmark law, known as Markets in Crypto-Assets, or MiCA, will impose strict rules on crypto players,” he said. “Surely there will be a reference for crypto-labeling in western countries, such as the United States. MiCA will be encrypting what GDPR was for data protection.”
Ma said that stack coins such as tether and Circles USDC will be required to maintain ample reserves to meet redemption requests in the event of mass withdrawals.
“The good news for the crypto industry is that tokens without issuers like bitcoin, and non-fungible tokens, were excluded from the law,” he said.
