Bitcoin BTC price remains anchored near $23.5K

Bitcoin is holding close to $23.5K

Bitcoin continued its weekend rally near $23,500 into Monday as investors spent another day weighing devilishly stubborn inflation and the prospect of the US Federal Reserve hiking interest rates more hawkishly than previously expected.

The largest cryptocurrency by market cap recently traded at $23,481, roughly flat over the past 24 hours but down from peaks a week ago above $25,000 – before surprisingly strong jobs and price data led markets to increasingly consider the outlook for an interest rate of 50 basis points. increase instead of 25 bps.

“Markets have recently priced in prices that will remain higher for longer than previously expected due to inflation numbers that appear to be quite stubborn,” Brent Xu, CEO and co-founder of Web 3 bond market platform Umee, wrote in an e mail to CoinDesk. “A possible 50 basis point hike could also be on the cards now.”

Still, Xu also noted hopefully that the crypto markets haven’t seen “a massive downturn…like the more alarmist crypto Twitter commentators have been warning about.”

“I suspect we haven’t seen a massive pullback because the short sellers have already sold,” he wrote, adding: “Last year’s streak of blowouts appears to have come to an end. This is not to say we can’t go lower from here But a bottom for this cycle is probably in now and in turn we are probably in an accumulation phase I think we have to be prepared for sideways action for a while.

Ether was almost flat, changing hands at around $1,630. Most other major cryptocurrencies were flat or edged down slightly with layer 2 platform Polygon’s MATIC token and decentralized finance protocol Aaves’ AAVE token both recently down around 3%. The CoinDesk Market Index, a measure of the crypto markets’ overall performance, ticked down around 0.36%.

After a week to forget, the stock markets returned to their winning ways, but only slightly. The technology-focused Nasdaq, the S&P 500 and the Dow Jones Industrial Average (DJIA) all ticked up a few fractions of a percentage point. Treasury yields fell slightly but remained fretfully high above $3.90 on the 10-year note.

To be sure, some crypto news on Monday was ominous for markets, none more so than a report from crypto asset manager CoinShares that short-bitcoin funds saw $10 million in inflows during the week ending February 24 and that long-bitcoin funds lost $12 million, the third consecutive weekly outflow. And later in the day, crypto exchange Coinbase tweeted that it would suspend trading of Binance USD (BUSD) starting March 13 because the stablecoin does not meet listing standards – the latest blow to the stablecoin sector.

Still, at least one other analyst felt at least partially optimistic about crypto prices’ path forward. In an interview with CoinDesk TV, Bruno Ramos de Sousa, head of emerging markets at crypto asset manager Hashdex, said the markets were “in the recovery phase already … past the bottom.” Ramos de Sousa noticed increased interest among institutional investors in recent months.

“They’re educated in the sector and they’re looking for interesting windows to come in,” he said. “These are hedge funds, family offices, people concerned with bottoms and ups.”

Layer 1 Blockchain Coinflux has a complicated relationship with China

Beijing is pro-blockchain but anti-crypto. It sees the former as a key technology, as important in the 21st century as the Hypertext Transport Protocol (HTTP) was in the 20th; the latter is a speculative resource that inhibits the worst parts of capitalism.

Meanwhile, “China” tokens are rising. “China” is in quotes because most of these projects like NEO, VeChain (VET) and Conflux (CFX) go to great lengths to limit their exposure to China. They have development teams in China, but the company is registered offshore.

You can use the technology in the country, just don’t exchange tokens. A version of NEO is available on China’s Blockchain Service Network, for example, but this exists as a universe of NEO that the rest of the world looks to in order to comply with local law.

In many cases, these tokens are separate from the project. You cannot see China data on the chain and it can be questionable what is driving the token’s growth.

Conflux’s CFX token is the exception to this.

Can you trade Conflux’s CFX token in China? No.

Can someone in China interact with the west facing part of the Conflux chain? No, these parts are separate.

But at the same time, CFX is the tie that binds the two together.

“It’s only one chain, but we have two locations,” Fan Long, Conflux co-founder, told CoinDesk via email. “You can think of the domains as operating as independent chains, but they share the same consensus engine. There is no security risk in moving assets across two domains.”

Within China, CFX relies on Conflux’s sponsorship mechanism, which allows regular users to interact with smart contracts without holding crypto. Things are still available on the chain minus the gas fees.

Developers of decentralized applications, such as China’s version of Instagram called “Little Red Book”, buy CFX directly from Conflux. They pay in fiat and receive an official receipt. In many ways, it will be similar to paying for a hosting bill for a cloud service.

“Because the public chain must have a native token that manages the resources of gas, and China does not encourage anything related to fungible tokens, we choose to have foreign entities manage the token issuance of CFX,” Long said.

You can see on the chain how CFX is used. Below shows the on-chain activity for a digital collectible, China’s version of a non-fungible token (which it calls “digital collectibles,” and tolerates if speculation is not involved) on its version of Instagram.

In many ways, CFX can be considered a proxy for the success of Conflux in China. But is there enough interest to drive and sustain triple digit growth on the CFX token?

Solana’s (SOL) price surged in the last 24 hours after the protocol crashed over the weekend and froze transactions. The Solana Foundation said an investigation into the cause is ongoing and will be updated as new information becomes available. CoinDesk managing editor for data and tokens Danny Nelson provided an update and CoinFund’s managing partner Seth Ginns shared his reaction. In addition, Chainalysis Research Director Kim Grauer discussed the prospects for illicit crypto volumes in a new report.