ConsenSys Chief Cryptoeconomist Sees Little Drama Ahead for Bitcoin BTC Price

Bitcoin’s Undramatic Fate

Is bitcoin destined for the same narrow range it has occupied for much of this year, ducking and weaving in the low $20,000s?

Lex Sokolin, head of crypto-economics for blockchain software technology firm ConsenSys, believes sticky high inflation is at the root of the entrenchment. The largest cryptocurrency by market cap recently traded at $23,508, up 1% in the last 24 hours. BTC is up around 40% this year and ether, the second largest crypto by market cap, almost as much, but their momentum has also stalled recently amid erratic jobs and price data.

“I don’t see any dramatic shift in the market regime,” Sokolin, who has contributed columns to CoinDesk, wrote in an email. “We still have stubborn inflation and central banks are committed to raising interest rates until inflation cools further. That means tech stocks and cryptoassets will continue to trade at depressed multiples, and the housing market is at risk. Consumers fewer assets for discretionary spending also limit participation in Web3 -trade, which can be seen as fashion or luxury consumption.”

He added that “institutions are waiting for further regulatory clarity, and the enforcement actions add to the uncertainty, although he also noted “good news that many of the poorly structured players in 2022 have been exposed and (that) the market” was “dealt with” the consequences. “

Ether recently changed hands 15 $1,650, up 2.1% from Tuesday, same time. Sokolin was optimistic about the longer-range impact of the upcoming Shanghai upgrade. “Withdrawals should significantly reduce staking activity in the Ethereum network,” he said. “In the short term we may see some investors move their positions, but in the longer term I expect to see a higher proportion of Ether staked to secure the network.”

Other major cryptos were largely in the green, despite ongoing inflation and economy-related anxiety, although major stock indexes underperformed. The CoinDesk Market Index, a measure of crypto market performance, was up 1.8% for the day. The CMI rose just 0.8% in February, well off January levels, according to the latest monthly report, although the computing and DeFi sectors remained buoyant, rising 17.5% and 11.1% respectively. Computing has increased by around 80% in 2023.

In an interview on CoinDeskTV, CoinDesk Indices CEO Jodie Gunzberg said interest in AI tokens had helped fuel Computingr’s rise. “I don’t know that they’re all AI tokens, but some of them certainly live up to the AI ​​hype, the ChatGPT that’s been dominating the conversation, we’re seeing some pretty spectacular performance in computing. So we’re seeing a lot of these tokens dominating. And even though computing doesn’t make up a large part of the market, in terms of market capitalization, there’s still a ton of opportunity there.”

Tron founder Justin Sun sees potential in Hong Kong

The city of Hong Kong is looking to become a virtual asset center as soon as this summer.

Justin Sun, founder of the Tron blockchain and the man who runs the Huobi crypto exchange, is ready for that change. He said in a tweet on Monday that Huobi will apply for a virtual asset services (VASP) license in Hong Kong under new requirements for operations that take effect in June. If approved, the exchange will launch Huobi Hong Kong. “Finally, since Huobi is one of the leading blockchain exchanges in the region…I definitely [have] confidence that Huobi will secure the license,” he told CoinDesk TV’s “First Mover” on Wednesday.

Huobi, which ranks 15th in total trading volume according to CoinMarketCap data, is one of the exchanges seeking a license to operate in Hong Kong’s crypto market. Seychelles-based crypto exchange OKX, which ranks eighth in total trading volume, has also applied for a license in the city. And then there is the looming presence of China.

“Beijing views Hong Kong as one of the cryptocurrency experiment zones,” Sun said.

The Chinese government’s relationship with crypto has been troubled. Two years ago, regulators cracked down on crypto trading and mining.

Sun believes China sees Hong Kong as a kind of experiment, to see if crypto can be regulated on the mainland. If Hong Kong succeeds, it could create a change of attitude in Beijing. “So that’s why they want to see Hong Kong do it first,” he said. “And then you see the result. If it has positive feedback, they can change the policy in mainland China as well.”

The new requirements do not necessarily mean that crypto will be available to retail traders in Hong Kong, but at least for now, Hong Kong’s securities regulator, the Securities and Futures Commission (SFC), has extended a lifeline to crypto companies.

Bitcoin (BTC) held firm above $23,000 as crypto traders look ahead to a new month, following minimal gains for the largest cryptocurrency by market capitalization in February. CoinDesk Indices CEO Jodie Gunzberg shared her crypto market analysis. In addition, TRON founder, Huobi Global Advisor and Grenada Ambassador to the WTO Justin Sun joined “First Mover” to discuss Huobi’s plans to apply for a crypto exchange license in Hong Kong. And former SEC Enforcement Branch Chief and Bragança Law Attorney Lisa Bragança weighed in on the latest FTX developments.