Crypto: Crypto Week at a Glance: What Moved Markets
Other cryptocurrencies including Polkadot and Dogecoin also fell. Ether, however, rallied sharply in anticipation of a groundbreaking software upgrade to the blockchain.
Here’s a weekly roundup of all the notable stories from the crypto space:
1. Meta is rolling out the NFT feature on Instagram and Facebook
Users of Instagram and Facebook can now display their NFTs on the platform, according to a recent announcement from Meta.
This comes after a Meta update in early August that said they were expanding the 100 nations in Africa, Asia-Pacific, the Middle East and the Americas that are part of their Instagram NFT project. In addition, the social media giant turned metaverse advocate announced on Monday that users will be able to upload digital collectibles by connecting their NFT wallets to either Facebook or Instagram.
2. California State Assembly Passes Crypto Regulation Bill Awaiting Governor’s Approval
A recently approved law that would require digital asset exchanges and other crypto businesses to apply for a license to operate in the state is expected to be signed by California Governor Gavin Newsom.
The Digital Financial Assets Law, also known as California’s “BitLicense”, is modeled after the 2015 implemented BitLicense law in New York. If Democratic Gov. Gavin Newsom signs it, California’s law would go into effect in January 2025.
“While the novelty of cryptocurrency is part of what makes investing exciting, it also makes it riskier for consumers because cryptocurrency businesses are not adequately regulated and do not have to follow many of the same rules that apply to everyone else,” Assemblyman Timothy Grayson (D-Concord), the bill’s sponsor, said in an earlier statement.
One of the conditions is a restriction on stablecoin trading by California-licensed companies until 2028 unless the stablecoin is issued by a bank or has a license from the California Department of Financial Protection and Innovation.
3. Crypto.com accidentally sent an Australian woman Rs 56 crore instead of a Rs 5,400 refund
While processing a $100 AUD (INR 5,400) refund, cryptocurrency trading company Crypto.com accidentally transferred $10.5 AUD (INR 56 crore) to an Australian woman’s account, and shockingly, the mistake went undetected for seven months.
In February, the company was granted permission to freeze Manivel’s Commonwealth Bank account after bringing an action in the Victorian Supreme Court. However, most of the money had already been moved to other accounts, which were later frozen.
The money, according to evidence shown in court, was used to buy a four-bedroom house in Craigieburn, north of Melbourne, for A$1.35 million in February. After that, the ownership of the property was transferred to the name of Manivel’s Malaysian-based sister, Thilagavathy Gangadory. Gangadory did not respond to communications from Crypto.com’s attorneys, and thus efforts to serve her with the freezing orders have been fruitless to date.
4. Major ETH Traders Positioning for Volatility Peak as Ethereum 2.0 Merge Approaches
Some view placing directional bets on an asset price, whether hedged or unhedged, as the most exciting trading technique in the financial markets. The upcoming upgrade to Ethereum, the parent blockchain of the cryptocurrency, known as Merge, has ether (ETH) traders doing just that.
Big whales seem to be using the long strangle options trading method, which ignores the direction the cryptocurrency is moving in and instead seeks to profit from the level of price volatility.
In anticipation of the upcoming merger on September 15, Ethereum miners have been adding to their positions since May 2021, which is a four-year high. This shows an extremely strong conviction of Ethereum miners since they increase their balance through mining despite almost all-time low income in fees.
According to Griffin Ardern, a volatility trader at crypto asset management firm Blofin, “block traders have also started speculating on a volatility spike in Ether,” pointing to significant stranglehold trades that went through the books of major crypto options exchange Deribit
5. Indonesia plans to create a “Crypto-Stock Exchange” by 2022
The Indonesian government plans to open a “cryptocurrency stock” by the end of 2022 as part of steps to protect consumers despite growing interest in digital currencies, according to a top executive on Wednesday, August 31.
The authorities had originally planned to open the “Crypto Stock Exchange” in 2021. “We will ensure that all requirements, procedures and necessary steps are taken,” said Indonesia’s Deputy Trade Minister Jerry Sambuaga, noting that the delay cannot be attributed to a significant problem.
6. OpenSea witnessed a 99% drop in daily volumes.
The hype that the NFT bubble burst became a reality. With trading volume on OpenSea, touted as the world’s largest marketplace for non-fungible tokens (NFTs), down 99% in just under four months, what was once a raging market fueled by FOMO during the 2021 crypto bull market is now barely a drop.
Data compiled by DappRadar shows that while OpenSea handled a record $2.7 billion in NFT transactions on May 1, the marketplace only saw $9.34 million worth on Sunday. On Sunday, the business had 24,020 users, which is almost a third lower than in May, when it reached its highest number of transactions.
7. Japan to review existing corporate crypto tax in bid to lure startups looking for tax breaks
Japan may reconsider its current corporate tax rates for cryptocurrency to keep companies in the country. Japanese diplomat Taira Masaaki confirmed the tax review on Twitter.
A 2023 tax reform proposal is being considered by the Financial Services Agency (FSA), and Japan’s Ministry of Economy, Trade and Industry may exempt cryptocurrency firms that create their tokens from paying taxes on unrealized gains.
According to Yomiuri, the company’s assets are taxed depending on the market value at the end of the tax period, meaning startups that issue their own tokens will have to pay taxes on unrealized gains for any tokens they might hang on to. The possible tax cut aims to motivate entrepreneurs to stay in Japan.
(Shivam Thakral is the CEO of BuyUCoin)
