Strengthens
- Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Stacks, which rose 114.41%.
- Bitcoin’s year-to-date gain has now reached 50% after a further jump in February, Bloomberg reports, in contrast to a decline in global stocks this month thanks to a macroeconomic environment filled with growth and inflation concerns. This divergence has reduced a positive correlation between stocks and crypto that sprouted during the pandemic.
- Music streaming service Spotify is testing a new service called “token-enabled playlists,” Bloomberg reports, which will allow holders of NFTs to connect to their wallets and listen to curated music.
Weaknesses
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Fantom, down 17.14%.
- Liquidators of bankrupt hedge fund Three Arrows Capital said they will take steps to sell some of the firm’s NFTs as part of their recovery efforts, Bloomberg reports. The document did not provide details of the NFTs up for sale, but clarified that these do not include the popular “Starry Night” portfolio, the article continues.
- Coinbase Global Inc., which laid off employees twice in the past year, may cut more if necessary, Chief Financial Officer Alesia Haas said. This would have been to improve the company’s financial results, according to Bloomberg.
Possibilities
- Nigeria is in talks with potential technology partners to develop a new system to operate and manage its digital central bank currency, the eNaira. The central bank of Nigeria wants to develop its own software for the digital currency so that it can keep full control over the effort, Bloomberg explains. They are currently in talks with the New York-based technology company R3.
- Coinbase Global is launching a blockchain that extends the reach of the largest US cryptocurrency exchange deeper into the world of decentralized finance and non-fungible tokens. Coinbase has introduced new products and services to reduce its reliance on retail-driven trading revenue, writes Bloomberg.
- Bitcoin is on track for its second monthly advance, Bloomberg reports, breaking with stocks and other riskier assets that have fallen amid renewed concerns about rising interest rates. Bitcoin is up more than 4% so far in February.
Threats
- California lawmakers on Wednesday expressed frustration with how Gov. Gavin Newsom’s administration has handled cryptocurrency regulations, arguing for the need for state legislation to further help the industry. During hearings, two panels asked for information from the state Department of Financial Protection and Innovation about its efforts to protect consumers, writes Bloomberg.
- A new indictment against FTX co-founder Sam Bankman-Fried features a pair of co-conspirators who the US says helped illegally attempt to influence cryptocurrency regulation by donating millions of dollars to both the Democratic and Republican parties. The United States did not identify co-conspirators in the indictment, nor have they been charged, writes Bloomberg.
- The top US banking regulators stepped up warnings to banks about the liquidity risk associated with stablecoin-related reserves and other sources of funding from crypto firms, writes Bloomberg. The three watchdogs pointed to deposits that include stablecoin-related reserves as particularly vulnerable to unpredictable, large and rapid outflows in crypto markets.
For more crypto and other market insights from Frank Holmes and the investment team, subscribe to the Investor Alert newsletter for free — Click here!
