A top Russian central bank official said at a press conference that the monetary authority will permit foreign trade with crypto.
First deputy governor of the Russian central bank Ksenia Yudayeva stated Tuesday that the bank is open to using cryptocurrency for international payments, Reuters reported, along with Russian media, which added that the bank was reconsidering its position on crypto mining as well. Yudaeva was quoted as saying:
“We have changed our position on mining, and also permit the use of cryptocurrency in foreign trade and outside the country,”
The bank official’s statement, sandwiched into announcements about domestic bank regulation, seems to be a concession to the legislators preparing a new version of the law “On Digital Currency.” Business newspaper Vedomosti reports that the Finance Ministry unveiled the draft of the law at a discussion hosted by the United Russia Party on Frida.
At that discussion, Anton Gorelkin, a member of the State Duma, the lower house of the Russian parliament, mentioned the need for the central bank to weigh in. The input of numerous state agencies and ministries has already been considered in the draft.
The provision to allow international trade in cryptocurrency is an innovation in the law. Adding it into the existing law was a matter of expediency, Economic Development Ministry official Anatoly Dyubanov said at the United Russia event, Vedomosti reports.
Russia's purpose in expanding the use of cryptocurrency internationally is unclear, as the use of digital assets does not affect the terms of the sanctions affecting the country, nor the risks involved for sanction breakers.
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How do the decisions of the United States Federal Reserve affect Bitcoin and the broader crypto markets?
“The Market Report” with Cointelegraph is live right now. On this week’s show, Cointelegraph’s resident experts discuss how the United States Federal Reserve and its chair, Jerome Powell, influence the crypto market.
Next, market analyst Marcel Pechman carefully examines the Bitcoin (BTC) and Ether (ETH) markets. Are the current market conditions bullish or bearish? Has the bottom been confirmed? Pechman is here to break it down.
Then, time for the big question: How do the decisions of Powell and the Federal Reserve impact the crypto market? The Cointelegraph experts give a robust overview of the Fed’s tools and why they play such an important role in the current market climate.
After the analysis, take a look at insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. The analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: Tezos’ XTZ and Fantom’s FTM.
Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room, and write your questions there. The person with the most interesting comment or question will be given a $50 voucher to the Cointelegraph Store.
The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here and during the show are the analysts’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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The Treasury wants to empower the Financial Market Infrastructure Special Administration Regime to oversee the safe return of customer funds in the event of a stablecoin collapse.
In a new consultation paper published on Tuesday, the Treasury of the United Kingdom proposed a new set of regulatory changes for the stablecoin industry.
In its report, the Treasury highlighted the importance of stablecoins in innovation but also noted their ability to impact financial stability should systemic failures occur. Specifically, the Treasury called for:
The appointment of the country's Financial Market Infrastructure Special Administration Regime (FMI SAR) as the primary entity to address the potential systemic failure of digital settlement asset (DSA) firms. DSAs include, but are not limited to, stablecoin issuers, wallet providers and third-party payment providers.
The expansion of the FMI SAR's mandate to include and oversee the timely return or transfer of customers' funds in the event of failure of a DSA firm.
The assignment of greater powers to the Bank of England to direct administrators and create regulations in support of the FMI SAR.
A requirement that the Bank of England consult with the nation's Financial Conduct Authority prior to seeking an administration order or directing administrators in the event of regulatory overlap.
Among other items, the Treasury cites the possibility of "a large numbers of individuals losing access to funds and assets they have chosen to hold as DSAs" as a critical factor for the proposed regulatory changes. By enlarging the FMI SAR's mandate, "it would allow administrators to take in to account the return of customer funds and private keys as well as continuity of service," the report says.
The proposed regulations were tabled weeks after the implosion of stablecoin ecosystem Terra Luna, which wiped out nearly $60 billion in investors' capital. Anonymous attackers exploited structural design flaws within the (now) Terra Luna Classic token and TerraUSD stablecoin, resulting in a death spiral that depegged TerraUSD and sent its sister token to practically zero. As part of the consultation process, individuals and stakeholders have until August 2 to send their input regarding the proposed regulatory changes to the Treasury.
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A new bill for crypto regulation has been approved by Paraguayan Congress despite the central bank and budget commission’s rejection of the project.
Paraguay is viewed by many as a potential hot spot for cryptocurrency adoption due to low electricity costs and relatively soft taxation. The government has recognized this opportunity by pushing forward new legislation around digital assets.
On May 25, a bill that regulates cryptocurrency trading, mining and custody was approved by the Paraguayan Congress on a vote of 40 to 12. The bill must now be ratified by the Senate in order to finally reach President Mario Abdo Benítez.
If ratified, the bill would apply to any individual or organization in Paraguay involved in the mining, commercialization, trading, transfer, production, custody or administration of cryptocurrencies and related functions. The legislation proposes financial and legal guarantees to businesses and individuals, while also imposing restrictions on the matters of electricity spending and taxation.
For example, a translation of article 11 of the bill states: “Crypto mining is recognized as an industrial and innovative activity. This activity will be a beneficiary of all mechanisms and incentives foreseen in the national legislation ”
Regulations didn’t come without resistance, though; both the Paraguayan Central Bank and budget commission have expressed their disapproval of digital currencies, calling the movement a “high-risk project with no benefit for the state.” This statement was also accompanied by the usual suspicion that cryptocurrencies aid criminal enterprise and substantially increase electricity costs.
Paraguay is one of several Latin American countries activelyexploring the regulation of digital assets. El Salvador began the trend of legalization in June 2021 by recognizing Bitcoin (BTC) as legal tender. Other countries with ongoing crypto regulation discussions include Brazil, Argentina, Uruguay, and Panama.
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The Ripple CEO reflected on crypto's presence at the World Economic Forum and the emerging use cases for digital assets.
Ripple (XRP) has announced a $100 million investment in the carbon trading segment, CEO Brad Garlinghouse told Cointelegraph’s Joseph Hall in an interview on the sidelines of the World Economic Forum (WEF) Annual Meeting, which concluded on Thursday.
Garlinghouse noted the rising profile of cryptocurrency at the international summit, comparing his experiences over the last several years. “As leaders across the world learn how these technologies can actually benefit their constituents, benefit their economies, they’re going to use them. […] I think we’re seeing that happen every day,” Garlinghouse said.
He went on to say that nonfungible tokens (NFTs) are “underhyped, in spite of the fact that there’s obviously a lot of hype in parts of the NFT market.” Specifically:
“The tokenization of various assets is underhyped.”
Garlinghouse cited carbon credit trading, which is often “challenged” by fraudulent activity, as a use case for tokenization due to its transparency and traceability. “It could really revolutionize carbon credit marketplaces, the efficacy of carbon credit marketplaces,” Garlinghouse said. Ripple is investing $100 million in the segment, he added.
Cryptocurrency will have some real use cases in 2022, Garlinghouse continued. Cross-border transactions are one such example that Ripple is working on. Currently, cross-border transactions are “usually quite slow, quite expensive and frankly very error-prone,” while the XRP chain has been “a very efficient, low-cost bridge,” he said.
“I don’t think we’re living in a single-chain world,” Garlinghouse said. “It’s a multi-chain world, there’re going to be a lot of different utility use cases.” Ripple will continue to focus on enterprise, but other cryptocurrency foundations are looking at consumers use cases as well, he explained.
The full conversation is on our YouTube channel. Be sure to subscribe!
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The move comes as part of a government effort-led to revitalize consumer spending as a zero-COVID policy has devastated the countries' economic hubs.
According to local news outlet Shanghai Securities News, the city of Shenzhen will airdrop 30 million digital Chinese yuan (e-CNY) to local residents in an attempt to revitalize consumer spending.
The airdrop is a joint effort between the city of Shenzhen and Meituan Dianping, China's leading food delivery app. As per instructions, users would need to first login to the Meituan app, sign up for the incentive, and then potentially receive the e-CNY rewards as part of a lottery draw.
If chosen, the e-CNY is then dispensed to users and can be spent at more than 15,000 in-app merchant terminals that accept the state-owned digital currency. Previously, the People's Bank of China had identified the e-CNY as a potential tool for advancing regional economies and improving the efficiency of select financial services. Meanwhile, sources at Meituan say that the e-CNY plays a vital role in boosting spending and revitalizing local businesses. Shenzhen is also currently one of three cities in China where residents can pay municipal taxes and charges with the e-CNY.
Unlike many other countries, China has stringently abided by a zero-COVID policy that has seen the repeated lockdown and closure of non-essential businesses in major financial hubs such as Shanghai. Last Wednesday, Chinese Premier Li Keqiang held an emergency meeting with top Communist Party officials to discuss the devastating economic impacts of the country's COVID policy. Amid economic shortfalls, 20 out of 31 Chinese provinces have issued "consumer spending incentives," such as the recent e-CNY airdrop, from January to April.
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At the other end of the table, centralized finance, or CeFi, where all processes are rooted through a central body, has endured a comparatively peaceful bear market, yet interest rates are trending down.
On the first of the month, investors who have an account with a CeFi provider such as Ledn, Celsius, BlockFi or Nexo generally receive emails detailing the interest rate for the following month.
A blow for those looking for passive income, the interest paid from CeFi providers has ground down since the 2021 bull market. Giving up custody of a crypto asset for a miserly interest payment has encouraged some crypto enthusiasts to take control of their private keys, even drawing comparisons to legacy banking.
In the table below, three of the largest custodians of Bitcoin (BTC) and crypto assets have fallen, taking into account both the interest rate and the amount of interest paid on each asset.
CeFi interest rates have all but trended down over the past year. Source: Data was taken from each individual provider’s site.
Cointelegraph spoke to three of the largest lenders of Bitcoin and other crypto assets to understand whether interest rates from CeFi providers may eventually hit rock bottom, aka 0.01% interest — like at banks — and why these lenders and interest providers exist.
Interest rates will continue to be attractive
Representatives from Ledn, Nexo and BlockFi agreed that while interest in crypto is lower, it outcompetes legacy lending. Mauricio Di Bartolomeo, co-founder of Canada-based Ledn, told Cointelegraph, ”We are still five to 10 years away from Bitcoin rates coming anywhere close to those of fiat bank accounts.”
“Most legacy bank savings accounts are paying out mere basis points (between 0.01% and 0.05%). Interest rates for our Bitcoin Savings Account product are still 5.25% APY for the first 0.1 BTC and 2% APY for balances above 0.1 BTC as of today.”
In a tweet thread, Di Bartolomeo shared that “changing market conditions” have obliged lenders to drop their rates, as the difficulty level of turning a profit on arbitrage opportunities and the futures basis trade has risen.
In simple terms - this means that market makers are also seeing their average returns get compressed.
Which forces them to have to lower their borrowing costs.
Jonathan Haspel, senior institutional trading associate at BlockFi, agreed, stating that “yield related to crypto interest-bearing accounts is impacted by a number of factors, including market sentiment, funding rates, supply and demand, and balance sheet optimization.”
“Ultimately, compressed rates and volatility are a sign of the asset class’s maturation. Where yield was once rampant and liquidity once sparse, there are more players in the crypto game feeding its competitive financing and widespread access.”
Bullish on CeFi: The future remains bright
Zac Prince, CEO of BlockFi, told Cointelegraph that he’s still “bulllish on [...] clients’ desire to earn crypto interest back for the long term.”
In a similar note of optimism, Nexo co-founder and executive chairman Kosta Kantchev told Cointelegraph, “‘The times, they are a-changing,’ but crypto yields are still multiple times higher than those of traditional banks.” In a nod to the price of Bitcoin flatlining at around the $30,000 mark, Kantchev said:
“While interest on some assets has become more stable, this mirrors the assets themselves. I think people largely overlook the sky-high rates on some of the newer assets on the block.”
Ultimately, and in agreement with Di Bartolomeo, “regardless of how historically volatile crypto has been, the opportunity is always there.” CeFi providers will continue to offer more attractive interest rates than legacy financial institutions.
It’s important to note that Nexo operates a different model, which would explain why rates are not technically dropping (as shown in the above table). Users experience higher rates of interest if they lock up the asset or hold a proportion of the Nexo token. Contrary to the other CeFi lenders, Kantchev explained:
“Rates are not dropping. It’s more that yields on older cryptos on Nexo are ensured to be sustainable in the long run, but the eyebrow-raising rates are often available either with Nexo Tokens through our loyalty program or for some of the newer coins for which we can generate such impressive yield.”
Growing adoption and innovation, anticipating regulation
That dropping rates should not be cause for concern: Per Di Bartolomeo, not only are centralized entities “instrumental to the adoption and evolution of Bitcoin as pristine collateral,” but legacy banks may even look to “partner” with CeFi players in the future. He said:
“This means that centralized lenders, like Ledn, will act as a conduit to bring legacy capital to Bitcoin — benefiting both Bitcoiners (by letting them borrow at increasingly better rates) and capital providers (by offering them a great risk-adjusted return).”
BlockFi’s Haspel agreed, “CeFi offers a compelling use case supporting crypto’s narrative for global monetary access.” Despite the turbulent waters the crypto industry treads in spring 2022, BlockFi sees “an increase in global demand for risk-managed crypto products — such as interest accounts — in other emerging digital assets.”
“While credit checks and a lack of financial history harm individuals seeking access to capital on a global scale, CeFi lending offers a solution. By utilizing crypto assets confirmed on a transparent and immutable ledger, CeFi protocols are able to quickly verify their possession.”
For Kantchev, innovation, customers and new products are right around the corner: “Compliant, sustainable interest products that address regulatory guidance while profitably paying customers will be one of the next such products.”
“The industry has matured tremendously, [...] so I’m convinced we will continue to find risk-free strategies that yield attractive returns and be able to share these with the community.”
Famed crypto and tech investor Tim Draper believes the retail purchasing power of women, paired with Bitcoin acceptance at merchant stores, could send the asset to new highs above $250K.
Renowned billionaire investor Tim Draper insists that a time will come when women begin driving up the price of Bitcoin as more retailers start offering it as a more cost-effective payment option at shops.
Draper, a Bitcoin (BTC) investor himself, told host Scott Melker on the Wolf of All Streets YouTube show last week that women could be key in pushing the largest crypto by market cap up to $250,000 per coin.
He reasons that as store owners begin to accept BTC as payment more widely, “all of a sudden, all the women will have Bitcoin wallets and they will be buying things with Bitcoin:”
“Then you’re going to see a Bitcoin price that’ll just blow right through my $250,000 estimate.”
Draper believes it is in retailers’ best interest to begin accepting Bitcoin sooner than later. He acknowledges that most store owners operate on low margins, so the reduced transaction fees compared to working with major credit card companies Visa or Mastercard could increase BTC’s incentives.
The average credit card transaction costs merchants up to 2.9% in-store and 3.5% online per purchase, according to CreditDonkey. By comparison, the average BTC transaction fee comes in at a flat $1.4 per transaction, according to Bitcoin data compiler BitInfoCharts.
Draper hints that the benefit to retailers is obvious. He said that women “control about 80% of retail spending,” and that retailers can save a lot on fees paid to credit card companies by choosing Bitcoin. Women constitute 30% of all crypto owners in the United States, according to The State of Consumer Banking & Payments by research firm Morning Consult.
The level of adoption that Draper hopes for may not be far off, as Morning Consult found that about 24% of American households own crypto, which is up 2% from July 2021.
If Draper is right, then it could start a cascade event which would also validate Mastercard CEO Michael Miebach’s prediction that the global payments system SWIFT would not exist in five years. Miebach made the shocking prediction last week at the World Economic Forum in Davos.
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Data on the most well recognized nonfungible token projects show that key metrics have fallen with floor prices and market capitalization over the past month.
“Blue-chip” nonfungible token (NFT) collections have seen their floor prices and market capitalization slide over the past 30 days, with some of the most well-recognized projects halving in value for these key metrics.
Data collected on key Ethereum NFT projects by DappRadar shows the floor prices of established collections such as CryptoPunks, Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC) and Moonbirds are at most down around 55% over 30 days.
The MAYC is the worst off of the four, with the floor price diving 55% to 16.7 Ether (ETH), or $31,300 at the time of writing. The more popular BAYC has fallen over 47% to 86.7 ETH, or $163,000, and CryptoPunks by almost 49% to 45 ETH, $85,000.
The only collection to gain in the month was Moonbirds, up 22% with a 19.6 ETH floor price, roughly $37,000 at the time of writing.
While the floor price for Moonbirds may be up, its market cap has fallen 55% to $368 million. The others have also tumbled, with the biggest losses being the MAYC, down over 71% to under $610 million, while BAYC and CryptoPunks were down 62% and 51%, respectively.
Despite the falling metrics, the collections still continue to dominate the top NFT sales over the past 30 days, with the most expensive being a BAYC NFT sold for 410 ETH on May 5, worth about $1.2 million at the time.
Free-to-mint collection tops charts
A free-to-mint NFT collection called Goblintown launched on May 22, now commands a nearly $50 million market cap and is in the top 30 NFT collections.
Despite the website stating that the NFTs have “No roadmap. No Discord. No utility,” Goblintown is in second place for volume over the last seven days at nearly $23 million, according to DappRadar, beating out collections such as Otherdeeds and the Bored Ape Yacht Club.
The collection features 9,999 goblins, which debuted without any real marketing, fanfare or the usual hype-building for an NFT project. The team behind Goblintown is not known and often post seemingly nonsensical and crude tweets from the official Twitter account.
Despite all of these factors, the floor price of the collection was 2.7 ETH, or around $5,000, on NFT marketplace OpenSea at the time of writing. The most expensive NFT sold from the collection has fetched a price of 69.4 ETH, or about $130,000.
Imagine working on a NFT project for months, setting up collabs with the biggest projects/alpha groups, getting 200K followers engagement farming WL spot giveaways, then after mint everyone bricks the floor under mint price
While it’s unclear what use Nike will put the domain to, the company has been investing in Web3 through the creation of multiple sneaker-based NFT collections with RTFKT, and has defended its claim to the space, taking a reseller of Nike NFT sneakers to court.
The purchase of this latest ENS domain brings the total owned ENS domains by the company to ten.
More Nifty News
The popular move-to-earn NFT game STEPN has banned users in China from its app to adhere to Chinese regulations. Mainland Chinese users make up 5% of the platform’s overall user base and STEPN’s founder has said the move will not have a significant impact on the firm’s finances.
The community for a Solana-based NFT game has dished out payback to a scammer after the developer of the game raised royalties to 98% on a batch of NFTs stolen in a Discord hack phishing scam. Community members bought back the NFTs to return them to their original owners while the hacker made a measly 2% on each sale.
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“Zero plans to buy luna 2.0, but I will dump any airdrop if I get something on Binance,” said Lark Davis.
The price of Terra (LUNA) has tanked around 70% since the re-launch of the Terra ecosystem via Terra 2.0 on May 28.
Under the revival plan of Terraform Labs founder Do Kwon, new LUNA tokens, also referred to as LUNA 2, are being airdropped to investors that previously held Luna Classic (LUNC), TerraUSD Classic (USTC) and Anchor Protocol UST (aUST).
The only reason to buy $LUNA 2.0 is to qualify for the next airdrop of $LUNA 3.0 after it goes to zero like $LUNA 1.0
According to data from CoinGecko, LUNA has dropped roughly 69% since its opening of $18.87 on Saturday to sit at around $5.71 at the time of writing.
LUNA/USD chart: CoinGecko
At this stage, the sharp plummet seems to suggest a relative lack of faith in Do Kwon’s revamp moving forward, with many investors indicating on Twitter that they are instead looking to recover a small portion of their previously lost capital and wipe their hands clean of the project.
Sold my available LUNA 2.0 airdrop → ETH @ $1,790.
I don’t see any fundamental here & I see whatever I get as bonus since I already wrote everything off as a loss & $0.
If not that the others are vesting, I’ll sell ‘em all.
Binance is set to begin a multi-year distribution of LUNA to eligible users starting from May 31, along with listing the token for trading via its Innovation Zone, a dedicated trading zone for volatile and high-risk assets.
Some people in the community who have outlined plans to eventually purchase LUNA once the carnage is over such as “lurkaroundfind” have predicted further bloodshed once the Binance drop goes live.
They pointed out that Binance has “15.7MM liquid LUNA, which will be available to users on Tuesday,” and suggested that investors who mainly used the Anchor Protocol will look to cash out as they have no real interest in the Terra ecosystem.
Analysts say the crypto bear market should not be feared because it offers potentially greater opportunities for growth and profits than a bull market, so traders should be taking note.
Crypto markets are undeniably bearish, but some industry insiders believe these conditions will shake out the bad actors and create greater opportunities for future participants.
Traders tend to lament the negative price action and relative difficulty in executing profitable trades in bearish market conditions. However, several leading analysts and builders agree that this is the time to make moves that will lead to the greatest gains when bullish sentiments return.
Polygon (MATIC) co-founder Mihailo Bjelic told CNBC on May 27 that the current downturn and recent major sell-off earlier this month were just what the market needed.
Bjelic believes that the market became “maybe a little bit irrational, or maybe a little reckless,” as the total crypto market cap grew by 12.5 times between November 2019 and November 2021, a tremendous growth rate that outpaced most other traditional markets.
“When the times like that come, [a] correction is normally needed, and at the end of the day [is] healthy.”
The market is in the midst of a major correction at the moment. Since last November, total market cap has dropped by 60% from $3 trillion to $1.2 trillion according to CoinGecko. Cointelegraph reported on May 28 that traders still expect more pain, especially considering the last bear market drew prices down about 80% overall.
Crypto market analyst The DeFi Edge added context to the idea that bear markets carry benefits that remain in line with the interests of most market actors. The account tweeted to its 164,000 followers on May 29 that “bear markets are healthy for the growth of crypto.”
This line of reasoning is based on the observation that fewer new market participants, which scammers see as potential targets, enter during a bear. Over the last year, Bitcoin (BTC) transaction volume peaked on Nov. 9 at 335,411, coinciding with the peak in price. On May 29, transaction volume was down by 38% to only 207,859 according to Blockchain.com.
Lower activity means less opportunity and reduced profitability to run many scams, so they tend to disappear.
Bear markets are healthy for the growth of Crypto.
Jason Ye, partner at crypto investment fund ROK Capital explained that although prices and activity are lower, bear markets represent prime times for traders and builders to lay the foundation for greater success when market sentiments reverse. He told Cointelegraph on Monday that “In a bear market, it is time to find the best fundamentals and focus on building a product.”
“It's time for traders to deploy their cash reserves in order to get an upside in the next bull cycle. As always, the winners in the bull market are the people who built in the bear market.”
Game Maker at Metaverse game platform Neo Tokyo, Alex Becker, echoed Ye’s notion in a tweet on May 28. He also believes that bear market buyers are the ones in the best position to turn a profit during the next bull. He said that “all the money is made buying in a bear market. Most losses come from buying in a bull market.”
Becker added that although buying low and selling high should be the key factor driving crypto market participants, he suggested that people on Twitter are the most disagreeable during a bear market, which he called “ironic.”
The funniest I’ve realized about crypto twitter is everyone gets toxic and bitter as fuck in a bear market.
Which is ironic because all the money is made Buying in a bear market.
Bitcoin is attempting to form a higher low at $28,630 and if that happens, ETH, XTZ, KCS and AAVE may rally in the near term.
After declining for eight successive weeks, the Dow Jones Industrial Average rebounded sharply last week to finish higher by 6.2%. However, Bitcoin (BTC) has not been able to replicate the performance of the United States equities markets and is threatening to paint a red candle for the ninth week in a row.
A positive sign is that Bitcoin whales have been buying the market correction. Glassnode data shows that the number of Bitcoin whale wallets with a balance of 10,000 Bitcoin or more has risen to its highest level since February 2021. The accumulation in the whale wallets suggests that their long-term view for Bitcoin remains bullish.
Blockware Solutions highlighted that the Mayer Multiple metric which compares the 200-day simple moving average with the current price was languishing “near some of the lowest readings on record.” The firm said a few other indicators also suggest that Bitcoin is attempting to form a bottom.
If Bitcoin starts a recovery in the short term, certain altcoins are likely to follow it higher. Let’s study the charts of the top-5 cryptocurrencies that may lead the relief rally.
BTC/USDT
Bitcoin remains stuck inside a tight range between the downtrend line and the support at $28,630. The bears pulled the price below $28,630 on May 26 and May 27 but could not sustain the lower levels. This resulted in a rebound on May 28.
BTC/USDT daily chart. Source: TradingView
The bulls will now try to push the price above the downtrend line and challenge the 20-day exponential moving average ($30,538). If they succeed, the BTC/USDT pair could pick up momentum and the rally could reach the 50-day SMA ($35,181).
The positive divergence on the relative strength index (RSI) suggests that the bearish momentum could be weakening and a rally may be around the corner.
On the other hand, if the price turns down from the overhead resistance, the bears will again try to pull the pair below $28,630. If they manage to do that, the pair will complete a bearish descending triangle pattern, which has a target objective at $24,601.
BTC/USDT 4-hour chart. Source: TradingView
The 20-EMA and the 50-SMA on the 4-hour chart have flattened out and the RSI is just above the midpoint, suggesting a balance between supply and demand.
If bulls drive the price above the downtrend line, the negative descending triangle pattern will be negated. That could result in a short squeeze as the short-term bears may close their positions. That could clear the path for a possible rally to the 200-SMA.
Conversely, the bears will come out on top if the price turns down and plummets below $28,630. That could result in a retest of the crucial support at $26,700.
ETH/USDT
Ethereum (ETH) has been in a downtrend but the bulls are attempting to stall the decline at the crucial support of $1,700. The price rebounded off this support on May 28 and the bulls are attempting to build on the recovery on May 29.
ETH/USDT daily chart. Source: TradingView
The RSI is forming a bullish divergence, indicating that the downtrend may be weakening. If bulls push the price above the 20-day EMA ($2,036), the ETH/USDT pair could rise to the overhead resistance at $2,159. The bears are expected to defend this level aggressively. If the price turns down from this resistance, the pair may remain range-bound between $2,159 and $1,700 for a few days.
On the other hand, if the price turns down from the current level or the 20-day EMA, the bears will again attempt to sink the pair below $1,700. If they succeed, the pair may resume its downtrend with the next major support at $1,300.
ETH/USDT 4-hour chart. Source: TradingView
The bounce off the $1,700 support has reached the 20-EMA where the bears may mount a strong defense. If the price turns down from this level, it could enhance the prospects of a break below $1,700. If that happens, the downtrend may resume.
Conversely, if bulls push the price above the 20-EMA, the pair may rise to the 50-SMA. This level may again act as a resistance but if bulls clear this hurdle, the pair could rally to the psychological resistance at $2,000.
XTZ/USDT
Tezos (XTZ) is consolidating in a downtrend. Although bulls pushed the price above the 20-day EMA ($2) on May 24, they could not sustain the recovery. The price dipped back below the 20-day EMA on May 26.
XTZ/USDT daily chart. Source: TradingView
The 20-day EMA is flattening out and the RSI is above 46, suggesting that the selling pressure is reducing. If bulls push the price above the 20-day EMA, the XTZ/USDT pair could rally toward the 50-day SMA ($2.45). If this resistance also gives way, the buyers will attempt to push the price above the uptrend line.
In contrast, if the price turns down from the current level, it will suggest that bears continue to defend the 20-day EMA. The sellers will then attempt to sink the pair below $1.75 which could open the doors for a fall to $1.64.
XTZ/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the recovery turned down from the 200-SMA but the pair bounced off the uptrend line. The bulls have pushed the price above the 50-SMA and will now attempt to clear the overhead hurdle at the 200-SMA. If they manage to do that, it will suggest the start of a short-term up-move.
Alternatively, if the price turns down from the current level or the 200-SMA, the pair may drop to the uptrend line. A break and close below this support could pull the price down to $1.61.
KuCoin Token (KCS) broke above the 20-day EMA ($15.61) on May 20 but the bulls could not push the price above the 50-day SMA ($17.19). This may have tempted short-term traders to book profits, which pulled the price back below the 20-day EMA on May 26.
KCS/USDT daily chart. Source: TradingView
The bears could not build upon their advantage and sustain the price below the 20-day EMA, indicating strong buying by the bulls at lower levels. The buyers have pushed the price back above the 20-day EMA on May 29.
If bulls sustain the price above the 20-day EMA, the possibility of a break above the 50-day SMA increases. If that happens, the KCS/USDT pair may rally to $18.44 and later to the 200-day SMA ($19.63).
Contrary to this assumption, if the price turns down from the current level, it will suggest that traders are selling on rallies. A break and close below $14.92 could open the doors for a further decline to $12.90.
KCS/USDT 4-hour chart. Source: TradingView
The pair has been facing stiff resistance at the 200-SMA but the shallow correction indicates that bulls are buying on minor dips. If bulls push the price above the 200-SMA, the next stop could be $17.14. A break and close above this level could start the next leg of the up-move.
Conversely, if the price turns down from the overhead resistance, the bears may pull the pair down to the 38.2% Fibonacci retracement level at $14.20 and then to the 50% retracement level at $13.30. This zone is likely to act as a strong support.
AAVE/USDT
AAVE rallied to the 20-day EMA ($101) on May 23 but the bulls could not push the price above it. This suggests that bears continue to defend the level aggressively but a minor positive is that the buyers have not given up much ground.
AAVE/USDT daily chart. Source: TradingView
If the price turns up and breaks above the 20-day EMA, it will indicate the start of a stronger relief rally. The AAVE/USDT pair could then rally to the 50-day SMA ($132) where the bears may again mount a strong defense.
Alternatively, if the price turns down from the current level or the 20-day EMA and breaks below $89, the short-term bulls who may have purchased at lower levels could close their positions. That could pull the price down to $79 and later to $64.
AAVE/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that the pair has been oscillating between $90 and $110 for some time. The 20-EMA and the 50-SMA are flattish and the RSI is just above the midpoint, suggesting a balance between supply and demand.
This equilibrium could tilt in favor of buyers if they push and sustain the price above $110. If they do that, the pair could rally toward $130 and then $143. Conversely, if the price plummets below $90, the bears will gain the upper hand. The pair could then decline to $80 and later to $70.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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With the market falling off a cliff, there will be big losses to claim on your taxes, right? Well, let’s break it down in detail.
Crypto volatility is nerve-wracking, and it may not be over yet. The turmoil may make crypto investors and crypto-related businesses less enthusiastic than when prices seemed ever to be climbing. With the market falling off a cliff, there will be big losses to claim on your taxes, right? Not necessarily. As your United States dollars shake out in the digital world, it is worth asking whether there is any lemonade you can make by claiming losses on your taxes.
First, ask what happened from a tax viewpoint. If you’ve been trading and triggering big taxable gains, but then the floor drops out, first consider whether you can pay your taxes for the gains you have already triggered this year. Taxes are annual and generally based on a calendar year unless you have properly elected otherwise. Start with the proposition that each time you sell or exchange a cryptocurrency for cash, another cryptocurrency, or for goods or services, the transaction is considered a taxable event.
That is a result of the U.S. Internal Revenue Service’s shot heard ‘round the world in Notice 2014-21 when the IRS announced that crypto is property for tax purposes. Not currency, not securities, but property, so most any transaction means the IRS wants you to report gain or loss.
Before 2018, many crypto investors claimed that crypto-to-crypto exchanges were tax-free. But that argument was based on section 1031 of the tax code. It was a good argument, depending on the facts and the reporting. But that argument went away starting in 2018. Section 1031 of the tax code now says it applies to swaps of real estate only.
The IRS is auditing some pre-2018 crypto taxpayers and, so far, doesn’t appear to like the 1031 argument, even before 2018. The IRS even released one piece of guidance saying that tax-free crypto exchanges don’t work. We may need a court case to resolve it if the IRS pushes it that far. After all, it only applies to 2017 and prior years, so it’s of diminishing importance.
But regardless of whether you use crypto to pay someone, swap crypto, or outright sell it, do you have gains or losses? For most people, gains or losses would be subject to short-term or long-term capital gains/losses based on the basis (what you paid for the crypto), holding period, and the price at which the cryptocurrency was sold or exchanged. Yet some people may have ordinary gains or losses, and that topic is worth revisiting. Are you trading in crypto as a business?
Most investors want long-term capital gains rates on gains if they buy and hold for more than a year. However, ordinary income treatment could be helpful for some, at least for losses. Securities traders can make a section 475 mark-to-market election under the tax code, but does that work for crypto? It’s not clear. To qualify, one must argue that the crypto constitutes securities or commodities.
The U.S. Securities and Exchange Commission has argued that some cryptocurrencies are securities, and there may be arguments for commodity characterization, too. It’s at least worth considering in some cases. However, in addition to establishing a position that a digital currency is a security or commodity, you would need to qualify as a trader in order to make a mark-to-market election. Whether one’s activities constitute “trading” as opposed to “investing” is a key issue in determining whether one is eligible to make a mark-to-market election.
The IRS lists details about who is a trader, usually characterized by high volume and short-term holding, although sometimes investing and trading might look rather similar.
If crypto turns out to be eligible for mark-to-market and if you qualify and elect it, you could mark to market your securities or commodities on the last business day of the year. Any gain or loss would be ordinary income, and gains, too. A benefit would be that the cumbersome process of tracking the date and time that each crypto was acquired and identifying the crypto you sold would not be required.
For most people, this election, if available, likely won’t make any sense, but as with so much else in the crypto tax world, much is uncertain. In the past, some drops in crypto value have been called a “flash crash,” an event in electronic securities markets where the withdrawal of stock orders rapidly amplifies price declines, and then quickly recovers. In the case of stock, the SEC voted on June 10, 2010, to enact rules to automatically stop trading on any stock in the S&P 500 whose price changes by more than 10% in any five-minute period.
A stop-loss order directs a broker to sell at the best price available if the stock reaches a specified price. Some people use the same idea with crypto. Some even want to buy the crypto back after a sale, and with crypto, you can do that. In contrast, with stock, there are wash sale rules, which restrict selling (to trigger losses) and buying back stock within 30 days. There are no wash sale rules for crypto, so you can sell your crypto and buy it right back without a 30-day waiting period.
This article is for general information purposes and is not intended to be and should not be taken as legal advice.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Robert W. Wood is a tax lawyer representing clients worldwide from the office of Wood LLP in San Francisco, where he is a managing partner. He is the author of numerous tax books and frequently writes about taxes for Forbes, Tax Notes and other publications.
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APE token holders make collective governance decisions, casting votes and deciding on issues such as fund allocation, rule framing, partnerships, project selection, and more.
The first quarter of 2022 was abuzz with the talks about ApeCoin (APE), a cryptocurrency adopted to be the native coin of Bored Ape Yacht Club (BAYC), developed by Yuga Labs. Since the ApeCoin DAO came into being in April 2021, the BAYC has been among the top nonfungible token (NFT) collections with a vibrant community.
The BAYC collection showcases apes that seemingly look bored. Depending on your mood and choice, you can choose these apes down to the tiniest details. Investors across the world have put their money into these artworks and the buyers include the likes of Justin Bieber and Eminem.
As an ERC-20 governance and utility token of the APE ecosystem, ApeCoin is administered by a decentralized autonomous organization, or DAO. Anyone holding the coin is allowed to cast their vote on the relevant governance decisions.
The fact that APE is adopted by Yuga Labs gives it heft, as it also has CryptoPunks and Meebits, two other frontline NFT projects.
What is the APE ecosystem?
You might be interested in who is behind ApeCoin. The community holders of ApeCoin and various products/services using the cryptocurrency collectively make up the APE ecosystem. Yuga Labs, founded in 2021 and headquartered in Miami, Florida, is a prominent name in NFTs and digital collectibles.
Acclaimed as a creator of the Bored Ape Yacht Club, Yuga Labs serves as a community member in the ApeCoin DAO. They have adopted ApeCoin as their primary token in the projects they undertake. Let’s learn concise information about the NFT collections that are a part of the APE ecosystem.
The BAYC
Launched in April 2021, Bored Ape Yacht Club (BAYC) features 10,000 unique Apes residing on the Ethereum blockchain. Each of these unique digital collectibles features a different look, style and rarity. The collection showcases algorithmically generated profile pictures of cartoon apes.
Mutant Ape Yacht Club (MAYC)
As an NFT basket of up to 20,000 mutated versions of the BAYC Apes, the MAYC helps onboard new members to the Ape community. Original BAYC NFT holders were handed 10,000 mutant serums in three tiers via airdrop to add the rarity of traits.
Bored Ape Kennel Club (BAKC)
Launched at 6:00 pm EST on June 25, 2021, the Bored Ape Kennel Club (BAKC) is an assortment of dog NFTs made available to every single member of the BAYC. Holders of each Bored Ape NFT can adopt a random Club Dog NFT, while just paying for gas. BAKC NFTs also have their own rarities.
Otherside metaverse
At the end of April 2022, Yuga Labs began minting Otherside metaverse lands. Within 45 minutes, the virtual real estate clocked the value of $100,000 and raised a total of $320 million, making BAYC the NFT garnering the maximum sales.
How does APE work?
APE token holders take governance decisions collectively, casting their votes and deciding on issues like allocation of funds, framing of rules, partnerships, project selection and more. The ApeCoin Foundation implements the governance decisions taken by the community.
As the legal representative of the DAO, the ApeCoin Foundation facilitates the growth of the ecosystem. The Foundation has a special body called the Board that executes the community’s visions. The APE Board comprises five members from the technology and crypto community. ApeCoin holders vote for the new Board members annually.
As a governance and utility token, ApeCoin serves multiple purposes in the ecosystem. ApeCoin use cases include enabling holders to participate in the governance of the DAO and enabling them to access exclusive features of the ecosystem, such as games, events, merchandise and services.
Third-party developers use ApeCoin to play a role in the ecosystem and incorporate the token into their services, games and various projects. For instance, in Animoca Brands’ Benji Bananas, a play-to-earn (P2E) mobile game, the coin is adopted as an incentive for players. They will be able to earn special tokens when playing and swap these tokens for ApeCoin.
With ApeCoin set to be integrated with the upcoming metaverse Otherside, which could make it a high-in-demand metaverse coin this year. This will make ApeCoin a transaction token on metaverse marketplaces. If the Metaverse incorporates P2E elements, it might also be used for rewarding players.
ApeCoin tokenomics
ApeCoin has a total supply of 1 billion tokens. The contract interface disallows the minting of any more tokens, thus instilling a cap. There is no burning mechanism as well, so the supply won’t go down. The distribution of the available tokens is as follows:
62% of the tokens are allocated to the ApeCoin DAO community. Between it, 15% finds its way to holders of BAYC and MAYC. Holders of BAYC can claim 10,094 APE for each NFT they own, while MAYC holders are entitled to 2,042 APE. The remaining part will be released as a component of the DAO’s ecosystem fund.
16% of the tokens will flow to Yuga Labs. A part of this allocation will go toward the primatologist Jane Goodall’s charity foundation. 14% of the tokens are for the people who contributed to the launch of the ApeCoin protocol.
8% of the tokens have been set aside for the four founders of Yuga Labs and BAYC. ApeCoin follows the concept of locked tokens to prevent Yuga Labs, the founders of BAYC, and other launch contributors from selling their holdings. ApeCoin allocations to them aren’t unlocked for at least 12 months. After this duration, a specific allotment of tokens becomes accessible to them on a monthly basis.
How to buy ApeCoin?
You can buy ApeCoin on a crypto exchange, generally through a three-step process:
Sign up: On the sign-up page, put in your email address, contact number and a user name. The system will verify your email ID and prompt you to enter a strong password.
Complete KYC: Most regulatory domains require the users to complete the Know Your Customer (KYC) process. You will need to upload your ID and other required documents, and your account will get going in a few minutes.
Buy ApeCoin: You can now deposit your fiat and buy as many ApeCoin as you want.
Is ApeCoin a good investment?
The fact that ApeCoin has been issued by a dynamic online community like the Bored Ape Yacht Club has given it streams of takers right from the start. Aficionados of arts, culture, gaming and entertainment are more likely to use the cryptocurrency. Metaverse land sales will also boost the coin.
There are several reasons to purchase ApeCoin such as using APE as a payment option, NFT rewards and to access exclusive features in the APE ecosystem provides the buyers several reasons to purchase it. All these factors notwithstanding, the coin is intrinsically associated with NFT-related volatility, which you need to be careful about.
The way ahead
At a time when NFTs are still storming the crypto arena, ApeCoin has managed to steal the limelight since its appearance. The token creators have used several incentives to promote its utility such as allowing the third-party developers to integrate the cryptocurrency into their projects and setting up an ecosystem fund to support the projects using the coin.
With use cases spanning from decentralized payments to land sales on metaverse, the company has a range of supportive components in place. As the APE ecosystem grows, ApeCoin earns more value than can be realistically expected.
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Coming every Saturday,Hodlers Digestwill help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more a week on Cointelegraph in one link.
Venture capital player Andreessen Horowitz, or a16z, has unveiled a new $4.5 billion cryptocurrency fund. The a16z fund is the fourth of its kind and more than double the amount of its third crypto investment fund. With $3 billion earmarked for venture investments and $1.5 billion for early-seed projects, the fund will look to invest in companies at various stages in their life cycle. Andreessens new fund provides a strong indicator that venture capital interest in the crypto market remains high despite evidence of a brutal bear market.
A client-focused note from JPMorgan this week detailed the banking giants thoughts on Bitcoin, claiming $38,000 as the assets fair value. The seemingly bullish outlook came on the heels of depressed price action for Bitcoin, which has been rangebound below $30,000. But even in February, when BTC was valued at $43,000, JPMorgan strategists said that $38,000 was fair market value. This weeks client note from JPMorgan also pointed to the possibility of positive price action for the entire crypto space provided venture capital investment doesnt waver.
Per comments from vice president Richard Nash, PayPal has its sights set on giving its platform more blockchain and crypto influence. Just walking slowly in the crypto shield with buy/sell/hold in certain jurisdictions, Nash told Cointelegraph at the World Economic Forum (WEF) in Davos, Switzerland. And then looking to work with others to embrace everything we can, whether itd be the coins that we have today in PayPal digital wallets, private digital currencies or CBDCs in the future.
With time ticking down until GameStops NFT marketplace launch, the company has unveiled the beta version of an Ethereum-based wallet. The self-custody crypto and NFT storage solution is called the GameStop Wallet. The browser-based wallet will go hand-in-hand with the companys future NFT marketplace. GameStop is also developing a mobile app version of the wallet.
Koreas Financial Supervisory Service (FSS) is working to standardize its evaluation of digital asset risks in the wake of the Terra ecosystem collapse. While the FSSs standardization efforts have only just begun, they are expected to lead to a legal framework for evaluating digital assets. Meanwhile, Terraform Labs CEO Do Kwon is moving ahead with an ecosystem recovery plan, having gained majority support from his community. The Terra 2.0 ecosystem went live on Friday with a new blockchain and crypto asset.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at$28,449, Ether (ETH) at$1,729andXRPat$0.37. The total market cap is at$1.17trillion,accordingto CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are BORA(BORA)at 18.15%, Bitcoin Gold(BTG)at 17.79% and Ethereum Classic(ETC)at 11.09%.
The top three altcoin losers of the week are TerraClassicUSD(USTC)at -46.13%, STEPN(GMT)at -27.38% and Elrond(EGLD)at -25.70%.
In TradiFi people are thinking, I dont want to lose money how can you help me keep my wealth regardless of markets? So, its very risk-management orientated. While in DeFi, the degens are like, Gimme those triple-digit yields, woo!
The rise of the term Web3 is encouraging because it means that people are seeing this underlying technology feed into different applications the ones they didnt necessarily expect.
Bitcoins price has continued to struggle in recent days, often trading below $30,000, according toCointelegraphs BTC price index. However, the asset could still fall considerably further, according toRekt Capital.
Over the course of Bitcoins history, the assets price has respected the 200-week moving average (200WMA). #BTC tends to wick -14% to -28% below the 200-MA, Rekt Capital detailed as part of a thread on Twitter. And since the $BTC 200-MA now represents the price point of ~$22000… A -14% downside wick below the 200-MA would result in a ~$19000 Bitcoin, they added. And if #BTC were to repeat the March 2020 downside wicking depth below the 200-MA $BTC would revisit the ~$15500 price point.
Did you watch a video of Tesla CEO Elon Musk advertising 30% gains via deposits on a crypto platform? Be warned that the video is a scam. Classified as a deepfake, the video was doctored to look real but is not, as verified by a Twitter comment from Musk himself. The video harnesses real footage of Musk doing a TED Talk earlier in 2022, altered to deceive viewers into a scam. Deepfakes are nothing new, however. This recent effort utilizes Musks fame in tandem with his known crypto involvement.
The last two years have resulted in a 3,894% uptick in crypto-related spam, according to recent data from LunarCrush, a crypto intelligence outfit. One aspect making detection difficult: The undesirable action is not all bot related, with a surprising amount coming from humans. Twitter is a hotbed for spam, based on the LunarCrush data.
A hacker or group of hackers recently took over the Twitter account of Mike Winkelmann, a.k.a. Beeple. The hacker(s) that commandeered the well-known NFT artists account posted phishing scam tweets, angling the scam around Beeples recent collaboration with Louis Vuitton. Although Beeple managed to take back control of his Twitter account, the phishing effort pilfered roughly $438,000 worth of Ether and NFTs from victims.
Three years and BOOM, you can be anything you want a famous musician, a billionaire. It doesnt matter what you want to do, anything can be done with the right mindset.
