Crypto space top news review
When you start viewing the news of the crypto industry, sometimes there is a feeling that they are written according to some scenario: science fiction, with action elements. Judge for yourself: China is completely clearing its financial and digital space for the digital yuan, using Bitcoin and other cryptocurrencies, and the crypto space is already beginning to benefit from this.
And so, what interesting things happened during the week:
Banning Bitcoin in China is a Huge Opportunity for Canada
China has recently taken a tough stance on Bitcoin mining, and several provinces of the country have completely banned mining. The sudden offensive of the Chinese government led to a sharp drop in the hashing speed or computing power of the Bitcoin network. According to Bitinfocharts, on May 13, it was still about 170 exahashes per second (EH/s), and last week it fell below 60 EH/s, that is, a drop of at least 65%.
This led, among other things, to the largest negative adjustment of the mining difficulty in history, that is, to an automatic adjustment of the difficulty level. Last Saturday, it fell by a whopping 27.94%, it was the largest decline in history. The situation also caused a drop in the Ethereum hashrate( ETH), as well as a panic in the market, and a drop in prices.
Gradually, many miners are leaving China, but it may take some time before we see a full recovery. One of such companies is IBC Group, this large mining company announced on July 5 in a press release that it will also move from China to Canada.
It is estimated that the PRC accounted for more than 50%, perhaps even 65% of all Bitcoin mining in the world, and there were many concerns about centralization. Billionaire and CEO of Galaxy Digital Mike Novogratz recently called the move ” a net positive for the ecosystem”. MicroStrategy CEO Michael Saylor even called it China’s “trillion dollar mistake”. The Bitcoin ETF in Canada has also recently seen an influx of large amounts.
CEO of Celsius expects Ethereum to Overtake Bitcoin
The “coup” of Ethereum has already begun, if it depends on the CEO of the Celsius Network, Alex Mashinsky.
The Celsius Network is a platform with all types of financial services. This allows users to lend their cryptocurrencies to other users and receive interest on them. The Celsius Network also offers lightning-fast transactions. It is reported that the network has more than a million users.
And these users offer Mashinsky valuable information about what people really think about a particular cryptocurrency. In an interview with Kitco News, the CEO was asked if he expects that Ethereum will eventually overtake Bitcoin? According to Mashinsky, Ethereum is already working on this. This can be seen from the events in the Celsius Network:
“How much in dollar terms do these millions of users have? Do they have more Bitcoin or more Ethereum in dollar terms? Ether has overtaken Bitcoin for the first time in the last two months. For the first time, our million users had more ETH than BTC. We manage customer deposits worth about $17 billion, and the number one currency is Ethereum.
Mashinsky expects that although both Bitcoin and Ethereum will become more widespread in the future, there is one key difference. According to the CEO, more people will want to make a profit, and given that the decentralized finance sector (DeFi) is largely based on Ethereum, people are more likely to choose Ether. Mashinsky expects that Ethereum 2.0, the main update, will play an important role in implementing this change.
In addition to the platform with financial services, Celsius is also engaged in mining. She recently invested $200 million to open a mining company in Canada. But that’s not all: “We are investing another $60 million, most of which goes to Canada, some to the United States. This makes us the largest miner in North America”.
BTC received as a salary may soon become possible in Argentina
In Argentina, it will soon be possible to receive a salary in BTC. At least when you work in the export sector. A member of the National Congress of Argentina has introduced a bill on paying employees with cryptocurrency.
Congressman Jose Luis Ramon called the possible crypto law suitable for people from the export industry. He is talking about employees who depend on the employer, so there is no sole proprietorship. If the law is indeed passed, these employees will have the opportunity to receive part of their salary in Bitcoins or other cryptocurrencies. This is an option, since they can also receive Argentine pesos, as they are now.
In his statement, Ramon said the following:
“The idea is that employees can strengthen their autonomy and maintain the purchasing power of their wages. This initiative stems from the need to promote greater autonomy of wages and management, withoutentailing the loss of rights or exposure to situations of abuse in labor relations”.
In December 2019, the National Congress of Argentina adopted a law according to which foreign currency is taxed at a rate of 30%. BTC and cryptocurrency in general cannot be subject to the same law. Income from abroad must be converted into Argentine pesos. This does not apply to income paid in cryptocurrency, so the tax benefit can be huge. This is reported by the Argentine newspaper La Nueva Mañana.
Before a cryptocurrency law can be passed in Argentina, there must first be a majority in the Senate and the House of Representatives. It remains to be seen whether this will actually happen.
2 billion euros of German capital can now be invested in Bitcoin
Buying BTC in Germany through institutional investment funds is now possible thanks to the new policy. This is a big step towards the adoption of cryptocurrency in the largest economy of the European Union. However, German regulators still urge caution when it comes to cryptocurrencies.
In accordance with the new policy, institutional mutual funds can now invest 20% of their investments in cryptocurrencies. The German financial markets regulator BaFin has long been planning to take a neutral position regarding Bitcoin and cryptocurrencies in general. These new rules should take care of that.
BaFin has spoken negatively about the cryptocurrency market in the past. Then the financial institution warned about its instability and riskiness. However, with the help of new developments, they also want to show that they want to stimulate the growth of investments in crypto assets in the future. However, it will be difficult to completely get rid of the notorious German vigilance that people in Germany experience.
The new rules were announced at the end of April, and now it’s time to integrate them. The new policy applies to companies associated with the so-called “Special Fund”. Allianz Insurance Company is the largest of the affiliated companies. According to the German Trade Association BVI, the value of total assets in the first quarter of 2021 will be about two trillion euros. Now that some of these assets can be converted into cryptocurrency, this amount can grow faster.
It is clear that Germany is taking steps to introduce cryptocurrency. Since 2020, no cryptocurrency exchange in the country can be launched without a license. At the end of June, BaFin awarded such a license to Coinbase, one of the largest exchanges in the world. As a result, Coinbase can now also be active in Germany, and it was the first to do this.
In addition, Germany is also taking smaller steps to make the blockchain more attractive to the general public. For example, students who recently graduated from high school were able to get their diplomas using blockchain technology.
BTC: Analysts expect that there is a supply shock
The price of Bitcoin in recent days looks like the value of the asset should look like in a bear market, moving in the range of $35,000-32,000. Despite this bearish picture, network analyst Willy Wu remains optimistic in the long term.
Willy Wu is a well-known analyst in the crypto community. He often shares interesting analyses with his more than 600,000 followers. He also shared some interesting tweets. But first, what is a “network analyst”?
Cryptocurrencies such as Bitcoin are based on blockchain technology. This technology provides a decentralized registry management. Anyone can view this ledger and see which transactions and where they take place and which wallet address contains how much BTC. Analysts like Wu analyze this data and make statements about it.
In his tweet, Wu sees that “coins are being taken from exchanges at a very optimistic price”. More coins have been withdrawn in recent days. As the price moves in a sideways bearish direction, coins are bought from the exchanges at a very bullish rate.
The Bitcoin supply shock continues, as Wu indicates the so-called “BTC supply shock coefficient”. This is the ratio of coins on exchanges to the total stock. Reflecting this indicator, the relationship with the Bitcoin price is clearly visible. Wu makes his conclusion:
“The quantitative supply shock continues. The last time I saw this, the price needed some time to bounce back (October 2020); then it jumped a lot”.
In short, investors continue to withdraw Bitcoins from exchanges, and the analyst sees two optimistic reasons for this. First, it is likely that these investors will keep their BTC for a longer period. They want to store the crypto asset in a safe place, and therefore send them to their wallet.
Secondly, a sudden collapse in prices becomes less likely, since investors have less BTC on exchange accounts.
Wu ends a series of his tweets:
“Anyone who stretches this market will end up in a short position at some point. We have to wait until the basics win”.
China blocks Binance Cryptocurrency Exchange
Once again, the world’s largest cryptocurrency exchange is under heavy fire. Although it was announced earlier this week that the UK, Thailand and the Cayman Islands have pounced on Binance, now we can add China to this list.
It is not surprising that now it is China’s turn to make Binance’s life unbearable. The PRC has been working for some time to remove everything related to cryptocurrencies from the country. This time it was Binance’s turn. Recently, it became clear to many users of the crypto exchange in the Middle Kingdom that they no longer have access to the website and application.
It is interesting to note the fact that other exchanges in China are still available. The competing exchanges Huobi and OKEx have not yet been affected. Whether this will continue, of course, is still unknown, but it is unlikely.
Initially, Binance was based in China. However, in 2017, the crypto exchange moved to the Cayman Islands due to, among other things, the critical attitude of the Chinese government towards the exchange. Since then, Binance has been criticized, and Binance’s fear, uncertainty and doubts (FUD) have become a common topic in the crypto news cycle.
The ban on Binance is the latest event in the Chinese government’s struggle with the world of cryptocurrencies. Firstly, the miners were ordered to leave en masse as soon as possible, and now crypto exchanges are no longer safe in this country.