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ETFS 21Shares Crypto Monitor - 9th June 2022


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This Week in Crypto

Last week saw companies in the cryptoassets industry cut up to 10% of their staff, which is not a new phenomenon to bear markets in this industry. In a more hopeful turn of events, China’s scaling back its lockdown measures possibly triggering NASDAQ100 and S&P500 to rise last week and providing a catalyst for risk assets including cryptoassets to follow suit. All eyes are on the US Consumer Price Index (CPI) report, coming out on June 10. May’s CPI report would provide the data necessary for the Federal Reserve to dictate how aggressive they will be with the next interest rate hike scheduled to take place in June.

Regulations and Adoptions

On June 2, Lawmakers in New York City passed a bill suspending proof-of-work mining operations, that rely on carbon-based fuel, for two years. The bill is currently on its way to New York’s Governor Kathy Hochul, who could sign it into law or veto it. In effect, new applications for mining facilities will not be approved and those of existing ones will not be renewed, unless they run 100% on renewable energy. Over the past few months, Bitcoin miners based in New York could tell a ban was approaching and already started moving to crypto-friendlier jurisdictions around the US such as Texas, leveraging the state’s cheap and abundant electricity. In consequence, New York’s share of the Bitcoin mining network dropped from 20% to 10%.

Binance has been facing some regulatory scrutiny as reports revealed that it has served as a conduit for the laundering of at least $2.35B in 5 years. However, its CEO, published a transparency report to refute these claims. The Securities and Exchange Commission (SEC) is allegedly probing Binance’s native token BNB for potential violation of securities regulation.

To protect investors from the repercussions of another crash like UST’s, Japan passed a bill limiting stablecoin issuers to licensed banks, registered money transfer agents and trust companies.

With regards to adoption of cryptoassets, received a provisional approval of its Virtual Asset MVP license from Dubai’s Virtual Assets Regulatory Authority (VARA), giving the Singaporean crypto exchange the opportunity to scale in the region.

Nigerian blockchain advocacy group, initiated by the president’s office, is introducing a code of conduct for VASPs with the purpose to make Nigeria the world’s safest and biggest blockchain space with the largest blockchain solutions, investments, and adoption. This comes after a national campaign to steer investors away from cryptoassets and more towards Nigeria’s brand new central bank digital currency (CBDC), which was blamed to be taking a toll on the country’s fintech industry.

Technical and Onchain Indicators

Figure 1: Bitcoin Miners Selling Off Their HoldingsBitcoin_miners_selling_off_their_holdings_b341f1f279.png

Source: Compass Mining

Data collected by Bitcoin mining services company, Compass Mining, indicate that Bitcoin held by miners are being sold off to the open market and has in fact reached an all-time high. As energy prices skyrocket – on the back of the Russo-Ukrainian conflict – and Bitcoin becoming less profitable for miners, selling off holdings would be a better option as opposed to shutting down the mining facilities.