Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
The Biden administration is reportedly preparing a government-wide digital asset strategy as an executive order. The finalized strategy, which also covers crypto, is expected to be presented to President Joe Biden soon, and could be released as soon as next month. It will detail economic, regulatory and national security challenges posed by crypto, and direct federal agencies to share their assessments of crypto’s risks and opportunities in H2 2022.
Telegram founder Pavel Durov and Leonid Volkov (chief of staff to imprisoned Russian opposition leader Alexei Navalny) have criticized Russia’s Central Bank’s proposed blanket crypto ban. Durov said such a ban would “destroy a number of sectors of the high-tech economy” and would be “unlikely to stop unscrupulous players” but instead, would “put an end to legal Russian projects in this area”. Volkov said a crypto ban would be “impossible” in essence, and that though it could make depositing funds on crypto exchanges “very difficult”, this gap would be filled by intermediary services facilitating such transactions “through foreign jurisdictions”.
Switzerland’s largest bank, UBS, has warned of a ‘crypto winter’ that could see prices crash and take years to recover. The bank’s analysts, led by James Malcolm, explained in a note to clients that the US Federal Reserve’s interest rate hikes will likely make crypto less attractive to investors. They emphasized that regulation is a major hurdle for crypto, saying that widespread speculation “inevitably invites closer oversight to guard consumers” and “protect financial stability”. They added that “high-flying stablecoins and DeFi projects seem almost sure to face bigger setbacks from authorities in the coming months”.
Bitcoin is on track to see its worst weekly performance in eight months, dropping 19% to just below $35,000 in the past seven days. This comes after margin calls resulted in over $1.5 billion of BTC trading positions being liquidated over the last three days. Traders seem to be pricing in fears that the Federal Reserve will soon introduce stricter monetary conditions, and BTC’s price is now at its lowest since July 2021. These developments also inspired much gallows humor on social media, with one user saying that BTC’s price chart had created a pattern that looked like Pikachu’s pointed ears.
Billion-dollar companies are dominating the Metaverse in light of increased consumer interest in virtual, interactive, 3D online experiences. Research firm Strategy Analytics has said the international Metaverse market is forecasted to reach almost $42 billion by 2026, a likely scenario considering how NFTs within virtual ecosystems allow businesses to monetize assets across a blockchain network, enhancing interactivity for consumers and fans. Adrian Baschuk, founding partner at NFT platform Ethernity Chain, said, “Just as every company and individual has adopted some form of social media, this will also be the case for NFTs and the Metaverse.”
Show me the money
According to data from Huobi Global, BTC continued its rapid decline over the weekend to reach a low of 34,000 USDT before recovering slightly. There may be a short-term up-trend and can stabilize if there is support above 35,000, but the unusually swift dip is rare even in the current bull market. The price of ETH did not fare much better, dropping over the weekend with no rebound in sight. Daily charts show strengthened short-term momentum but the slight downward trend is expected to continue.