Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
Amid the threat of a crypto ban in Russia, president Vladmir Putin may have given crypto enthusiasts in the country a reason to be optimistic. At a 26 Jan government video conference, he broached the topic of crypto regulation and acknowledged “certain competitive advantages, especially in so-called ‘mining'”. He encouraged Russia’s Central Bank to meet with his government soon, in the hopes of reaching a consensus on crypto use, and assured his parliamentarians that the bank did not “stand in our way of technical progress”. He did however concede that broadening crypto use “carries certain risks” due to its “high volatility”.
Blockchain Technology Association of Nigeria (SIBAN) leader Senator Ihenyen has implored the country’s lawmakers to establish laws for crypto regulation. Currently, lawmakers are debating a bill that proposes a 10-year jail term for Ponzi scheme operators but that makes no explicit mention of crypto. Ihenyen said that though crypto Ponzi schemes have dominated the headlines recently, some of these schemes were later discovered to be unrelated to crypto, except that it was used to collect victims’ funds just as fiat currencies could have been used to do so. He added that “as long as this (proposed law) seeks to protect investors and consumers, it is welcomed”.
According to a new Chainalysis report, $8.6 billion in value was laundered through cryptocurrency in 2021, a 25% increase from 2020 but still well below the high watermark in 2019, when $10.9 billion in value was laundered via crypto. The report’s estimates show that a total of $33.4 billion in crypto has been laundered since 2017, which still pales in comparison to the $2 trillion in fiat laundered annually through offline crimes like drug trafficking. Furthermore, the amount of fiat laundered may be even higher as cash used in offline crimes is mostly untraceable, while the “inherent transparency of blockchains” makes criminal activity in crypto easier to trace. Chainalysis also said mining pools, high-risk exchanges, and mixers “saw substantial increases in value received from illicit addresses”.
Coinbase is preparing to list Solana ecosystem tokens, allowing withdrawals of SPL (Solana Program Library) tokens. According to one of the sources, Solana-native USDC will be among the supported assets. This would mark a major development in Coinbase’s token onboarding strategy, as the exchange has so far listed only Ethereum-based coins and flagship Layer 1 assets like Cosmos (ATOM) and Algorand (ALGO). Coinbase itself has declined to comment.
The value of Tesla’s (TSLA) Bitcoin holdings at the end of Q4 2021 remained unchanged year-on-year at $1.26 billion, according to its quarterly earnings report. Tesla had purchased $1.5 billion worth of Bitcoin in Feb 2021 before shrinking its position by 10% later in Q1 2021 to boost its quarterly earnings by $272 million. The company did not buy or sell any Bitcoin in Q2 or Q3 but had reported a $51 million impairment in Q3 as Bitcoin’s price fell. Its adjusted Q4 earnings per share came in at $2.54, higher than the $2.36 analysts had predicted.
Show me the money
Predictions calling for the onset of an extended bear market may have been premature as crypto prices appear to be recovering, after the US Federal Reserve implied that interest rates would remain near 0% for the time being. BTC saw an increase of 4.11% that triggered momentum that lifted a majority of tokens in the market, while ETH’s price rose by 8.11% to a daily high of $2,273.
According to data from Huobi Global, however, BTC later proved to be volatile after briefly reaching 38,900 and then falling sharply to near 36,700. Similarly, ETH’s rise to 2,273 was followed by a fall to near 2000, with daily charts showing signs of a downward trend.