Around the Blockchain with Huobi Learn (10 Feb 2022)

Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
Russia’s government and central bank in have reached an agreement on crypto regulation and are currently working on a draft law that will define crypto as an “analogue of currencies”, as opposed to digital financial assets. The law is set to be implemented on 18 Feb and will see crypto function legally only with complete identification via the banking system or licensed intermediaries. Following this news, ETH began trading above $3,241 and BTC above $44,000, a respective increase of 3.4% and under 1% over the last 24 hours.
Just weeks before El Salvador is to start issuing its BTC bond, ratings agency Fitch has downgraded the country’s long-term foreign currency IDR (issuer default rating) from B- to CCC. This downgrade reflects “heightened risk stemming from increased reliance on short-term debt, limited scope for additional local market financing, uncertain access to additional multilateral funding and external market financing, given high borrowing costs”. Currently, El Salvador faces a financing gap of $1.2 billion this year, which will rise to $2.5 billion next year, when it will face almost $1.2 billion in external debt amortizations in 2023 (with $800 million due in Jan).
The UN’s International Telecommunication Union (ITU) has approved Tencent to lead a project exploring the creation of a standard technical and security framework for NFTs, marking the world’s first UN-approved standards initiative for NFTs. Tencent said in a statement that the project “aims to specify the technical architecture, technical flows, functional requirements and security requirements for blockchain-based digital collectibles” that could “drive a consensus and common understanding around the world on the formation of a technical framework for digital collection services”. Tencent will collaborate with companies on the initiative, such as the Chinese Academy of Information and Communications Technology, Beijing University of Posts and Telecommunications, and Alibaba affiliate Ant Group.
Multi-national luxury auction company Sotheby’s has announced its plan to auction a lot of 104 NFT Cryptopunks, which is expected to fetch around $20 million to $30 million. The auction will take place on 23 Feb. Originally bought in July last year for $7 million in a single Ethereum block, reports at the time said the buyer purchased the NFTs by paying the miner a bribe of 5 ETH; this acquisition then increased the floor price for the whole collection of 10,000 Cryptopunks. Today, a Cryptopunk’s floor price is about $200,000.
The Central Bank of Ireland has said in a report that it is unlikely to approve investment funds for retail investors as they do not know how to navigate the high-risk asset class. The report stated that crypto assets were a “potential threat to investor protection” that may be suitable only for wholesale or professional investors and not “a retail investor without a high degree of expertise”. Patricia Dunne, Ireland’s Director of Securities and Markets Supervision, said there were “too many unanswered questions around things like custody, money laundering and even just volatility and liquidity” around retail crypto investing.
Show me the money
According to data from the Huobi Global, BTC rose to around 44,800 last night before falling back slightly, while ETH continued to rise last night and encountered resistance near 3,270. Both are seeing relatively sluggish trading volume and daily charts are showing signs of an up-trend. In terms of contracts, Huobi Futures data showed stable open interest (OI) for both BTC and ETH futures, with slightly decreased volume amid a relatively inactive contract market.
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