Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
G7 countries have issued a joint statement that they “will ensure” the “Russian state and elites, proxies and oligarchs cannot leverage digital assets as a means of evading or offsetting the impact of international sanctions”. The statement further says the G7 nations will “impose costs on illicit Russian actors using digital assets to enhance and transfer their wealth”. Following this, Japan has asked crypto exchanges not to process transactions involving crypto assets subject to asset-freeze sanctions against Russia and Belarus. A senior official at Japan’s Financial Services Agency (FSA) said this move was meant to “keep the G7 momentum alive”. Anyone responsible for unauthorized payments to sanctioned targets can be imprisoned for up to three years or fined ¥1 million ($8,487.52).
For the first time since the onset of COVID-19, the US Federal Reserve is expected to increase its target fed funds rate on Wednesday. This has sparked a flurry of reactions across the crypto, commodities and stock markets — while crypto saw reduced volume and stocks were in the red last week, commodities saw a significant rise in value during the same period. Oxbow Advisors managing partner Ted Oakley said an increase of 25 basis points was expected, while a Bloomberg report said futures markets showed “around 165 basis points of tightening this year”. Many analysts and economists also believe the Fed’s monetary easing tactics are coming to an end; Monetary Policy Analytics economist Derek Tang said not doing so “would be inconsistent with what sound policy is” and where it “needs to be heading”.
Amendments to the EU’s Markets in Crypto Assets (MiCA) proposal were suggested shortly before a Committee on Economic and Monetary Affairs (ECON) vote on the package, suggesting a BTC ban was still possible. Though the language was recently altered so coins with energy-intensive proof-of-work (PoW) mining would not be prohibited, several European Parliament members have decided to target “unsustainable” cryptocurrencies. While PoW is not explicitly mentioned in the amendments, the new provision says crypto will be “subject to minimum environmental sustainability standards with respect to their consensus mechanism”. If ECON approves the latest version of the proposal next Monday, Bitcoin-related services will be excluded by default from EU crypto regulation.
Through a $26.5 million transaction, CoinShares International Ltd. has increased its stake in Swiss-based online bank FlowBank SA from 9.02% to 29.3% of the business. This makes the former a joint controlling shareholder alongside FlowBank CEO Charles Henri Sabet, with voting rights equal to 32.06%. CoinShares said that as part of the deal, FlowBank will use its Galata product create a link between itself and digital asset protocols and markets. Additionally, CoinShares CEO Jean-Marie Mognetti will join FlowBank’s board of directors as a crypto strategy advisor. Sabet said in a statement that this way, FlowBank clients can “invest in CoinShares’ crypto on CFDs and gain exposure to digital currencies”.
In a bid to position the UAE as a crypto hub, Art Dubai, the largest annual Middle Eastern contemporary art fair, is featuring digital artwork for the first time in its 15-year history. This year’s four-day fair will dedicate an entire wing of 17 galleries and platforms to showcasing and selling NFTs. Art Dubai’s executive director Benedetta Ghione said NFTs’ heightened popularity in the UAE, as well as the country’s status as “a growing crypto hub”, made this year’s fair the “perfect time and perfect place” to feature NFTs. Among the NFT artists featured are Dubai-based Finnish mixed media artist Vesa and Lebanese artist Magda Malkoun.
Ukraine will launch an NFT collection to mark the history of the Russian invasion with unique digital art. Minister of digital transformation Alex Bornyakov said the collection would be akin to “a museum of the Russian-Ukrainian war…in NFT format”. Crypto donations to Ukraine’s defense efforts against Russia have surpassed the $60 million mark, with the money being spent on military equipment like helmets and bulletproof vests, as well as media activities. Bornyakov said the country’s “digital diplomacy” has led to “positive results”, such as social media platforms either blocking or flagging Russian state media content. Additionally, a volunteer army of IT specialists running a Telegram channel has been giving the Kremlin a taste of its own medicine in the area of cyber attacks, with hackers disabling state-backed websites using traffic bombardment. Bornyakov said Russia’s “(digital) war didn’t start 14 days ago. It started 8 years ago” with constant DDoS attacks, website defacement and database theft, adding, “We just want to make them feel like we feel.”
Show me the money
According to data from Huobi Global, after BTC rebounded to around 39,000 today after falling to a low of 37,500 this morning. Similarly, ETH rebounded to 2,600 today. Daily charts show a possibility of a continued rebound for BTC, while the trend for ETH remains unclear. Contracts-wise, Huobi Futures data show stable open interest (OI) in BTC futures and increased OI in ETH futures, with steady volume for the former and slightly decreased volume for the latter.
These rebounds came after price decreases over the weekend, during which a Russian missile strike on a military training center in Ukraine, near the Polish border, killed 35 people. BTC was trading at around $37,800 and ETH around $2,500 (both down roughly 3% from the start of the weekend), while most major altcoins were in the red. Russia’s invasion of Ukraine has seen BTC bounce between the $37,700 and $45,000 range it entered in late Jan, which BitBull Capital CEO Joe DiPasquale said was “typical during bearish phases, as was seen in May, June and July, and often precedes strong price bottoms”. He also attributed these price movements to the Russia-Ukraine conflict.
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