Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
The Ukrainian government has canceled a planned crypto airdrop meant to reward crypto donors and will instead announce NFTs to support its armed forces, said deputy PM and minister of digital transformation Mykhailo Fedorov. However, he also noted that there were no plans to issue any fungible tokens. Although it appeared yesterday that an airdrop had begun, it was later revealed that a third party may have been spoofing the event. So far, the Ukrainian government has raised over $54 million in crypto funding since it started accepting crypto donations a week ago.
According to data from blockchain analysis firms, Russian crypto activity on major exchanges have slowed, indicating the country is unlikely to use digital assets to evade sanctions. Though ruble-denominated crypto trading volume reached a peak of $70.7 million on 24 Feb, it has since fallen to around $34.1 million. Still, the US and EU are increasing their regulatory scrutiny of crypto, with New York state tightening blockchain surveillance to ensure digital assets are not used to support Russian interests. Crypto experts like crypto crime investigator TRM Labs’ head of legal and government affairs, Ari Redbord, have dismissed these concerns, saying Russians “cannot use crypto to replace hundreds of billions of dollars that could be potentially blocked or frozen”.
In a bid to become Europe’s Bitcoin capital, Lugano, Switzerland, has partnered with stablecoin issuer Tether to establish Bitcoin, Tether and Lugano’s own LVGA Points token as legal tender in the city. This move aims to enable the seamless use of crypto for everyday transactions by all its businesses. In contrast, Malaysia’s deputy finance minister Yamani Hafez Musa has said crypto is not suitable as a form of payment or store of value, though he acknowledged they were a viable asset class for investments. To support his argument, he said digital assets were “exposed to volatility as a result of speculative investments”, did not “exhibit characteristics of money”, were at risk of cyberattacks, and could not process as many transactions as the current Visa payment system.
GEM Mining’s Feb BTC mining update shows it produced 200.5 BTC worth over $8,506,600, with 18,065 currently active miners and 14,000 set to come online by year-end. The 97% carbon-neutral institutional-grade mining firm has a deployable fleet of 32,000 miners, and Feb’s active miners represent a 22% rise from Jan’s 14,804 miners, while the 1.77 EH/s hash rate marks a 22.8% increase from Jan’s 1.44 EH/s. However, the BTC produced in Feb was down 9.89% from Jan, when 222.5 BTC worth around $9,551,100 was produced. This also meant a month-on-month drop in revenue, from $9.15 million to $8.22 million. GEM attributed this to the shorter month, higher global hash rate and subsequent higher difficulty adjustment, and donation of mining power to support community measures.
Blockchain infrastructure firm Emrit wants to bring retail to Web3 by “bridging the gap between the physical and Web3 world”. CEO Jiten Varu said the key to doing so was to focus on the tangible and bring “distributed infrastructure” to communities. Customers pay a one-time $199 fee for the miner and receive half the earnings, which are then deposited into their wallets on a monthly basis. Varu said this was “not a coin- or currency-focused crypto project” but instead, “passive income, not like day-trading Dogecoin”.
Show me the money
According to data from Huobi Global, BTC continued to fall last night, dropping below the previous support level of 42,000; daily charts show signs of a downward trend. Contracts-wise, Huobi Futures data showed stable open interest (OI) in both BTC and ETH futures, with slightly decreased volume amid a relatively inactive contract market.
Though ETH recently rose above $3,000, data suggests a reversal won’t happen anytime soon. In view of its 88% annualized volatility, moves between $2,400 and $3,200 should be considered normal, but there is no sign retail traders are confident enough to buy ETH with leverage at present. While its current $6.7 billion daily transaction average is up 6% from 30 days prior, it still falls far short of the $9 billion average in late 2021. On the primary layer, ETH transactions are not showing signs of growth, and Ethereum dApps saw a 10% month-on-month decrease on active addresses. Therefore, unless ETH transactions and dApps usage see significant growth, bears are likely to have the advantage.
Polkadot’s price is continuing to fall and may even drop to $10 amid global concerns over commodity prices, the Russia-Ukraine conflict, and inflation. Currently, its price is $17.31 with a 24-hour trading volume of $1,114,970,973, and has seen a 5% dip in the past 24 hours. At the time of writing, its live market cap stands at $17,091,224,508, with a circulating supply of 987,579,315 DOT coins.
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