Crypto Weekly: 13 – 19 February 2023
United States Securities and Exchange Commission Chair Gary Gensler issued a warning to crypto companies after the SEC announced a settlement with crypto exchange Kraken, in which the exchange agreed to shut down its staking services and programs for US customers as well as pay $30 million in disgorgement, prejudgment interest and civil penalties.
The US SEC has also reportedly informed Paxos Trust Co. that it is planning to sue the stablecoin issuer for violation of investor protection laws, specifically in reference to Binance USD, alleging that BUSD should be considered an unregistered security.
Despite the SEC’s crackdown on staking, Kraken has announced that it will continue to offer its staking services to its non-US users in other markets through its subsidiaries. On a related note, Coinbase CEO Brian Armstrong commented on rumors of the US SEC potentially imposing a ban on crypto staking for retail investors by stating that he believes this would stifle innovation, encourage offshore operation, and overall harm the market as well as the US in the long run.
PayPal is reportedly pausing the development of its own stablecoin for now amidst increased regulatory scrutiny. The news came a day after a report that the New York Department of Financial Services was investigating Paxos, which PayPal had been working with on its stablecoin effort with. PayPal had confirmed early last year that it was working on the stablecoin, which would be backed one-to-one with the US dollar.
According to its annual report filed with the SEC last week, global payment giant PayPal holds $604 million of its financial liabilities in cryptocurrencies as of the end of 2022. BTC and ETH have the largest share in PayPal’s crypto assets, accounting for $291 million and $250 million in the asset breakdown, respectively. The remaining $63 million includes Litecoin and Bitcoin Cash combined. PayPal’s crypto holdings account for 67% of the company’s total financial liabilities. In the report, PayPal also specifically notes that it stores customers’ cryptocurrencies through a third-party custodial service.
Shopify has launched a suite of blockchain commerce tools to enhance the user experience of Web3-focused stores hosted by the platform. Highlighted features include expanded crypto wallet connect features and tokengating API tools. In terms of expanded crypto wallet support, the e-commerce giant has integrated with the Sign-In With Ethereum protocol led by the Ethereum Name Service (ENS) and the Ethereum Foundation, enabling secure user sign-ins and authentication of Ethereum accounts and ENS domains without giving away private identifiers to third parties, such as names, phone numbers, and residential addresses. Meanwhile, with the tokengating APIs, select Shopify merchants can now set up their stores to dictate which tokenholders can and cannot gain access to exclusive products, NFT drops, and benefits. The tool verifies user eligibility via their connected wallet and is being touted as a handy way for NFT Merchants to reward certain users or add exclusivity to specific products.
The Sandbox co-founder Sebastien Borget has announced that the metaverse gaming platform has signed a MOU with the Saudi Arabian Digital Government Agency, sending SAND prices on a 30% surge. The announcement was made via a LinkedIn post during the LEAP 2023 tech conference in the Middle East nation.
Leading ETH liquid staking protocol Lido is set to roll out staking reward withdrawals and improved staking architecture with the announcement of the upcoming Lido v2 upgrade ahead of Ethereum’s upcoming Shanghai hard fork upgrade.
In contrast to ETH staking, BTZ staked on the Bitazza platform is inherently stable, with rewards exclusively coming from the portion of BTZ allocated specifically to facilitate real use cases of BTZ and encourage Bitazza community building/development as part of Bitazza’s Ecosystem & Community Growth allocation and is independent from network/blockchain activity.
Weekly Technical Analysis: 13 – 19 February 2023
Bitcoin (BTC)
Despite facing a sell-off towards the end of last week, BTC’s support at $21,500 remains intact, allowing the uptrend to continue. With BTC’s RSI signals falling from overbought levels, there is plenty of room for a rally this week with lower concerns regarding another sell-off. BTC is still targeting the $25,000 resistance level; however, if support is broken, the market will likely slow for some time.
Ethereum (ETH)
ETH underwent a similar correction alongside BTC but has refrained from making new lows, fueling expectations of ETH continuing its rally this week. Keep an eye on support at the $1,400 level. If support cannot remain intact, ETH’s rally may come to a halt this week. On the other hand, if support holds firm, ETH may be able to successfully challenge its medium-term resistance target of $2,000.
Hedera (HBAR)
HBAR is up by +20.7% over the past week and has consistently created new highs during its recovery. A Buy on Dip trading strategy may be adopted, with many traders likely targetting to buy if prices fall to the 2.60 baht support level. HBAR will look to target resistance at the 3.80 baht level. If support is broken and prices continue to fall, traders may slow down investment in HBAR.
Lido DAO (LDO)
LDO is up by +19% over the past week; however, its direction is beginning to trend sideways following its recent price surges. Keep an eye on support at 64 baht; if support can remain intact, LDO will look to challenge resistance at the 112 baht level and continue its rally.
Trading and Investment Considerations For The Week
The crypto market underwent a correction following recent fines by the SEC on Kraken for its staking services as well as potential upcoming fines for Paxos regarding BUSD’s alleged status as an unregistered security. The news of increased regulatory pressure from the SEC is likely to loom over the crypto market this week and dictate/influence market sentiments during this period.
Additionally, the market is awaiting the release of the US Consumer Price Index report on 14 February. Many are expecting January’s inflation figures to come out at 6.2%, down from December’s 6.5%. Furthermore, Jobless Claim numbers will come out on Thursday, which could potentially affect US dollar performance.
If inflation figures improve and manage to come in below market expectation, the market will likely strengthen as it would lend further credence to the expectation that the FED will cut interest rates later this year despite the official statement from the FED saying otherwise. However, if inflation figures are higher than expected, this could negatively impact the performance of numerous assets across markets.
The market is still trending toward an overall recovery, and a Buy on Dip strategy could potentially prove profitable during this period if market conditions remain optimistic. However, if Bitcoin falls below $19,000, it may force the market sideways or even on a bearish trend once more. If this happens, many in the market will likely consider slowing down investment.
Disclaimer:
-Cryptocurrency and Digital tokens are highly risky; investors may lose all investment money. Investors should study information carefully and make investments according to own risk profile.
– Past Returns/Past Performance does not guarantee future returns/performance.
*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
Sources:
https://cointelegraph.com/news/stablecoin-issuer-paxos-to-face-sec-lawsuit-over-binance-usd-report
https://www.theblock.co/post/210710/paypal-pauses-stablecoin-project-amid-paxos-probe-bloomberg
https://cointelegraph.com/news/paypal-held-604m-in-bitcoin-and-other-crypto-by-the-end-of-2022
https://cointelegraph.com/news/shopify-launches-suite-of-blockchain-commerce-tools-for-merchants
https://cointelegraph.com/news/lido-plans-to-level-up-ahead-of-ethereum-shanghai-hard-fork-upgrade
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