Crypto News Headlines (09-Feb-2023)

Ethereum’s Shanghai upgrade, scheduled for mid-March, will raise the blockchain’s staking ratio in the medium term, JPMorgan (JPM) said in a research report Wednesday.

There is plenty of room for the 14% ratio to rise, the bank said, given that the average for other proof-of-stake (PoS) networks is about four times as high.

“Assuming the staking ratio converges over time to the 60% average of other major PoS networks, the validator number could increase from 0.5 million to 2.2 million and the yield would fall from 7.4% current to around 5%,” analysts led by Nikolaos Panigirtzoglou wrote. In a proof-of-stake system, validators attest that a block is accurate and can be added to the blockchain.

The global crypto trading sector has quickly reacted to the news of the deadly earthquake that brought destruction to parts of Turkey and the region. Over the past few years, the country became a growing crypto market and digital asset exchanges are now offering to help Turkish traders, their families, and neighbors in need.

Binance, the world’s largest trading platform for cryptocurrencies, announced on Tuesday it will airdrop $100 of BNB tokens to all of its users living in the most affected areas. The company said it will identify the customers that qualify based on proof of address and disperse a total of around $5 million. It also emphasized:

Crypto transfers are now increasingly being used to deliver financial aid to disaster victims as they provide fast, low-cost, borderless, and transparent transactions.

An ancient BTC address that has not transacted in over a decade came back to life on Wednesday—and the profits are something to behold.

Since October 1 2012, address 1MMXRA held 412.12 BTC accumulated across four transactions, altogether worth just $8 at the time. No coins went in or out of that wallet until February 8, when all but a sliver was emptied from the wallet at $23,000 apiece.

By today’s prices, the moved coins represent $9.6 million in value–a 120,000,000% profit.

While sizable Bitcoin trades occur daily, it’s not often that coins that old see the light of day again. As on-chain analytics provider Glassnode notes, dormant coins become “increasingly unlikely to be spent” after a 155-day holding period, and are thus considered a less liquid portion of the supply.

The publication of a consultation document outlining the proposed digital pound, which the public has dubbed “Britcoin,” has brought the United Kingdom one step closer to the introduction of a central bank digital currency (CBDC).

The Bank of England (BoE) and the UK Treasury jointly issued the 116-page consultation document on February 7. A technology working paper that explores the technical and financial design factors was also published. The report claimed that CBDCs like the digital pound may co-exist in what they anticipate would be a “mixed payments economy,” notwithstanding the emergence of privately-issued stablecoins in recent years.

Although the BoE and the Treasury want to introduce a digital pound by 2025 “at the earliest,” there is currently no guarantee that it will happen at all. Despite the fact that no decision to adopt a digital pound can be made at this time, the document noted that The Bank and HM Treasury think a digital pound is likely to be required in the UK.

The crypto mining industry has faced moratoriums in some parts of the United States and Canada in recent months. Now, Russia provides tax incentives for those who want to invest in crypto mining. With the government’s direct support, the new $12 million crypto mining center will open in east Siberia.

According to local media, the state-owned Corporation for the Development of the Far East announced the launch of the crypto mining center in Buryatia — a republic in east Siberia and part of the Russian Federation.

The facility will possess 30,000 mining machines, hire 100 workers and consume 100 megawatts from the power grid. It will open in the first half of 2023 and be owned and run by BitRiver, Russia’s largest crypto mining colocation services supplier.

Coinbase CEO Brian Armstrong says he’s heard rumors the U.S. Securities and Exchange Commission would like to ban retail investors from engaging in cryptocurrency staking, the income-generating technique at the core of running blockchains including Ethereum.

“I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen,” he tweeted Wednesday.

The SEC declined to comment.

While Armstrong’s suspicions may come as a surprise to many in the industry, SEC Chairman Gary Gensler has previously stated that cryptocurrencies that allow staking could be classified as securities under the Howey test – even though ether has been designated as a commodity by the SEC’s sister regulator, the Commodity Futures Trading Commission (CFTC).

Bloomberg Intelligence (BI), the research arm of Bloomberg, published its February 2023 crypto outlook last week. BI’s senior commodity strategist Mike McGlone tweeted Sunday:

Cryptos may be facing their first real recession, which typically means lower asset prices and higher volatility.

“The last significant U.S. economic contraction, the financial crisis, led to the birth of bitcoin, and the possible coming economic reset may mark similar milestones,” he added.

Regarding “how much price pain will be before longer-term gains resume,” the report details, “Our graphic shows the Nasdaq 100 at parity with [bitcoin’s] 200-week moving average, relatively lofty based on the history of U.S. recessions,” elaborating:

We don’t expect the crypto market to be spared if the risk asset tide continues to recede.

Sam’s Club, an American chain of membership-only retail warehouse clubs that is owned and operated by Walmart Inc., is now jumping into the digital and blockchain bandwagon by filing for crypto and NFT trademarks.

Sam’s Club is now treading the crypto waters as the retailer recently offered healthcare services that cater to the augmented reality and virtual space. The popular retailer filed a couple of trademarks that will allow it to manage NFTs, offer digital goods, and also provide crypto-based software.

Walmart Subsidiary Sam’s Club Links With Blockchain

Sam’s Club, founded by Sam Walton, has millions of members from all over the world. It was established in 1983 and was created to help entrepreneurs get the products they need in a fast and convenient fashion.

Early in 2018, Walmart has already shown its interest to jump into the blockchain waters, specifically with the launch of Bulkcoin, which is exclusive to members of the Club.

The government of Dubai’s stated goal of becoming a financial technology center was boosted Wednesday when its Virtual Assets Regulatory Authority (VARA) released its 2023 rulebook for regulating cryptocurrency. The regulatory authority says any entity in the Emirate that issues virtual assets must comply with the rulebook, beginning with applying for a license to operate in Dubai.

The agency says the new rules are intended to attract crypto businesses, protect digital asset dealers and investors, and curb illegal practices, all in service of promoting Dubai as a regional and international hub for virtual assets, boosting its competitive edge both locally and internationally.

Max Levchin, the CEO of buy-now-pay-later company Affirm, has confirmed that they will be shutting down their “Affirm Crypto Program” amid dampening consumer spending and a changing macroeconomic environment.

The CEO released a letter to shareholders on Feb. 8 alongside a 19% staff cut. He cited uncertain macroeconomic conditions and the need to offset some liabilities on the firm’s balance sheet as the two main reasons behind the decision:

“In a period of increased economic uncertainty, we are doubling down on our core businesses, delaying projects with less certain revenue timelines, and aligning our operating expenses with revenue. Concurrent with reducing our workforce, we are sunsetting several initiatives, such as Affirm Crypto.”

The firm’s chief financial officer, Michael Linford, said the decision was made to meet profitability targ.