Crypto News Headlines (10-Jan-2023)

Crypto whales, or large traders, are staying on the sidelines of the bitcoin (BTC) market despite a risk reset in traditional markets because thin liquidity is making transacting without impacting the cryptocurrency’s price difficult.

In signs of the increasing appetite for risk, stocks have gathered upside traction while the U.S. dollar has taken a beating on optimism that China’s reopening is gaining steam and the Federal Reserve may be close to winding up its liquidity-tightening cycle. In crypto, however, market depth – a measure of an asset’s price resilience to large orders – is relatively low and discouraging activity.

“Aggregated 2% BTC market depth has dropped by almost half to around 8,000 BTC from 14,000 BTC at the end of October,” analysts at Bitfinex, one of the top 10 centralized cryptocurrency exchanges by volumes, wrote in the Jan. 9 issue of the market report. “In other words, a large order of the same USD value or size placed today will have more than twice the impact on price in contrast to two months ago.”

Countries in Latam that have been affected by high devaluation and inflation rates are starting to turn to crypto as an investment option. In Chile, which is among the five countries with the worst inflation in the zone, crypto has risen to be among the most popular investment choices among all options available in the market.

The findings are from a survey by Bain & Company, a global consulting firm headquartered in Boston, which inquired about the most interesting investment options in the country during 2022. 23% of the polled answered that crypto was the go-to choice for their investments in 2022, putting it in third place among all options.

Investment funds took first place in the survey, with 36% of the polled having chosen this as their first investment option. 24% of the people polled answered having invested in real estate.

Shares in the troubled Grayscale Bitcoin Trust (GBTC) surged on Monday, narrowing its discount from Bitcoin.

The price for the OTC-traded security jumped 11.56% yesterday, to $9.65. This brought the trust’s discount against the net asset value (NAV) of its Bitcoin holdings to 38.55%, the smallest gap since mid-November.

GBTC is a publicly-listed financial vehicle that gives investors exposure to Bitcoin without needing to buy and hold the asset physically. The trust had historically traded at a premium to Bitcoin but has, since late February 2022, been stuck at a hefty discount.

Over the last week, Solana (SOL) has emerged as one of the top winners in the crypto market after seeing more green days than red in the last week. It is still continuing the streak into the new week after recording double-digit gains once more. This has now seen the asset move to the top of the most-viewed list on Coinmarketcap.

Solana’s Popularity Grows As Price Balloons

As of Monday, Solana was officially the most-viewed cryptocurrency on Coinmarketcap. This comes after SOL posted gains of more than 22% in a 24-hour period, pushing its price above $16 for the first time since November 2021 following the collapse of the FTX crypto exchange.

After falling to two-year lows, Solana had begun to see interest from investors once more when BONK, a meme coin based on the blockchain, went viral. SOL’s price grew quickly as the popularity of the BONK meme coin rose, which could become the first catalyst that pushed it above $10.

Turkish automotive company Togg announced a partnership with Metaco — a digital asset custody and orchestration system provider — to secure its open mobility ecosystem built on Avalanche.

Togg’s mobility-as-a-service platform aims to deliver smart contract-powered use cases — including tokenization of mobility services, assessment of CO2 footprint and nonfungible token ownership — for users in Turkey and Europe.

The partnership with Metaco will see the use of its digital asset custody and orchestration platform, Harmonize, to safeguard the custody and governance of Togg’s digital assets. Sharing insights on the initiative, Togg CEO Mehmet Gürcan Karakaşstated:

“Blockchain-enabled digital tokens allow data and other assets to be stored and transferred in a fast, secure, and green way. By leveraging technology from Metaco, we make this possible.”

Nepal’s authorities have once again taken steps to block cryptocurrency related activities. In a Jan. 8 notification, Nepal’s Telecommunications Authority instructed all internet service providers (ISPs) to prevent operating and managing crypto-related “websites, apps or online networks.”

In September 2021, the nation’s central bank banned cryptocurrency activities including trading and mining. In April 2022, Nepal’s telecommunications authority sought information from the public about anyone participating in illegal activities, such as cryptocurrency.

The latest caution threatens legal action against ISPs and email service providers if any crypto-related activity takes place on their platforms. The notification stated that virtual currency transactions which are illegal in the nation “are increasing in recent days.”

Despite the ban, Nepal has ranked 16th in Chainalysis’s 2022 Global Crypto Adoption Index, ahead of nations like the United Kingdom and Indonesia.

Hong Kong Financial Secretary Paul Chan Mo-po reaffirmed the city’s crypto commitment at a web3 summit in Cyberport Monday.

Emphasizing that Hong Kong remains committed to becoming a regional crypto hub, the financial secretary described:

As certain crypto exchanges collapsed one after another, Hong Kong became a quality standing point for digital asset corporates.

He added that Hong Kong has a robust regulatory framework for crypto that “matches international norms and standards.”

Joseph Chan, the undersecretary for financial services and the Treasury for the government of Hong Kong, revealed at the same event that the city is preparing to issue more licenses for digital asset trading firms. Moreover, it is planning a consultation on crypto platforms to explore the potential for retail participation in the industry.

Binance’s proximity to its collapsed competitor FTX has given federal prosecutors reason to seek new information in their 4-year-old investigation into the world’s largest crypto exchange.

Over the past few months, U.S. attorneys in Seattle have been asking financial firms to hand over records of communication with Binance, according to a weekend Washington Post report. The newspaper cites two anonymous sources who have reviewed the subpoenas.

The investigation involves the justice department’s money laundering team, the U.S. Attorney’s Office in Seattle, and the National Cryptocurrency Enforcement Team, according to a December report by Reuters.

According to Bloomberg, the top 100 cryptocurrencies have outperformed both gold and large and mid cap stocks in the first few weeks of January. The MVIS CryptoCompare Digital Assets Top 100 Index returned 6% while gold and the Bloomberg Global Large and Mid Cap Index returned only 3% in the same timeframe. 

This is great for cryptocurrencies as 2022 saw the loss of institutional investor confidence in the industry. The recent rally, however, does not prove that crypto is a safe bet against external market forces. 

During the 2021 bull market, banking giant JPMorgan said that Bitcoin has the ability to overtake gold with the asset possibly rising to $146,000 during this period.

However, just like stocks and gold, the crypto market is vulnerable to external market forces and industry debacles as seen with 2022’s historic high-profile collapses that wiped billions off the market.

Terraform Labs (TFL), the firm behind the defunct algorithmic stablecoin TerraUST (USTC), and its co-founder Do Kwon is back in the limelight again for allegedly running a smear campaign and issuing threats against one of their own community members.

It all started in the month of May with the genesis airdrop that was planned after the original ecosystem imploded in the wake of its stablecoin depeg. TFL, in a Twitter thread, claimed that Jimmy Le, a community member entrusted with Terra community funds, has refused to return funds gained during the genesis airdrop.

The thread noted that the newly minted token, now called LUNA, was airdropped to individuals holding the original native token (now called) LUNAC. However, an error with regard to CW3 multi-sig wallets resulted in individual signers of these multi-sigs receiving LUNA airdrops, which they should not have.

TFL claimed that all other multisig singers returned the accidental airdrop except for Jimmy and despite their best efforts, he is yet to cooperate with them.