3/18 FAL Weekly Digest
Welcome to the FAL Weekly Digest, a source for this week’s biggest news articles and crypto market updates.
Here is what you need to know:
Ape Coins Usurp the Crypto Meme Throne
A new cryptocurrency called “ApeCoin” has launched as part of a reward program for current holders of the Bored Ape Yacht Club non-fungible token (NFT) collection, sending the crypto community into an uproar. Anyone who currently holds a Bored Ape or a Mutant Ape NFT in a digital wallet can claim up to 10,000 of these new tokens per ape for free, which are currently worth about $13 a coin or $130,000 all together.
The Ethereum based token acts as yet another incentive for being a member of the exclusive NFT club. The BAYC has thrown several private parties since its launch last year in April, and has attracted the attention of celebrities such as Jimmy Fallon and Eminem. For more information regarding the newest ape on the blockchain, please see our article found here.
Market Update - BTC
The overall cryptocurrency market capitalization is about $1.88 trillion, a 8.05% increase from last week’s valuation of $1.74 trillion. At the time of publication, Bitcoin ($BTC) is valued at $41,884 per bitcoin with a market capitalization of $795 billion making up 42.3% of the overall market.
Bitcoin is currently experiencing a rally in prices after nearing range lows of about $37k on Monday. Crypto markets have avoided further losses resulting from the fear of planned interest rate hikes from the Federal Reserve, which would shift the macro-financial environment from a “risk-on” to a “risk-off” state at the detriment of “risk-on” assets such as crypto and many equities. The fact that equity and crypto markets have rebounded since the Federal Reserve meeting on Wednesday give greater weight to the claim that the rate hikes were already priced in as seen in the general downturn observed from December 2021.
The key Bitcoin levels to watch for the time being are the support level of $37k and $46k which has acted as significant resistance in 2022. Until those levels are broken, Bitcoin can be said to continue to trade within this greater range without a notable shift in market direction. It is currently trending upwards and testing $42k which is the midpoint of the range, but it remains to be seen if it will overcome that level and test range highs.
Fed Pushes Ahead with Rate Hikes
On Wednesday the U.S. Federal Reserve announced an 8 to 1 decision to raise the target federal short term interest rates to a range between 0.25% to 0.5%. This is the first increase in the federal bank’s interest rates since 2018, and a major step towards the reversal of the fiscal policies taken on by the U.S. as a reaction to the pandemic’s effect on the economy.
The Fed’s press release cites the continuing growth of economic activity and employment figures in the U.S. as signs of confidence to begin the unwinding of asset purchases and low interest rate policies taken on by the bank, especially in the face of growing inflation. Chairman Jerome Powell stressed the primary goals of “maximum employment and price stability” behind the Fed’s policy decisions as it combats inflation without taking a heavy-handed approach. For more information on the policy shift and its potential effects on the cryptocurrency market, please see our full article found here.
BTC Mining Takes a Hit
The Bitcoin mining community may be reaching a short term peak as reports of the mining difficulty dropping begin to surface. According to blockchain analytics company Glassnode the difficulty of mining a bitcoin block has dropped 0.35% on Thursday, suggesting that there may a slight decline in the amount of people or groups mining bitcoin.
The Bitcoin protocol is encoded to ensure that the time to add a new block to the blockchain will always remain around 10 minutes. This is done by self-adjusting the Bitcoin mining difficulty, which is a measurement of how hard or how much processing power must be used to process transactions and add blocks. If more people or groups are mining Bitcoin, the network will auto-regulate itself and increase the difficulty to ensure that blocks will only be added every 10 minutes. Likewise if less people are mining Bitcoin, then the difficulty will fall to make it easier to add blocks.
The image above indicates that this is actually the second time in the month of March that the mining difficulty has fallen from peak all time highs observed in late February 2022. While it is not a dramatic fall off in levels, especially when considering the tremendous growth from November 2021 onwards, it could be a sign that Bitcoin mining may have hit a short term peak.
Part of this decline could be due to civil unrest in Kazakhstan, which is home to one of the largest Bitcoin mining communities after the Chinese crypto mining ban in 2021. The Kazakh government has recently cracked down on illegal mining operations in the country that have evaded taxes on their extreme energy consumption.
NFT Owner Hits Rock Bottom
When it comes to crypto and self custody, entering the wrong information can be an extremely costly mistake. A twitter user by the name of dino_dealer learned this the hard way, where he/she listed an extremely rare rock NFT for much less than what it was actually worth.
The rock in question is an EtherRock, which is one of the first NFT collections ever released on the Ethereum blockchain back in late 2017. The collection is made up of still images of rocks in varying colors and shapes. Only 100 of these rocks have been created, causing the value of the digital jpegs to skyrocket into the millions with the most expensive rock selling for $3,765,261. For @dino_dealer, its best not to think about the one rock that got away.
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