Daily Digest 2/24
Insight on the biggest stories of the day. “Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.”
Russia-Ukraine conflict: An overview of what crypto-investors should know
It was never fun and games but how quickly the move on Ukraine has happened is pretty scary. Just last week we heard about Russian soldiers being on the border and almost overnight the war began. Russia is claiming it to be a “special military operation” but with bombs hitting Ukraine it seems that is an understatement. Without a shadow of a doubt, this has decimated the crypto markets again.
This news caused Bitcoin to fall below $35,000 again early this morning for a close to 10% drop and Ethereum to drop about 12%. The Bitcoin fear and greed index has hit extreme fear after being neutral last week. These were not even the hardest hit in this situation but that is how it goes when playing the altcoin game. One thing that is very noticeable is there is not much “buy the dip” talk on social media.
Popular crypto analytics platform Santiment attributes the onslaught of alt-coins directly to the FUD coming from the start of this war. Liquidations reared their ugly heads again as traders of BTC and ETH were wiped out for almost $150 million. We have been on a downward trajectory for months now so the actual effects of this crash are not as bad as we would have expected, for now.
A lot of the hype and promise of cryptocurrencies is that it was not supposed to be affected by geopolitical issues because it is not tied to any of those central governing entities. BTC especially got this praise as a hedge against issues like a war or inflation that would drive down the value of fiat money but is still taking hits. These are risk assets and they will always be dumped off the hardest because the market caps are small and basic risk assessment strategies say get out.
The increasingly noticeable correlation between BTC and tech stocks proves this because the more traditional market traders are bringing over their tried and true methods of risk management. The reason that BTC and ETH have weathered the storm better than most other cryptos is that they have more than just speculation you can actually use them and to an extent rely on them.
China’s Supreme Court adds digital currency to list of illegal fundraising methods
China has done it again and made cryptocurrencies even more useless in their country. This time they are making it so that even donations in the form of cryptocurrencies are now illegal. They must have thought what Justin Trudeau was doing to stop the truckers from raising money was a great way to further push the digital yuan as the only form of currency there people can use.
The Supreme court of China revised its version of “Decision on Amending the Interpretation of the Supreme People’s Court on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases of Illegal Fund Raising.” This revision also made it even more clear that the conviction and punishment for illegal fundraising would not be taken lightly. The new laws will be going into effect on March 1st, 2022.
China has now in just the last year made mining Bitcoin illegal, cryptocurrencies in general illegal, and now they can not even be used for fundraising. Putting an all-out ban on cryptocurrencies is only going to make people find other ways of dealing with cryptocurrencies. When miners were forced out they started moving to countries like the US and Canada. While it is an inconvenience for the citizens there is not much that can be done to stop China from taking full control of what people can or can’t do with digital currencies.
Cardano Tops in Adjusted Volume Transactions Despite Price Tumbling 18%
Although times are a bit tumultuous in crypto and the world at the moment there are still positive strides being made in the technology of cryptocurrencies. Cardano may be down close to 18% in 24 hours but they are making real headway in their case to take some market share from Ethereum.
In terms of adjusted transaction volume in the last 24 hours, Cardano is the leader with $16.5 billion. That is double the adjusted volume of Bitcoin three times more than Ethereum. Adjusted transaction volume is The sum USD value of all native units transferred removing noise and certain artifacts according to Messari. What stands out the most is how much less in transaction fees people spent on all those transactions compared to BTC and ETH.
For the same 24 hour period, ADA users spent a total of $39,000 in fees as opposed to $25.75 million on Ethereum. Gas fees have been the biggest detractor for Ethereum for quite some time leaving the door open for competitors like ADA and Solana. While this is great news for the network going forward the project is still currently down 75% from its all-time highs.
This has not deterred users from accumulating more; however, “shark” wallet addresses holding between 10,000 - 100,000 have continued to increase and now account for almost half of the total Cardano supply. Cryptocurrency exchange Bitrue has also announced that ADA will be a base trading pair for some of the most popular tokens on the exchange like Bancor, Kyber network, and LOOM.
