3/11 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:
Crypto Regulations are Coming
Cryptocurrency markets were sent into a flurry as details of U.S. President Biden’s executive order on crypto were released to the public. The “Executive Order on Ensuring Responsible Development of Digital Assets” outlines the main objectives of the order, aiming to unify the focus of the many branches of the U.S. government and how they pertain to regulating the new industry and asset class.
The order will attempt to unite government agencies in their efforts to protect U.S. consumers, investors, businesses, and overall financial stability. A specific section of the order also focuses on “mitigating the illicit finance and national security risks posed by the illicit use of digital assets,” suggesting that part of these new regulations will enable the U.S. government the greater ability to oversee and combat illegal usage of crypto. This could be seen as a reaction towards the idea that Russia, a nation that is currently under significant economic sanctions from the global community due to its aggression in Europe, could turn towards cryptocurrency to circumvent these penalties.
The European Union is also set to vote on the “Markets in Crypto Assets” proposal on March 14th, which aims to implement further cryptocurrency regulations and guidelines for the industry. While the EU proposal provides a much more actionable and immediate set of regulations compared to Biden’s executive order, both governing bodies represent a growing sense of adoption and embracement of crypto by the Western world.
Market Update - BTC
The overall cryptocurrency market capitalization is about $1.74 trillion, a -1.14% decrease from last week’s valuation of $1.76 trillion. At the time of publication, Bitcoin ($BTC) is valued at $38,902 per bitcoin with a market capitalization of $738 billion making up 42.4% of the overall market.
Bitcoin remains range-bound as it continues to trade between highs of about $45,000 and lows of about $37,000. The recent failure to produce a consecutive high and breach past that $46k level of resistance has sent BTC back to its lower trading range of $38k for the time being. $37k is holding as support for now, but if price were to fall below and retest $33k we could potentially see more downside and a continuation of the downtrend from late last year. For a more in-depth technical analysis, please see our report found here.
CBDCs Could Threaten Stablecoins
Increasing regulatory proposals by the United States and the European Union have given greater discussion to the impact that central bank issued digital currencies (CBDCs) could have on the current stablecoin market. A major part of President Biden’s executive order on crypto calls for the “exploration of a U.S. Central Bank Digital Currency,” which would see the creation of a completely digital dollar. Currently the U.S. and the EU have fallen behind in the international race for CBDC development, where several nations including China have already either launched or begun mass trials of their new digital monetary network.
Stablecoins currently fill a void in cryptocurrency by acting as a “stable” digital asset that is pegged to a fixed value such as the U.S. dollar. The development of an official U.S. CBDC could potentially threaten the use of popular stablecoins such as Tether’s USDT and Circle’s USDC which are both run by private companies.
While there is a great debate between members of the crypto community regarding the future of stablecoins, Tether’s chief technology officer Paolo Ardoino has no doubt that future of stablecoins and USDT will continue to burn bright.
Pro Crypto Candidate Wins Korean Presidency
A particularly close election for the South Korean presidency has come to term with cryptocurrency playing a major part in the debate between candidates. Yoon Suk-yeol managed to overtake his opponent Lee Jae-myung by just under 1% of votes, winning the presidency and shaping the course of legislation in South Korean for years to come.
Both candidates spoke positively of cryptocurrency in an attempt to win over younger voters and the growing industry in Korea. President elect Yoon has recently vowed to raise the threshold for paying capital gains tax on profits from short term crypto trades from $2,000 to $40,000. Lee Jae-myung even released NFTs to help fund the campaign, signaling a possible shift in how politicians could raise capital in future elections.
Politicians around the world, including the U.S., will have to take note of the increasing importance of cryptocurrency and how favorable stances taken towards the industry will decide future elections. Pro-crypto politicians will be able to enjoy the benefits of the growing crypto voting block and use it as an advantage over any politician who does not consider the effects of opposing the crypto industry.
LimeWire Returns as an NFT Marketplace
Beloved music and video peer-to-peer file sharing website LimeWire is set to renter the spotlight as a music non-fungible token (NFT) marketplace. The 2000’s era file-sharing service has rebranded after many years of dormancy resulting from various lawsuits from music labels and will turn to offering music NFTs rather than compete with current streaming services such as Spotify.
The project revival not only plans on establishing a music centric NFT platform that will favor creators rather than labels, but will also launch its own token and reward system. For more information on LimeWire’s comeback, please see our article found here.
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