4/1 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 Regulation Looms in the Distance
Financial regulators around the world are increasingly focusing their gaze towards cryptocurrency, which has been able to run unchecked for quite some time. A recent bill passed by the European Union Parliament aims to extend existing know your customer (KYC) and anti-money laundering (AML) policies from traditional financial services to the crypto space. Some of these policies include requiring users of cryptocurrency to provide identification for both the sender and receiver for any transaction valued over EUR 1,000, regardless whether or not it is being sent from or to a private wallet or crypto exchange.
The recent EU bill comes as part of a greater push by the international community to regulate crypto in an effort to crack down on the illicit use of cryptocurrency. Canada, Japan, Singapore, and the United Kingdom have joined the EU in its efforts to force crypto services such as exchanges to have greater personal identification requirements in order to operate in their jurisdiction.
Several prominent members of the crypto community spoke out against said policies, citing their concerns that the proposed regulations are anti-innovation in nature and detrimental to the growth of the space.
Brian Armstrong, CEO of Coinbase, tweeted out his disgust with the EU bill on Wednesday.
While the potential mandates may seem over-reactive at first glance, these types of identification requirements have been a part of the traditional financial system for many years. It is no surprise to see the extension of increased KYC laws and financial surveillance into the crypto space as global adoption continues to compound. Only time will tell if these measures are as heavy-handed as the critics would claim.
Market Update - BTC
The overall cryptocurrency market capitalization is about $2.14 trillion, a 7.54% increase from last week’s valuation of $1.99 trillion. At the time of publication, Bitcoin ($BTC) is valued at $46,356 per bitcoin with a market capitalization of $881 billion making up 41.1% of the total market.
Bitcoin has seen a significant push towards the upper part of its established range this week, breaking past the $46k resistance level on Sunday after almost 3 months of consistent rejections. Price reached a high of about $48k on Monday and Tuesday and was pushed back down to test the previous resistance level as support.
While the price fell below $46k, there appears to be a reversal from a low of $44.2k which suggests that we may have seen the higher low necessary to truly push out of the prior range. With a higher low set, Bitcoin could continue onward to attempt to produce a higher high and test the $48k range once more in the future.
Terra Doubles Down on Bitcoin
Large purchases by the group behind the Luna coin may have contributed to Bitcoin’s recent price rally. The Singapore-based Luna Foundation Guard (LFG) had announced back in February that it would raise over $1 billion USD to establish a Bitcoin-based reserve treasury for its TerraUSD ($UST) stablecoin. The stablecoin would operate on the Terra ecosystem alongside the Terra ($LUNA) coin, acting as a stable coin of value pegged to the U.S. dollar.
A wallet that is rumored to belong to LFG has quietly accumulated large amounts of Bitcoin since late January and has yet to sell any of its holdings. According to results from BitInfoCharts, the wallet now has a balance of 30,727 BTC, equivalent to nearly $1.5 billion USD.
The Luna Foundation Guard is quickly becoming one of the largest organizations that holds Bitcoin in its reserves, and could soon challenge Tesla’s position as the second-largest institutional holder of Bitcoin. Tesla currently holds 43,200 BTC, while the largest known institutional holder MicroStrategy holds 125,051 BTC. For more information on Terra’s Bitcoin acquisition, see our article found here.
NFTs and Broken Promises
NFTs have quickly become one of the hottest buzzwords of the post-COVID era. Regardless if you are looking at gaming companies, sports leagues, or even clothing brands, it seems everyone and anyone is jumping on the NFT hype train.
But a closer look at the NFT industry raises more questions than it has answers. News of mounting scams and rug pulls in the field has garnered the attention of federal authorities as more and more people buy into the NFT craze and end up with half-finished products rendered useless by the abandonment of its creators.
While there are countless projects that fail to live up to their hype, the handful of successful NFT projects have become so exclusive that it is unrealistic for the average buyer to participate. Cryptocurrency as a whole was created as a promise to provide inclusivity and remove the barriers of entry that is often found in traditional financial structures. NFTs may have started as an equal opportunity system but has devolved where a schism has formed between early adopters who may have been lucky enough to buy valid projects and others who are not endowed enough to purchase expensive collections and are looking for the next best thing.
The current NFT economy has reinforced one truth in the digital space: do your own research (DYOR). The promises of wealth and valuation increases are quickly washed away as speculative dreams turn into investment nightmares. For a thorough analysis of the current NFT culture, please read our article found here.
Thanks for reading! For more information regarding the cryptocurrency space, please visit us at https://www.cryptofal.com/.
