Crypto Morning: Fed Promises More Tightening, Bitcoin (BTC) Drops to 45K, Russia Sanctions Could Tighten Market

Charlie Taylor

Wednesday is one of losses for the cryptocurrency market, which follows a lower risk appetite from equity investors after signs of more aggressive monetary policy in the United States. Bitcoin (BTC) is down 3% in the last 24 hours at $45,306, data from CoinGecko shows. Ethereum (ETH) is down 4.9% to trade at $3,339. In Brazil, Bitcoin dropped 1.5% to R$212,615, according to the Bitcoin Portal Index (IPB). The cryptocurrency market followed the selling wave that dominated global exchanges on Tuesday (5), which reacted to comments from Federal Reserve Governor Lael Brainard. At a conference in Minneapolis, Brainard said she expects a combination of interest rate hikes and a rapid reduction in the US central bank’s balance sheet to bring US monetary policy “to a more neutral position”, according to Reuters. This Wednesday, the Fed released the minutes of the March meeting, which should provide more details on the plans to reduce the monetary authority’s positions in bonds.

Impact of sanctions

Investors fear that this tightening will lead to a recession, even more so with the impact of sanctions on Russia amid the conflict in Ukraine. While the Russian government denies the war crimes allegations, Europe is considering blocking Russian coal purchases, a measure that will be voted on on Wednesday, according to the New York Times. To fund war spending, Ukraine launched a website to sell – via OpenSea – about 300 non-fungible tokens it received in donations, according to Bloomberg. The NFTs include a donated CryptoPunk that is expected to raise about $200,000, according to Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation. With the scenario still tense, altcoins operate in the red this Wednesday (6) as Binance Coin (-3.1%), Solana (-6%), XRP (-1.9%), Terra (-1, 3%), Cardano (-5.2%), Avalanche (-6.3%), Polkadot (-6.4%) and Shiba Inu (-2.6%), according to data from CoinGecko. Dogecoin manages to take off and is up 6% in the last 24 hours, still on the heels of Elon Musk’s purchase of a 9.2% share on Twitter. The founder of automaker Tesla is now on the platform’s board and has promised changes. Despite the drop in most cryptocurrencies on Wednesday morning, experts still point to interest from institutional investors and big Bitcoin buyers as a positive factor, as highlighted in this week’s Glassnode report. And it’s not just the biggest cryptocurrency that could benefit from this move. For the Bitcoin Market research team, the Ethereum blockchain, as “the main network of smart contracts”, should concentrate most of the market innovation at least until 2025, shows analysis published by E-Investidor. Because of this expansion, ETH positions can help investors maintain portfolio consistency over the long term, analysts say.

Other highlights

MicroStrategy Purchasing: The analytics software company on Tuesday announced the purchase of 4,167 bitcoins between February 15th and April 4th of this year, bringing the wallet to around $6 billion, or 129,218 BTCs in ‘hodl’ — assets held over the long term. According to a document filed with the SEC, the new investment cost $190.5 million at an average price of $45,700 per BTC. And the CEO of MicroStrategy, Michael Saylor, is one of the confirmed names for Bitcoin 2022, a conference that starts this Wednesday (6) in Miami. The event will also be attended by the President of El Salvador, Nayib Bukele, star manager Cathie Wood and tennis player Serena Williams. Miami wants to become the center of Web3, but it has a long way to go despite the support of pro-crypto mayor Francis Suárez, according to a Bloomberg report. As of 2019, Miami crypto startups have attracted just $838 million in investment from venture capitalists, compared with $12.7 billion for companies in the San Francisco Bay Area and $7 billion for New York, according to PitchBook data. Lightning Labswhich specializes in solutions for payments with Bitcoin, announced on Tuesday (5) that it received a contribution of US$ 70 million in a Series B investment round. The company also launched Taro, a protocol for the global expansion of the payments from the Lightning Network, and is keeping an eye on the demand for the integration of stablecoins and bitcoins on the same network. Will Smith wasted no time after leaving the Academy of Arts and participated in the investment round that raised US$ 45 million for the Boba Network platform, which values ​​the company at US$ 1.5 billion. The actor participated in the capture through Dreamers VC. Paris Hilton and were also among the investors, as per Reuters. The FTX US exchange closed a deal to buy a stake in the IEX Group, parent company of the exchange that became known in the best seller “Flash Boys”. The partnership aims to unite regulatory and technological efforts to expand access to digital assets for institutional and retail investors, according to Bloomberg. The Clearbook2TM’s participatory investment platform, which controls the Bitcoin Market, announced an offer of BRL 800,000 for investment in goLiza, a startup of back office solutions for managers, reported Valor. The Goldman Sachs plans to offer over-the-counter Ethereum options in light of growing customer interest in the second-largest digital currency, according to Bloomberg. Last month, Goldman traded the first Bitcoin options in this modality.

Regulation, Security and CBDCs

digital euro: A European Union central bank digital currency (CBDC) would be subject to anti-money laundering controls, but not necessarily as stringent as those currently planned for private cryptocurrencies like Bitcoin, said Mairead McGuinness, commissioner for Financial Services at the European Commission, in an interview with CoinDesk on Tuesday. closed darknet: German investigators on Tuesday closed a Russian-language darknet market that would have focused on drug trafficking. According to the Associated Press, about $25 million worth of bitcoin was seized. The “Hydra Market” platform has been described as the largest illegal darknet market in the world. Martin Grantwho worked in the regulatory arm of the Federal Reserve of New York, left the US central bank after nearly 32 years to take the post of global head of regulatory affairs and integrity at JST Capital, a financial services company focused on digital assets, according to a statement. . On Thursday (7), the crypto market will be on the lookout for US Treasury Secretary Janet Yellen’s speech at the American University in Washington, D.C., at 10:30 am New York time. It will be Yellen’s first official speech focusing on digital assets and the US economy, according to CoinDesk. prison revoked: The Superior Court of Justice revoked the house arrest of Tunay Pereira Lima, accused of being one of the partners of GAS Consultoria, a cryptocurrency investment company led by Glaidson Acácio dos Santos, the ‘Pharaoh of Bitcoin’. Tunay was arrested on Monday night (4) by the Federal Police after Minister Jesuíno Rissato’s decision against habeas corpus.

Metaverse, Games and NFTs

Low: For analysts at Mizuho Securities, the lower interest in NFTs – signaled by Internet searches according to Google Trends – could affect the plans of exchange Coinbase in this market, which requires high investment, shows analysis published by Barron’s. Another who views this segment with skepticism is Sam Peurifoy, known for his online persona “Das Kapitalist”, and who turns 28 in May. Former Goldman Sachs and now CEO of Playground Labs, a company that combines video games and cryptocurrencies, and at the helm of Hivemind Capital Partners, a $1.5 billion crypto-focused venture capital fund, Peurifoy told Bloomberg that the people still don’t understand how the technology of NFTs works and that there are still doubts about the definition of what the metaverse is. Despite these questions, American fast-food chains Wendy’s and Chipotle Mexican Grill are testing new experiences in virtual worlds to try to better understand the marketing potential of the metaverse, according to the Wall Street Journal. And the metaverse can be a reality in people’s daily lives faster in Brazil than in regions like Europe and the United States, said Accenture executives, citing results of a survey carried out by the consultancy and published by Folha with Reuters.

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