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1. MT Gox selling pressure delayed to April
Mt. Gox creditors, eagerly waiting to receive nearly 138000 Bitcoins as an early repayment on 10, will now have to wait till April 6. The repayment process is expected to continue until October 30, 2023.
The delay in Mt. Gox’s repayment has negatively impacted Bitcoin’s trading price, which has fallen by 2.03% in the last 24 hours and is currently trading at $21,672. This news has come as a blow to the world’s largest cryptocurrency, Bitcoin, which is already under pressure.
A significant sell-off in the cryptocurrency market is anticipated to be sparked by the repayment delay, potentially pushing Bitcoin and other well-known cryptocurrencies back to lower levels. The future movement of Bitcoin will also be influenced by the unemployment rate, which is scheduled to be revealed on March 10.
2. kucoin sued
The New York Attorney General, Letitia James, has filed a lawsuit against cryptocurrency platform KuCoin for allegedly violating securities laws by trading in cryptocurrencies, offering a product called KuCoin Earn, and calling itself an “exchange” without registering with the state.
KuCoin trails Binance, Coinbase, and Kraken in trading volume among cryptocurrency spot exchanges, according to the data company CoinMarketCap. It raised $150 million in a funding round last May, giving it a $10 billion valuation. The lawsuit claims that KuCoin’s trading in popular virtual currencies, such as ETH, LUNA, and TerraUSD, violated the state’s securities law.
“One by one my office is taking action against cryptocurrency companies that are brazenly disregarding our laws and putting investors at risk,” James said in a statement. Last month, James sued the CoinEx cryptocurrency platform for failing to register with the state.
The lawsuit seeks a permanent injunction to prevent KuCoin from operating in New York until it complies with the law. This is part of James’ efforts to regulate “shadowy” cryptocurrency companies.
3. Biden wants to tax electricity used to mine cryptocurrency 30%
On Thursday, March 9, U.S. President Biden revealed his budget proposal for 2024. Under the Biden Budget, the U.S. Treasury Department is looking to introduce a 30% excise tax on crypto mining operations.
According to a section in the Treasury department’s 2024 revenue proposals document, the Biden administration advances the motion that “Any firm using computing resources, whether owned by the firm or leased from others, to mine digital assets would be subject to an excise tax equal to 30% of the costs of electricity used in digital asset mining.”
All cryptocurrency mining companies must provide reports on the quantity and cost of their electricity. As a result, this proposal will also apply to cryptocurrency mining companies that use off-grid energy sources like power plants, with the 30% tax determined by the anticipated cost of electricity.
4. Hawkish Feb, 0.50 rate hike and prolonged hiking likely, FOMC March 21-22
On Tuesday, Federal Reserve Chairman Jerome Powell cautioned that interest rates would likely head higher than central bank policymakers had expected.
Citing data earlier this year showing that inflation has reversed the deceleration it showed in late 2022, the central bank leader warned of tighter monetary policy ahead to slow a growing economy.
Powell stated the point in remarks prepared for two week-long appearances on Capitol Hill. “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” he said. We would be willing to speed up rate hikes if the totality of the data showed that more rapid tightening was necessary.
Stocks fell sharply while Treasury yields jumped after Powell’s remarks were released. Market pricing also titled sharply to a strong possibility of a 0.5 percentage point interest rate hike when the Federal Open Market Committee meetings March 21-22.
5. Shanghai ETH Unlock
According to cryptocurrency analytics company CryptoQuant, there will be less selling pressure when the staked Ethereum (ETH) tokens are unlocked in the Shanghai upgrade. There are worries that the market may get flooded with these tokens after the staked ETH unlock, leading to intense selling pressure.
But according to CryptoQuant analysis, 60% of staked ETH, representing 10.3 million ETH, is at a loss. Moreover, the depositors of the largest staking pool, Lido, are also at a loss. Lido holds nearly 30% of all staked ETH, with an average loss of around $1,000.
When investors have the opportunity to make enormous profits, there is typically a lot of selling pressure. When many assets are unstaked at once, it is typical to anticipate that some investors may wish to take advantage of the situation and exert selling pressure. According to CryptoQuant, there won’t be much selling pressure because Ethereum investors don’t have a lot of possibility for profit.
Early in January, Ethereum developers decided that the Shanghai update will take place in March 2023. The unlocking of ETH staked by validators is the only significant code change in the Shanghai upgrade. But the uncertainty regarding the unlocking period of staked ETH created much uneasiness among investors, who started questioning the future of the network. The start of withdrawals is expected to bring much-awaited relief to ETH validators.
6. Tether FUD
The Wall Street Journal has accused Tether Holdings Ltd of using falsified documents and shell companies to bank accounts and maintain access to traditional finance. The report found that Stephen Moore, one of the owners of Tether Holdings Ltd, knew about Tether traders in China circumventing the banking system by faking sales invoices and contracts for their deposits and withdrawals. Moore reportedly said in an email that he had signed these invoices and was afraid of potential fraud and money laundering cases stemming from them.
Tether responded to the allegations, dismissing them as “fear, uncertainty, and doubt(FUD).” The firm’s Chief Technology Officer Paolo Ardoino called the report a “ton of misinformation and inaccuracies,” while crypto influencer Samson Mow accused the WSJ of spreading “FUD” about Tether.
7. BUSD FUD
Binance Issued BUSD Market Cap Loses 45% Amid FUD Around Exchange.
Binance’s stablecoin, BUSD, experienced a 45% drop in market capitalization due to concerns around the exchange’s credibility and trustworthiness, as well as an order from the New York regulator to limit the issuance of BUSD. Despite this setback, Binance remains one of the largest exchanges in the world, but investors’ confidence has been shaken, causing a significant outflow from the platform.
Tether, BUSD’s competitor, has seen an increase in market capitalization during BUSD’s decline, indicating that the industry’s performance is not solely responsible for the drop.
The recent drop in the market capitalization of BUSD is a worrying sign for Binance and its users. Unfortunately, the exchange has been facing a lot of pressure from regulators as they have been actively questioning the solvency of the trading platform after the implosion of the FTX cryptocurrency exchange, which caused enormous losses for both institutional and retail investors.
8. SEC Cracking Down on Crypto
Coinbase CEO, Brian Armstrong, has shared “rumors” about the US Securities and Exchange Commission (SEC) working to ban retail-focused crypto staking offerings, a move that would impact Coinbase’s staking services. Staking, the process of locking native blockchain tokens to secure the network and receive rewards, has become a significant business line for centralized exchanges.
If the SEC successfully bans staking programs, decentralized alternatives like Lido and RocketPool will benefit. While staking has risks, it is part of an open-source process baked into a blockchain’s security, making it far less risky than rehypothecation-driven yield programs. This rumor is part of a widespread crackdown against the crypto industry.
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