Cryptocurrencies: Why they’ve crashed and what it could mean for their future

Cryptocurrencies: why they’ve crashed and what it could mean for their future Credit: Shutterstock/WHYFRAME

If you had invested £100 (US$122) in the cryptocurrency Luna a month ago, you might have been quietly confident you’d made a sensible bet. But Luna’s value has since fallen drastically—at the time of writing, that £100 is worth around 4p (5¢).

Luna was by no means the only victim in a week where cryptocurrencies were down 30%. Some have recovered to a certain extent, but this still represents an aggregate seven-day loss of over US$500 million (£410 million), prompting existential questions about the future of the market.

This crash was possibly triggered by a financial “attack” on the stablecoin Terra (UST), which is supposed to match the U.S. dollar but is presently trading at just 18 cents. Its partner coin, Luna, subsequently collapsed.

An attack of this kind is extremely complex, and involves placing multiple trades in the crypto market in an attempt to trigger certain effects—which can provide the “attacker” with significant gains.

In this case these trades caused Terra to fall, which in turn brought its partner coin Luna down too. Once this was noticed, it caused panic, which in turn sparked market withdrawals, which then caused further panic. Some (but not all) stablecoins rely to a large extent on perception and confidence—and once this is shaken, big falls can come into effect.

Crucially, the recent major falls in cryptocurrencies have called into question just how stable stablecoins really are. After all, they are designed to have practically zero volatility by maintaining a “peg” to some other underlying asset.

Yet the effects seen this week spilt over in to the whole crypto space, to create single day losses akin to—or arguably worse than—a “Black Wednesday” for crypto (Black Wednesday was the day in 1992 when speculators forced a collapse in the value of the pound). Even the leading stablecoin Tether lost its peg, down to 95 cents on the dollar, perhaps demonstrating the need for regulation. For if stablecoins aren’t stable, then where is crypto’s safe space?

Crypto confidence

How investors respond will be key to the future of cryptocurrencies. We have already seen panic and despair, with some comparing this crash to a traditional run on the banks. But with bank runs, customers tend to be worried that their bank will be unable to give them their money, rather than worrying that their money has become worthless.

A more accurate comparison is with stock market crashes where investors worry that the stocks and shares they hold may soon be worthless. And so far, reaction to this crypto crash suggests that a large section of crypto holders view their investments in a similar way.

Notwithstanding historical price volatility, there is a basic assumption often seen in investor behavior: that the asset price will increase, and will keep on doing so. In this scenario the investor doesn’t want to miss out. They see the asset rising, consider it a “sure thing” and then invest.

Frequently buoyed by initial successes, the investor may then put in more. Combine this with social media and the fear of missing out on “inevitable” gains, and the investments continue.

Put simply, many will have invested in cryptocurrencies because they believed it would make them richer. This belief has no doubt been shaken.

But another motivation for investing in cryptocurrencies may be a belief in their transformational nature, the idea that cryptocurrencies will eventually replace traditional forms of financial exchange.

For these investors, any increase in the value of a cryptocurrency is a demonstration of the increasing power of cryptocurrency over traditional money. But likewise, a significant decline in the value of crypto is not simply a monetary loss—it is an ideological one.

At the same time though, this ideological stance creates an investor group far less likely to sell in the face of any sharp fall. And it is this group which may yet provide hope for the sector.

In established stock market crashes we talk of a return to “fundamental value.” The fundamental value of crypto is frequently assumed to be zero. However, perhaps there is at least some fundamental value which is based on belief. The size of the investor pool who own cryptocurrency because they believe in its long term future, and the promise of a new money, may determine that fundamental value of crypto.

Indeed, if we consider cryptocurrency investors as different groups with different motivations, we can better understand the behaviors we are seeing. Investors can perhaps take solace that we may have seen the worst of this crash and that better times may be ahead. But as any financial adviser will tell you, in crypto as in any other market, nothing is guaranteed.

This article is republished from The Conversation under a Creative Commons license. Read the original article.The Conversation

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TRADING PLATFORM FOR INTERESTS IN INSURANCE CONTRACTS: DEMO ON APRIL 29

, /PRNewswire/ — Extraordinary Re (!Re) today announces that it will be demonstrating its platform for trading interests in insurance contracts on April 29, 2022, at 10:30 a.m. EDT. The demonstration, by invitation only, is for asset managers and asset owners. For an invitation, please contact Joe Rosen at [email protected] or +1 347 647 0530.

Extraordinary Re’s secondary trading platform will enable asset managers and asset owners to build customized portfolios of insurance contract positions just like they would with stocks and bonds. The platform opens the $20 trillion universe of insurance liabilities to direct contract-level participation by the capital markets.

The demonstration of the trading platform on April 29 is a significant next step in the evolution of insurance finance. “The new asset class of insurance contracts will be valuable to investors of all strategies,” said Lee Van Slyke, CEO of !Re. “All portfolio management strategies may benefit, from value investing to technical analysis to buy-and-hold. Among the values to the investor is the non-correlation of insurance contracts with stocks and bonds,” he said.

!Re’s patented technology is embedded in a proprietary user interface and a matching engine licensed from NASDAQ. The system is integrated into a purpose-built Bermuda reinsurance company, Extraordinary Reinsurance Company Ltd. (ERCL), to allocate ERCL’s underwriting profit and loss to the portfolios created by the trading participants. In addition, each portfolio is allocated a part of the investment income of ERCL.

“Rather than trapping capital in fully collateralized instruments, this patented plan allows long-term investors to earn investment income on premium dollars that have not been paid out in claims and expenses. Fans of Warren Buffet will appreciate this ‘premium float’,” said Van Slyke.

About Extraordinary Re

Extraordinary Re https://www.extraordinaryre.com is a platform for the daily trading of insurance assets and liabilities. The company offers solutions for traders and institutional investors, along with insurance companies and intermediaries.

Media Contact: Joe Rosen, [email protected]

SOURCE Extraordinary Re

Source: https://www.prnewswire.com/news-releases/trading-platform-for-interests-in-insurance-contracts-demo-on-april-29-301527151.html

Big news for those who invest in cryptocurrencies – the government may announce soon

Tax on crypto has been announced in the budget, but the picture is not completely clear on this. Exchanges are entangled in this, investors are not able to understand the situation. Here are every update related to crypto-

Big news about cryptocurrency

What was the announcement of tax on virtual digital assets in the budget, crypto (CryptocurrencyThe whole world was shaken. investors (Investors) And for the exchanges doing the trading, there has been a situation of happiness, somewhere like sorrow. 30% tax on profits from crypto on investors (Tax) was killed. If you do trading then you will have to pay 1% TDS. Investors are unhappy about this. Unlike investors, the pain of exchanges is another. Exchanges are upset that 1% TDS (TDS) is going to increase the tax complications for them. Now most of the investors on these platforms are Indians who live across the ocean. Now the law says that 2% equalization tax is also levied on such investors. It is only from here that the confusion of exchanges has increased. For this reason, crypto exchanges want the government to completely clear the picture on the tax issue as soon as possible.

What is the government’s preparation

The government intends to introduce clear tax rules in this matter before April 1. The objective is to broaden the definition of virtual digital assets so that no future digital asset remains outside it.

Well, due to the tax in the budget, the exchanges are also relaxed about the fact that now if the tax is imposed, the government will not at least ban crypto…Investors are getting themselves registered on the exchanges.

Tax on crypto has been announced in the budget, but the picture is not completely clear on this. Exchanges are entangled in this, investors are not able to understand the situation. Here are every update related to crypto-@priyankasambhav @manuiimc pic.twitter.com/dwE46TffIf

— Money9 (@Money9Live) February 8, 2022

An exchange excited by the increasing number of investors has even launched SIP in crypto. That is, keep buying crypto every month by investing a little money.

Three Indians, who founded Polygon, a secondary scaling solution for the Ethereum blockchain, have also received funding of $450 million. That is, even big investors remain bullish on companies related to crypto.

In contrast to the turmoil of crypto, the Reserve Bank is rapidly preparing to launch its own digital currency. RBI is feeling that if digital currency comes, then its cost of printing notes will be very less.

Also read- Budget 2022: Investors in confusion regarding TDS on securities, the government can solve it in the budget!

,

Shehnaz Ali

Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

— Money9 (@Money9Live) February 8, 2022

Source: https://www.newsncr.com/business/big-news-for-those-who-invest-in-cryptocurrencies-the-government-may-announce-soon/

FTX Teams with StockTwits To Ease Crypto Trading Experience for Traders –

Popular social media platform devoted to investors, traders, and entrepreneurs, SocialTwits has collaborated with the Bahamian cryptocurrency exchange FTX to venture into the industry. With this integration, StockTwits will allow investors to purchase and trade cryptocurrencies directly through the official app interface. The company is looking forward to expanding its services in the multi-billion-dollar crypto space by providing fans with an all-in-one trading portfolio.

According to the official announcement, the first phase of the pact will help users to avail seamless access to all the top-tier cryptocurrency assets trading on the exchange portal. The deal will allow more than 6 million users of StockTwits to trade their favorite tokens without leaving the social platform securely and with full transparency.

Earlier, in 2021, StockTwits pooled $30 million in a funding round led by FTX owner Sam Bankman Fried’s VC fund, Almeda Research Ventures, to support its growth plans. Talking about it, Head of Product at FTX, Ramnik Arora stated that the firm is happy to collaborate on providing aid for expanding the outreach of cryptocurrencies to traditional investors. The partnership was undertaken to help StockTwits increase its network coverage and user volume.

For those who love Crypto Twitter, StockTwits will be a likable venture. The portal is not only limited to crypto, however, but the participants can also set up a watchlist to choose their favorite tickers. When someone looks for a specific crypto coin or stock, StockTwits disclosed the recent price chart, trading volume, market trends, and most recent tweets shared by other investors about the token inquired by the person.

The FTX crypto exchange hub has been growing exponentially through its strategic collaborations with top-tier firms. Ever since it purchased the crypto information and price tracking portal, Blockfolio, the exchange started venturing into new partnerships aimed towards diversification and innovation. The company purchased the naming rights for the NBA Miami Heat stadium, formerly called the American Airlines Arena. Presently, one of the most popular basketball teams in the U.S play and train at the FTX Arena. The most prominent achievement of the exchange was the acquisition of LedgerX that helped to provide derivatives trading in the U.S. The recent data revealed by the FTX owner showed that the user base of the exchange increased by 60% whereas the trading volume averaged $14 billion signaling towards its success in the crypto field.

Source: https://www.blockchain-council.org/news/ftx-teams-with-stocktwits-to-ease-crypto-trading-experience-for-traders/

Top cryptocurrencies gain, but Bitcoin continues to stay below $40,000 price level

Bitcoin Top cryptocurrencies gain, but Bitcoin continues to stay below the $40,000 level Image Credit: Shutterstock

The top cryptocurrencies gained on Friday as strong earnings from tech giant Amazon.com Inc. bolstered confidence in technology stocks, which digital tokens have largely tracked over the past months.

Bitcoin rose as much as 2.9 per cent to $38,043, while Ether rallied as much as 5.6 per cent to $2,810. Both tokens jumped in Asia’s early afternoon after trading sideways for the last few days.

The major cryptocurrencies have been largely trapped in a range over the past couple of weeks. Their struggle to break out came as growth stocks and other riskier assets faltered amid concern about the impact of imminent Federal Reserve rate hikes and a trend toward tightening of monetary policy globally.

At the same time, the range-bound trading offered some relief for crypto bulls who see it as a sign that the sharp selloff that began in November may be mostly over. The Nasdaq 100 Index, by comparison, tumbled 4.2 per cent Thursday on dismal results from Facebook parent Meta Platforms Inc.

“Bitcoin continues to consolidate below the $40,000 level,” said Edward Moya, senior market analyst at Oanda, in a note Thursday. “Bitcoin is forming a base and considering the selloff in tech stocks crypto investors should be feeling a bit more optimistic that the bottom is in.”

Bitcoin Bitcoin to bottom out soon?

Bitcoin to bottom out soon?

Bitcoin stands a good chance of bottoming by the next few months, according to a technical analyst at Fundstrat.

The largest cryptocurrency has stabilized recently after falling about 50 per cent from a record in November. According to a pricing model tracked by Fundstrat’s Mark Newton, there’s a “good likelihood” that the low for Bitcoin is coming by the spring months.

Still, he cautioned against getting bullish now. “This minor two-week bounce might still be premature in expecting a new intermediate-term rally has begun,” Newton said.

Among key technical levels to watch, prices moving above $40,000 would be important for bulls, he added. A decline under $35,511 would set up a test of $32,950, around the January 24 intraday low, he said.

Bitcoin has declined in recent weeks amid a global rout in risk assets on growing concerns about a hawkish Federal Reserve. Tokens like Bitcoin and Ether are growing more correlated with assets like stocks as more traditional investors start to jump in.

Even if Newton expects a bottom sometime soon, he’s still thinking cautiously.

“Until $40,000 is exceeded on a daily close, it remains in a downward sloping pattern, and it’s tough to rule out further weakness technically speaking,” he wrote.

At the same time, the range-bound trading offered some relief for crypto bulls who see it as a sign that the sharp selloff that began in November may be mostly over. The Nasdaq 100 Index, by comparison, tumbled 4.2 per cent Thursday on dismal results from Facebook parent Meta Platforms Inc.

Source: https://gulfnews.com/your-money/cryptocurrency/top-cryptocurrencies-gain-but-bitcoin-continues-to-stay-below-40000-price-level-1.1643964678194

Hedge Fund and Insider Trading News: Dan Loeb, Leon Cooperman, Algebris Investments, Fortress Investment Group, Home Bancorp, Inc. (HBCP), and More

Loeb’s Third Point Hedge Funds Slump as Much as 10% in January (Bloomberg)
Dan Loeb’s Third Point is emerging as one of the biggest hedge fund losers of January as volatile stocks hurt some money managers. The firm’s largest Third Point Offshore fund lost 7.6%, while the Third Point Ultra fund slumped 10%, according to an investor letter seen by Bloomberg. The declines erased a portion of the 23% gain in the Offshore fund and a 27% surge in the Ultra fund last year, another document shows.

Billionaire Investor Leon Cooperman Prefers to Shop for Clothes Wholesale and Seems to Like Costco Lamb Chops, According to Interview (Business Insider)
Billionaire investor Leon Cooperman says he prefers to shop wholesale for clothes, appears to favour Costco lamb chops, and rides a vintage Schwinn bicycle around his neighbourhood, according to an interview he gave to The Washington Post. Cooperman, whose fortune is estimated at $2.5 billion, also said he owned a Hyundai, which he used for running occasional errands.

Algebris Appoints New Chief Investment Officer (Hedge Week)
Algebris Investments has appointed Sebastiano Pirro as Chief Investment Officer at Group level with effect from 1 February 2022. In his new role, Pirro will lead the investment team and focus on the evolution of the firm’s investment process across the range of liquid strategies. Pirro will maintain his responsibilities as portfolio manager of Algebris Financial Credit and Algebris IG Financial Credit, and will continue to report to Davide Serra, Founder and CEO.

Countries with the Smallest Government Per Capita in the World

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Indecap to Bin Long/Short Fund (Hedge Nordic)
Stockholm (HedgeNordic) – Indecap Fonder’s long/short equity fund, Guide Avkastningsfond, will merge into one of the asset manager’s funds at the end of February. Guide Avkastningsfond has generated a cumulative loss of 4.3 percent since the fund started employing a long/short equity strategy in mid-December 2018. The fund had previously operated as a fund of funds.

The Role of Venture Capital in ESG Investing (Preqin)
Venture capital investors’ ESG adoption is relatively low, but their potential impact and economic opportunity make a convincing argument. LPs that allocate to venture capital have not been as keen to sign on to major ESG organizations as investors in other asset classes. According to data on investor signatories from Preqin Pro, the number of venture investors (661) that have signed up to the most popular and widely accepted ESG-investing organization, Principles for Responsible Investment (PRI), was ahead of only natural resources (597) and hedge fund investors (587).

(BANC)Airbnb Inc (ABNB)Algebris InvestmentsBanc Of CaliforniaBill AckmanCapital One Financial Corporation (COF)Daily NewsletterDan LoebElectronic Arts Inc. (EA)ESGFortress Investment GroupGameStop Corp. (GME)George SorosGuide Avkastningsfondhedge fundHedge FundsHome Bancorp Inc. (HBCP)IncInsider BuyingInsider SellingInsider TradeInsider TradesInsider TradingKen GriffinLeon CoopermanMelvin Capital ManagementNASDAQNASDAQ:ABNBNASDAQ:EANASDAQ:HBCPNYSENYSE:BANCNYSE:COFPershing Square Capital ManagementPreqinPrinciples for Responsible Investment (PRI)Softbank Group CorpThird Point LLCShow more…Show less

Source: https://www.insidermonkey.com/blog/hedge-fund-and-insider-trading-news-dan-loeb-leon-cooperman-algebris-investments-fortress-investment-group-home-bancorp-inc-hbcp-and-more-1023063/

Investors should buy the dip in Tesla as the stock will rebound sharply, Credit Suisse says

  • Investors should buy the dip in Tesla as the stock is set to rebound, Credit Suisse has said.
  • The bank’s analysts said the company is leading the electric-vehicle race and now looks cheap.
  • Tech stocks have fallen sharply in 2022 as the Federal Reserve has geared up to raise interest rates.

Tesla stock is looking cheap after the major market sell-off and investors should buy the dip, Credit Suisse analysts said in a note Monday.

“With the market disproportionately punishing growth stocks in the past month, we believe an attractive entry point has emerged for Tesla,” analysts Dan Levy and Trevor Young wrote.

They upgraded their official rating on the stock to “outperform” and stuck with their forecast that Tesla would rise more than 10% to $1,025 over the next 12 months.

Tesla was up 9.06% on Monday morning to $923.02 after Cathie Wood’s Ark Invest company snapped up some shares last week and as technology stocks broadly rebounded. Its gain cut its year-to-date drop to around 13%.

Stocks have fallen sharply in 2022 as investors have prepared for the Federal Reserve to turn off the stimulus taps and raise interest rates in an effort to tame inflation.

But Credit Suisse’s analysts said Monday that the outlook for Tesla remained bright. They said Elon Musk’s company is at the heart of the electric-vehicle revolution, and is leading the way with its products.

Read more: UBS’ investment chief identifies 4 critical tech industries to start carefully buying the dip in after the correction

“We expect both further volume growth and sustained margin strength for Tesla,” Levy and Young wrote. They added that they expected profits to come in above forecasts.

“With robust fundamentals ahead and with the stock having been caught in the market decline, we believe the stock should recover.”

Deutsche Bank and Morgan Stanley last week both said they were upbeat about Tesla, despite the company warning that it would have to slow production due to supply chain issues.

Deutsche gave a 12-month stock price target of $1,200, while Morgan Stanley gave a target of $1,300. However, JPMorgan has remained downbeat, giving a target of $325.

The Nasdaq 100 was up more than 1.9% on Monday morning as Tesla and other technology companies rebounded.

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Tesla stock is looking cheap after the major market sell-off and investors should buy the dip, Credit Suisse analysts said in a note Monday.

Source: https://markets.businessinsider.com/news/stocks/tesla-stock-price-outlook-credit-suisse-buy-dip-elon-musk-2022-1?op=1

Bitcoin and other cryptocurrencies are growing up and facing new scrutiny. Will they earn your trust?

They may lose their renegade image, but the Wild West is no place for average investors

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  • Cryptocurrencies are surging in popularity
  • But they remain largely unregulated
  • The government may take a more active role

Like a teenager forced into adulthood, cryptocurrencies are finally growing up – with plenty of drama along the way.

With investors having sunk an estimated $1.7 trillion into crypto, the Biden administration is reportedly taking a look at whether to further regulate digital currencies, a move that could rein in their renegade image.

In another sign that crypto is going mainstream, investors have taken note that crypto’s price gyrations appear to correlate with the milder ups and downs of tech stocks. The observation defies the image of crypto as cutting its own path, devoid of attachments to either stock markets or governments.

It may be no coincidence that the closer alignment between crypto and stock prices come as digital assets are being promoted more by the traditional financial establishment, no longer defying it.

►Crypto 101: Here are 10 cryptocurrency terms people use every day from blockchain to NFT

Crypto’s role

Supporters say give crypto time to come into its own.

“For now, people don’t know what to make of blockchain assets and crypto” so coins trade in rough tandem to markets, said Ted Jenkin, a certified financial planner and CEO of oXYGen Financial. “Over time, it will be an uncorrelated asset,” parting ways with the markets.

As such, he said crypto is worth adding to portfolios as a hedge against more traditional investments. But he urges investors to be level-headed in choosing their coins and make them no more than 5% of their portfolios, similar to how they treat precious metals.

It’s easy to see why limiting exposure to crypto can be prudent move. The price of Bitcoin alone has fallen dramatically from its November high. A coin has ranged in value from $28,893 to $68,789 over the past year. It was trading Sunday at $38,144, reports Yahoo Finance..

Bitcoin’s troubles are just the latest in a series of gyrations that has made crypto synonymous with price volatility and a tough asset for many investors to understand.

There remain few places to spend Bitcoin and unlike stocks, its value is not usually tied to underlying assets like product sales or buildings and equipment. Since buyers can be anonymous, crypto has been the preferred medium of exchange in ransomware attacks and other criminal activity. U.S. Sen. Dianne Feinstein, D-Calif., last weekrequested federal agencies to report on how they track whether cryptocurrencies are used in drug or human trafficking.

►Investing with crypto: Cryptos are now in 401(k)s. Are they the right investment for your nest egg?

Investors lack protection

With little government oversight, some believe cryptocurrencies are susceptible to price manipulation through a process called “spoofing,” involving large trade orders that are placed with no intention of them being fulfilled with the hope of moving the price by drawing out trades from other investors.

Yet the number of cryptocurrencies continues to proliferate. A site that tracks cryptocurrencies and their prices, CoinGecko, reports that as of Sunday, it is tracking the prices of 12,388 cryptocurrencies that collectively have a market cap of $1.82 trillion. Of them, 40% of the market is held by Bitcoin and another 17% by second-place Ethereum.

Given the amount of investment in crypto and the potential impact its swings could have on the economy, the Biden administration is reported to be weighing new regulations that could help bring some order to the chaos.

Bloomberg News recently disclosed the Biden administration is preparing an executive order that could be released as soon as February that require federal agencies to look at their potential risks as well as the opportunities cryptocurrencies present. It also reported in December that U.S Sen. Cynthia Lummis, R-Wyo., is preparing legislation around cryptocurrencies.

Regulation might provide new underpinnings that boost the popularity of crypto.

“Regulation equals validation,” Jenkin said. “If cryptocurrency becomes regulated, it validates it is an asset that should be part of everyone’s portfolio.”

►Why did crypto lose so much? Uncertainty in traditional markets and Fed concerns, experts say

Eyed suspiciously

But governments around the world have generally viewed crypto suspiciously. The country first to adopt Bitcoin as its legal tender, El Salvador, drew a warning from the International Monetary Fund that its decision is ill advised and should be reversed.

“There are large risks associated with the use of Bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities,” the IMF said last week.

Some of crypto’s biggest supporters have been young investors. It’s a generation that has never known a time without smartphones or the Internet, making the digital nature of crypto all the more appealing, notes Nick Casares, head of product at PolyientX, a platform for nonfungible token (NFT) projects. NFTs, aimed at allowing people to buy of digital assets, are often associated with cryptocurrencies.

“When you have young people coming from a perspective of everything is digital and everything is tied to an app….crypto feels like a more comfortable way to manage your personal resources,” Casares said.

Like many of its investors, crypto is still young, but as it matures, Casares predicts it will “fall in line as a subsection of the financial sector” and be less correlated to stocks.

independent and freedom-seeking – much like adulthood.

Source: https://www.usatoday.com/story/money/personalfinance/2022/01/30/bitcoin-cryptocurrencies-maturing/9251420002/

Russian Investors to Pass Exams Before Buying Cryptocurrencies, Draft Law Suggests – Regulation Bitcoin News

Russian Investors to Pass Exams Before Buying Cryptocurrencies, Draft Law Suggests

A new Russian law may oblige potential crypto investors to take a test before being allowed to purchase digital assets over a certain limit. The authors are also hoping to regulate cryptocurrency mining and cut access to cheap energy for those who mint coins in their homes.

Bill to Bring ‘Tight Regulation’ to Crypto Industry, Strict Requirements for Investors

Russian lawmakers are working on a law to fill regulatory gaps in the crypto space. The legislation may introduce special exams for non-qualified investors who want to buy cryptocurrencies with a total annual value exceeding 600,000 rubles ($7,700). One of its sponsors, the Deputy Chair of the parliamentary Security and Anti-Corruption Committee Andrey Lugovoy, told the daily Izvestia that the new law is about “tight regulation” of the sector.

The bill is expected to hit the floor of the State Duma during the spring session of the lower house of parliament, the deputy noted. Before that, it will be discussed with relevant ministries, law enforcement agencies, and market players. Any amendments will be approved by a working group comprising members of the Duma and representatives of government institutions, including the Central Bank of Russia.

The monetary authority has been at loggerheads with other regulators over its hardline stance on cryptocurrencies. In a recently published consultation paper, the Bank of Russia proposed a wide-ranging ban on crypto-related activities such as issuing, trading, and mining which has failed to gain support from the executive and legislative powers in Moscow.

New Law to Regulate Crypto Mining and Exchange

Andrey Lugovoy also revealed that the upcoming law will attempt to regulate cryptocurrency mining which has been expanding in Russia, especially after the crackdown on the industry in China. Besides companies, ordinary people in energy-rich regions have found an additional income source, taking advantage of subsidized electricity with crypto farms running in basements and garages.

Electricity tariffs for these miners should be the same as those for businesses, the lawmaker told the publication, insisting that “garage mining” with cheap household power should be stopped. In late December, the federal government took a step in that direction by allowing regional authorities to raise electricity rates for residential areas when consumption exceeds a certain threshold.

The authors of the bill plan to clearly define which entities will be permitted to work with cryptocurrencies. These will include authorized banks, provided they obtain a special license, crypto exchanges, and other digital money exchangers. Foreign-based crypto trading platforms that want to operate in the Russian Federation will be subject to a “special” registration regime, Lugovoy remarked without elaborating further.

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What do you think about the crypto regulations discussed in the Russian parliament? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

IMF Tells El Salvador: Costs of Making Bitcoin Legal Tender Exceed Potential Benefits

Russians Aware of Bitcoin Divided on Proposed Crypto Ban, Poll Finds

Image Credits: Shutterstock, Pixabay, Wiki Commons

Electricity tariffs for these miners should be the same as those for businesses, the lawmaker told the publication, insisting that “garage mining” with cheap household power should be stopped. In late December, the federal government took a step in that direction by allowing regional authorities to raise electricity rates for residential areas when consumption exceeds a certain threshold.

Source: https://news.bitcoin.com/russian-investors-to-pass-exams-before-buying-cryptocurrencies-draft-law-suggests/

Bitcoin’s volatility won’t shake the confidence of institutional investors, 2 experts say

  • Prices for cryptocurrencies have largely dropped in 2022 in volatile price action.
  • While big intraday swings and price action are dramatic, institutional investors aren’t deterred by its overall growth prospects, said experts.
  • Bitcoin “doesn’t seem to be scaring off the institutions. In fact, they’re capitalizing off of it,” said one crypto expert.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin and the broader cryptocurrency market’s wild ride at the start of 2022 is unlikely to deter institutional investors from trying to capture a piece of the overall growth of digital assets, according to two cryptocurrency experts.

Bitcoin has tumbled 20% so far this year, trading around $36,900 on Friday. The move builds on its 19% slump in December. Ether, the biggest so-called altcoin, has suffered a 33% loss this year, trading around $2,470 as this week wound down. The cryptocurrency market as a whole marked a 24% decline during Friday’s session, to a valuation of about $1.67 trillion, according to CoinMarketCap.

Stocks have also been subjected to sharp losses this year as investors reprice assets to prepare for the Federal Reserve to raise interest rates at least four times this year to tame hot inflation. The S&P 500 index has touched correction territory and the Nasdaq-100 index, which hosts mega-cap tech stocks, is in a correction, or a drop of 10% or more from a recent high.

“Pretty much everything is down to start off this year. Bitcoin has more volatility and crypto, in general, has more volatility, because those are the kind of coins that will go up 100% in a year and you don’t see the S&P or the Dow Jones [Industrial Average] do that. So it’s important to keep it relative,” said Chris Kline, COO and co-founder of Bitcoin IRA, whose app allows users to invest in crypto with retirement accounts.

For crypto investors, “there’s no secret to the swings that this product can take,” he told Insider this week.

While they have been selling off in recent months, crypto saw big gains overall last year. Bitcoin, the most-traded cryptocurrency, surged 60% in 2021. And ether, the token of the ethereum blockchain, logged a stunning 400% jump.

Kline said much of the gains were driven by large institutions and companies, such as investment bank Goldman Sachs, implementing or expanding bitcoin as part of their business and investment strategies.

Bitcoin, which was first minted in 2009, is in its “adolescent stages” and volatility tends to be high in the early years of an asset class, said Kline.

It “doesn’t seem to be scaring off the institutions. In fact, they’re capitalizing off of it. El Salvador last week bought [more] bitcoin. MicroStrategy bought more and new players are positioning in this space,” he said.

El Salvador, the first country to make bitcoin legal tender, bought 410 bitcoin “for only 15 million dollars,” as the price slumped, the country’s president, Nayib Bukele, said last week. El Salvador holds more than 1,500 bitcoins, according to CoinDesk, and the country plans to issue a $1 billion, 10-year bitcoin bond this year.

Enterprise analytics software maker MicroStrategy also took advantage of bitcoin’s price slump in December and bought $94 million worth of the digital coin. CEO Michael Saylor told Bloomberg last week he has no plans to change its bitcoin acquisition plan despite the cryptocurrency’s price slide.

MicroStrategy in 2020 became the first publicly traded company in the US to buy and hold bitcoin as part of its balance sheet. It has since accumulated about 124,391 bitcoins recently worth about $5 billion, according to Bitcoin Treasuries.

Meanwhile, financial firms are suggesting investors gain exposure to digital assets, said Eric Chen, CEO and co-founder of Injective Labs, a decentralized exchange incubated by crypto exchange Binance and backed by billionaire investor Mark Cuban.

“Industry letters are being sent out amongst larger investment vehicles and institutions that are still recommending adding cryptocurrencies or digital assets into the portfolio, even though it might be a single-digit percentage for diversification or something lower than that,” he said. “I think the price volatility, or the general broad market sell-off, hasn’t affected institutional interest as of today.”

And Kline at Bitcoin IRA said investing in cryptocurrencies is still about the fundamentals.

“We’re seeing infinite money supply and we’re seeing the finite supply. One’s really volatile. The other one will have consequences to that growth over time and we’re already seeing it with inflation over 7% into Q4” he said, referring to the US consumer price inflation report for December.

Bitcoin and the broader cryptocurrency market’s wild ride at the start of 2022 is unlikely to deter institutional investors from trying to capture a piece of the overall growth of digital assets, according to two cryptocurrency experts.

Source: https://markets.businessinsider.com/news/currencies/bitcoin-outlook-volatility-confidence-institutional-investors-experts-cryptocurrencies-btc-ether-2022-1?op=1