Wednesday, 12 January 2022

Market Summary

Market Summary 12 January 2022

Bitcoin Price: U$43,880.72(+2.76%)
Ethereum Price: U$3,369.93(+4.11%)


US lawmaker proposes bill aimed at limiting Fed’s ability to issue CBDC

  • Minnesota Representative Tom Emmer has announced he will be introducing a bill intended to prevent the Federal Reserve from acting as a retail bank in the potential issuance of a digital dollar.
  • In a Wednesday announcement, Emmer said the bill would prohibit the Fed from issuing a central bank digital currency, or CBDC, directly to U.S. consumers. According to the Minnesota representative, having the government entity require users to open accounts to access the benefits of a digital dollar would “put the Fed on an insidious path akin to China’s digital authoritarianism.”
  • “The Fed does not, and should not, have the authority to offer retail bank accounts,” said Emmer. “Regardless, any CBDC implemented by the Fed must be open, permissionless and private. This means that any digital dollar must be accessible to all, transact on a blockchain that is transparent to all, and maintain the privacy elements of cash.”


Cash App integrates Bitcoin Lightning Network for faster BTC transfers

  • Popular mobile payments service Cash App has integrated the Bitcoin Lightning Network as a part of an update, allowing faster and cheaper Bitcoin (BTC) transfers using the layer-two (L2) payments protocol. 
  • Cash App is developed and owned by Block (formerly Square), a fintech firm co-founded by former Twitter CEO Jack Dorsey. The announcement of the Bitcoin L2 integration was shared as a notification on the official Cash App application.
  • The Lightning Network protocol addresses the noted limitations of the Bitcoin blockchain to improve speeds while reducing transaction fees. 


Bitcoin exchange outflows see biggest daily spike since September 2021

  • Bitcoin (BTC) investors are voting with their wallets as one-day outflows from major exchanges near 30,000 BTC. 
  • Data from on-chain analytics firm CryptoQuant shows that on Jan. 11, 29,371 BTC left exchange order books — the most since Sep. 10.
  • The four-month high in outflows corresponds to short-term optimism returning on Tuesday as BTC/USD bounced and maintained levels above $42,000.


IMF: Bitcoin matured to ‘an integral part of digital asset revolution’

  • Crypto is no longer an obscure asset class within the financial ecosystem, but a growing correlation with the stock market undercuts the “investment hedge” role of Bitcoin (BTC) and other cryptocurrencies, according to a new International Monetary Fund (IMF) research.
  • A blog post accompanying the survey highlights new risks associated with the growing interconnectedness between digital assets and financial markets. The article claims that the increasing correlation between crypto assets and stocks “limits their perceived risk diversification benefits and raises the risk of contagion across financial markets.”
  • “Crypto assets such as Bitcoin have matured from an obscure asset class with few users to an integral part of the digital asset revolution,” the article reads, adding that this transition comes along with financial stability concerns.


Jack Dorsey spearheads new fund to defend Bitcoin developers against legal action

  • Former Twitter boss Jack Dorsey is helping to launch a new fund that will help defend Bitcoin developers against litigation.
  • Its first port of call will be to come to the aid of the Bitcoin developers who are being sued by Craig Wright’s Tulip Trading Limited over an alleged “breach of fiduciary duty.” The fund will provide funding for outside counsel.


Crypto funds outperformed traditional hedge funds and digital asset benchmarks

  • A big rally in stocks over the course of 2021 did not translate into outsized returns at some of the world’s largest hedge funds. But their crypto counterparts were able to produce returns that beat both stock and digital asset indexes. 
  • In aggregate, hedge funds eked out a return of just over 10% last year, underperforming the S&P 500 index’s return of 26.9% as well as the aggregate performance of hedge funds in 2020. The lagging results of hedge fund managers are tied to their underexposure to big tech names like Apple and car-maker Tesla, which clocked in eye-watering returns in 2021. 


Coinbase announces ‘nearly the entire company will shut down’ for four weeklong breaks in 2022 to allow workers to recharge

  • Major United States crypto exchange Coinbase will be giving its employees one week off each quarter in 2022 to recharge after “long days and long weeks” of intense work.
  • In a Monday blog post, Coinbase chief people officer L. J. Brock said “Nearly the entire company will shut down” for four separate weeks this year as part of an experiment in allowing workers to recuperate after completing intense workloads. Brock said the exchange’s employees aren’t necessarily limited to 40-hour work weeks and may have to “pivot at a moment’s notice,” seemingly creating the potential for burnout.


‘Centralization issues’ are the biggest culprits of DeFi attacks: CertiK

  • Decentralized finance, better known as DeFi, may not be “decentralized” enough as attackers exploited centralized weak points to drain users of billions of dollars in 2021, according to research from blockchain security firm CertiK. 
  • In a new report on the state of DeFi security in 2021, CertiK researchers said “centralization issues were the most common attack vector” within decentralized finance. The blockchain security firm cited 44 DeFi hacks totaling $1.3 billion in lost funds in 2021. That’s an increase of over $500 million compared with 2021. 
  • “This underscores the importance of decentralization and highlights the fact that many projects still have work to do to reach this goal,” CertiK said, adding: “Centralization is antithetical to the ethos of DeFi and poses major security risks. Single points of failure can be exploited by dedicated hackers and malicious insiders alike.”


Iran to allow crypto payments for international trade: Report

  • The Central Bank of Iran, or CBI, and the Ministry of Trade have reached an agreement to link the CBI’s payment platform to a trade system allowing businesses to settle payments using cryptocurrencies, the Mehr News Agency reported Monday.
  • Alireza Peyman-Pak, Iran’s deputy minister of Industry, Mine and Trade and head of Iran’s Trade Promotion Organization, or TPO, said that the new payment mechanism is expected to be finalized “within the next two weeks.”
  • “We are finalizing a mechanism for operations of the system. This should provide new opportunities for importers and exporters to use cryptocurrencies in their international deals,” Peyman-Pak reportedly said.
  • He added that the government should not be ignoring the economic and business opportunities of the crypto industry, referring to major private cryptocurrencies like Bitcoin (BTC)

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