The US Lawmakers Ask for Transparency
According to the release by Senator Hagerty’s office, the newly introduced bill would require stablecoins to be “backed by government securities with maturities less than 12 months or U.S. dollars” and requires stablecoin issuers to publicly release audited reports of their reserves that are executed by third-party auditors.
The so-called “Stablecoin Transparency Act” is a clear indicator that American lawmakers are stepping up to hold the $180B industry in accountability and transparency.
Transparency regarding stablecoin issuers has been a growing issue in the industry as Tether, the centralized entity that issued USDT has been called out for its deliberate concealments over its reserve status.
As outlined in the release, the bill wouldn’t equip regulatory bodies with the power to regulate the stablecoin industry out of existence or to “impose onerous requirements on stablecoin issuers.”
Representative Hollingsworth revealed that the purpose of the bill was not to stifle technological innovation and that the bill would give the industry an idea of what the regulatory compliances would be like in the future.
USDT & USDC – Two Stablecoin Giants Under the Spotlight
Tether, the largest stablecoin by market cap, has been caught in a series of criticism due to its lack of transparency regarding the status of its reserve. USDT is supposedly backed by a basket of liquid assets, yet the company has failed to disclose where the commercial papers come from on multiple occasions due to “privacy reasons.”
As of last July, it came to be a controversy that Circle, the company behind USDC, only held 61% of reserves in cash and cash equivalents, according to a report by Grant Thornton. A month later, Circle made a U-turn by aggressively converting its reserves entirely to cash and short duration US Treasuries, a move that aimed to reassure the USDC community.
As reported by CryptoPotato, Circle would hold its roughly $50B worth of reserves with The Bank of New York Mellon, one of the oldest banks in America.
Hayes sees Ethereum as an investment better than not only bitcoin but other L1 protocols, which are mostly overvalued. Plus, the transition scheduled to occur in the summer of this year will be the game-changer that puts Ethereum ahead of its competitors.
Ethereum as a Currency Bond
Arthur Hayes, the co-founder of BitMEx, didn’t shy away from his deep conviction on Ethereum in this most recent blog post. He stated that his target allocation for 2022 would be 25% BTC and 75% ETH. This came after the prior allocation as 50% BTC and 50% ETH at the beginning of the year.
Hayes made such an adjustment partly because he saw bitcoin as money while the post-merged ETH as a commodity-linked bond.
“ETH is a commodity used to power the computer, not a pure monetary instrument.”
In terms of the yield from staking Ethereum, Hayes quoted the analysis completed by Justin Drake, an ETH researcher who projected stakers could see an APR of around 8–11.5% after the transition. Hayes outlined that, for a 5-year ETH local currency bond, the ETH/USD price would have to decline 29.35% after five years – assuming an 11.5% yearly yield – for investors to lose money.
For hedging the risk of buying this “ETH bond,” investors can choose to sell a 1-year ETH/USD forward futures contract. Hayes wrote:
“The broker quoted me a mid-market premium of +6.90%. That means to hedge my local currency ETH bond, I actually RECEIVE income.”
To institutional bitcoin holders like Michael Saylor, who issued corporate bonds to purchase BTC, Hayes recommended that they should issue debt and purchase Ether instead. The reasoning behind it was that he saw that “a boring STONK” buying ETH will naturally be branded as a “Metaverse” and “DeFi” company, which can help hype up the stock price. Issuing ETH bonds, meanwhile, is a “positive-carrying” trade to the company.
Due to the proof-of-stake mechanism being much more environmentally friendly than the proof-of-work mechanism, Hayes argued, ETH bonds can attract ESG funds and are immune from regulatory concerns.
Hayes’s bullish take on Ethereum also derives from his analysis on the major “Ethereum killers” on the market. Ethereum has the largest number of developers compared to other L1 protocols, while This Price / Developer Ratio shows that Ethereum has the lowest score among all competitors.
“Ethereum has appx. 4,000 developers, which is 3x larger than the chain with the second largest cohort of devs, Polkadot, which has the second largest cohort of devs.”
Also, looking at the Price / TLV & Price / Address Ratio, Hayes concluded that Ethereum is the least expensive, with concrete performance that positions itself as a great investment against other smart contract platforms.
Expecting ETH to significantly outperform any L1 chain that is promoted as faster and cheaper than Ethereum, Hayes set the price target for Ethereum in 2022 as $10,000.
Aside from Bitcoin, which has gained over 5 billion percent in value since it started trading in July 2010, many other cryptocurrencies have turned average traders into millionaires within a few months.
One factor that reflects the upward momentum of digital assets is increased “hype” around a trend, and there are a lot of them in the crypto space. Over the years, the industry has moved from one trend to another, including ICOs, decentralized finance (DeFi), memecoins, non-fungible tokens (NFTs), and play-to-earn (P2E).
Interestingly, every new concept usually gives rise to a new set of crypto millionaires, with the more recent ones coming from move-to-earn tokens like STEPN’s Green Metaverse Token (GMT)
STEPN (GMT) has gained a massive 31,000% in profits since its token sale was conducted on Binance Launchpad on March 2. This means that anyone who received at least $1,000 worth of GMT tokens during the public sale and did not sell their bag would have made $300,000 as of April 1, when GMT traded at an all-time high price of $3.11.
What is the STEPN (GMT)?
STEPN is a move-to-earn cryptocurrency social-fi application built on the Solana network. The platform describes itself as a “web3 lifestyle app” that rewards users for maintaining a healthy lifestyle through walking, jogging, or running.
Move-to-earn is still a relatively new concept, but it is similar to the play-to-earn model because it adopts elements of Game-Fi, Social-Fi, and NFT. However, move-to-earn projects reward users for maintaining healthier lifestyles instead of solely playing games.
Since its public beta launch in December 2021, STEPN has seen tremendous growth, with the number of daily active users on the platform jumping from a measly 1,500 in January to over 100,000 in March. Many users are joining the STEPN app as they hope it will become the Axie Infinity of the move-to-earn model.
In January, the project raised $5 million in a seed round by selling about 16% of GMT supply to some of the big names in the industry, including Alameda Research, Solana Ventures, and Folius Ventures.
STEPN NFT Sneakers
To earn rewards, users are required to mint, buy, or rent NFT sneakers from the in-app marketplace and start walking, jogging, or running outdoors. Players can also increase their earning potential by leveling up or repairing their sneakers or by upgrading their attributes with gems.
The sneakers, which are degradable, have four attributes (efficiency, luck, comfort, and resilience) and five qualities (common, uncommon, rare, epic, and legendary). The collection also has four different types of sneakers – walker, jogger, runner, and trainers. The price of each sneaker varies depending on its type, rarity, or level.
STEPN GMT and GST Tokens
STEPN uses a dual token model like many P2E gaming platforms such as the popular Axie Infinity. This means that the STEPN ecosystem has two tokens dubbed Green Satoshi Token (GST) and Green Metaverse Token (GMT).
GST is STEPN’s unlimited supply utility token, while GMT functions as a governance token with a limited supply of 6 billion units. Although GST has an infinite supply, STEPN uses a burn mechanism to control the circulating supply. In other words, players have to burn GST to mint, repair, or level up their sneakers. The project also has a quarterly buyback and burn mechanism for GMT.
The STEPN app rewards users with both GST and GMT, but this depends on the users’ level and ownership status of the sneakers. For instance, new users or users renting sneakers can only earn GST, while sneakers owners who have leveled up can earn GMT.
Why is GMT Pumping?
There are a couple of reasons why GMT has gained over 30,000% in a month and more than 300% in the past seven days.
First, like many other crypto manias in the past, the move-to-earn model is fast becoming the hype and might even outperform play-to-earn. This has led to a significant increase in the number of users on the STEPN and more demand for GMT.
Also, earlier this week, a STEPN spokesperson gave subtle hints about a potential partnership deal with a major sports brand. The project took it a notch further by sharing an artwork containing hidden logos of popular brands Adidas, Nike, Asics, Head, and even Binance. The news spread like wildfire, and euphoria filled the air, which again led to more demand for GMT.
Vu sur le dernier Tweet de @Stepnofficial
Merci @MysaSatoshi #STEPN $GST $GMT pic.twitter.com/b5Pj8O2tye
— STEPN by FrenchBorg (@FrenchBorg) March 29, 2022
Terra’s Latest ATH
Most altcoins experienced enhanced volatility a couple of days ago, went back on the offensive yesterday, and have stalled today.
Ethereum, for example, dipped to $3,300 before it shot up to just over $3,500 yesterday. This became its highest price tag in three months. As of now, the second-largest crypto has calmed around $3,500.
Terra is the most significant gainer from the top 10 coins with a 9% increase. Consequently, LUNA registered a new all-time high just days after the previous one. According to CoinGecko, the latest peak comes at just shy of $120.
NEAR Protocol and Cosmos have also painted substantial price increases on a daily scale. As such, NEAR sits at $17, while ATOM trades above $32.
Binance Coin, Solana, Ripple, Cardano, Avalanche, Polkadot, Dogecoin, and Shiba Inu have displayed more modest price movements.
Moonbeam has surged the most from the top 100 coins with a 24% pump. ECash, Secret, Convex Finance, and Helium are next.
The crypto market cap has added around $30 billion since yesterday and stands at around $2.160 trillion.
Bitcoin Chills at $46K
Bitcoin also went through a massive price drop at the end of the week by dumping from $47,500 to a multi-day low of just over $44,000.
However, the bulls intercepted the move and pushed the asset north almost immediately. As such, BTC spiked to just over $47,000 hours later but failed to maintain that level and retraced by around a thousand dollars.
As of now, the cryptocurrency has regained some value again and sits around $46,400. Its market capitalization has remained well below $900 billion, while its dominance over the altcoins has been reduced to under 41% due to some of their gains.
ED is the economic intelligence wing of the Ministry of Finance, and it tracks high-value economic crimes. It took over the case in 2021 after several previous ones were registered against Morris Coin and its kingpin Nishad K.
Gafoor is the director of a shell company called Stox Global Brokers Private Limited, and he used to divert investors’ money to other shell entities. Arrested under the Prevention of Money Laundering Act (PMLA), Gafoor has been remanded in judicial custody, and ED is likely to request the court for Gafoor’s custody for interrogation, said reports in the Indian media.
Background of the Case
The Morris Coin fraud case originally came to light in September 2020 when one of the victims complained to local police in the Indian province of Kerala. The complaint pertained to ‘Morris Coin Investment Plan 300 days’, and the kingpin of the fraud, Nishad K, was arrested and later granted bail.
The police at that time could not realize the full magnitude of the fraud. After his bail, Nishad became traceless and reportedly left the country. ED, in its bid to trace him, has attached his properties in India.
In November 2021, the police arrested seven people after completing their investigation and realizing that 31-year-old Nishad had duped at least 900 investors to the tune of $160 million.
They were working as collection agents and conduits for Nishad, and their bank account details showed that they would transfer Rs 90-100 crore (approx. $1.3 billion) to different accounts associated with Nishad. The police found out that the money collected purportedly as investments in the ICO of Morris Coin, a non-existent digital coin, was diverted to shell companies and invested in real estate, among other immovable assets.
ED investigations have so far revealed that investors were asked to invest Rs 15,000 (approx. $190) for 10 Morris Coins, which will have a 300-day lock-in period. During that time, investors will receive returns of 3% per month.
Once the coin gets listed on the exchanges, its price would boom like that of bitcoin, Morris Coin agents promised the investors. This continued mostly during the lockdown period of 2020 until Nishad was arrested in September of the same year.
More Crypto Fraud Cases
In the past 15 days, this is the third crypto fraud case to be reported in Indian media. On March 27, CryptoPotato noted that the police in the Indian province of Gujarat arrested four persons, including a couple, for cheating a businessman by asking him to invest in bitcoin.
In another instance, a former top police official and a technical expert were arrested in the Maharashtra province for stealing crypto coins during the probe of a case in which they were assisting the police investigation.
The bulls are trying to break out of it, however, they have so far failed in closing a daily candle above it.
Unlike BTC and ETH, which are struggling at the daily MA-200 line, ADA has not yet managed to touch it. The important moving average currently lies around $1.5.
Technical analysis by Grizzly
The Daily Chart
Cardano has now calmed down following a 2-week solid increase. From the bullish side, the major challenge that ADA is currently facing is the static resistance at $1.26.
Breaking above this resistance is critical in order to continue the uptrend. If the price can break above this barrier, the next resistance lies at $1.5, intersecting with the daily MA200.
On the other hand, the first major support lies at $1.1 and then at $1. Considering the market conditions, it is more likely that ADA will retest the key resistance.
RSI 30-day: Moving upward in bullish zone towards the marked descending line.
Moving Averages Levels
The 4-Hour Chart
On the 4-hour timeframe, the resistance at $1.26, which was mentioned above, caused ADA to form a Cup & Handle pattern (marked by yellow).
Williams %R indicator has also entered bullish territory, which is a positive signal.
If the bulls can push the price higher and break this resistance (marked by red), Cardano’s path to the next resistance at $1.5 (MA200) will be smoother.
At the moment, all eyes are on Bitcoin. If BTC can break above the daily MA200 barrier and continue its upward path, the whole market will probably follow.
Explaining Proof of Work
To be clear, the environmental ‘lobby’ seeks not to end Bitcoin itself, but to see it shift toward a less energy-intensive security model. Former Sierra Club Director Michael Brune, who is advising the campaign, claims that Bitcoin is contributing too much to global warming in light of the severity of climate change.
“It’s important for anyone in a position to act, to act,” he said, as reported by the Wall Street Journal. “You can’t ignore that we are in a climate emergency.”
Bitcoin’s proof of work requires network users to compete at solving a highly difficult math problem for permission to create the next block. The winner is rewarded with newly minted Bitcoin, as well as proceeds from the network’s recent transaction fees.
To solve the problem fastest, miners must spend more computational energy than their competitors. Overall, the mechanism’s purpose is to make it costly for users to propose a block in the first place, incentivizing them to propose blocks in line with the network’s rules.
The nature of this competition has spurred the growth of Bitcoin ‘mining farms’ across the globe. These farms – collections of computers purpose-built for Bitcoin mining – cumulatively consume 136.79 terawatt-hours of electricity per year – more than all of Norway.
The Campaign Against Mining
This has raised concerns among the environmentally conscious in crypto, business, and politics alike – including Chris Larsen.
The Ripple co-founder wrote an op-ed last year advocating for Bitcoin to shift to a lower energy validation method. Now, he’s pledged $5 million to the new campaign against Bitcoin mining, adding to the nearly $90 million he’s donated to other environmental causes.
The campaign will be driven by Greenpeace USA, Environmental Working Group, and others to place ads in publications including New York Times, Politico and The Wall Street Journal. The ads will call out Bitcoin’s environmental impact, alongside specific industry leaders and figureheads. Some include Tesla CEO Elon Musk, Block founder Jack Dorsey.
Musk began accepting payment for Tesla cars in Bitcoin last year but ended the program precisely due to environmental concerns. Since then, he has noted Bitcoin mining’s greater transition to renewable energy and left the door open to possibly accepting Bitcoin again.
On the other hand, figures like Jack Dorsey have been actively working on ways for average people to mine Bitcoin from home.
Can Bitcoin Really Change?
Larsen’s goal is ambitious to be sure: he does not believe that more miners moving to renewable energy will be enough. In a Twitter thread on the subject, he argues that the incentives of the industry will always lead to some choosing to use oil and coal, which he deems “unacceptable”.
“Bitcoiners – I know many of you may not believe this, but I’m not trying to work against you here,” he stated.
However, a code change of such magnitude would be unprecedented for Bitcoin. The network has a tradition of upgrading quite rarely and using backward compatible soft forks at that. Multiple Bitcoin hard fork attempts including Bitcoin Cash and BitcoinPOS have all failed to compete against the original chain.
There are also worthy questions about whether miners would be willing to back an upgrade that negates their entire business model. Larsen proposes that new Bitcoin continue to be distributed to miners freely after the fork, based on a snapshot of their current hash rate before it occurs.
Ethereum has also used a proof of work consensus mechanism until now but plans to move away from it by July. The new mechanism will be “proof of stake”, which rewards transaction fees to the largest staker of ETH on the chain, rather than the biggest energy consumers.
Larsen makes clear that this effort is entirely his own, and not on behalf of Ripple.
Crypto’s Integration Among Americans: The Latest Figures
The blockchain-based entity – StarkWare – questioned 2,000 American adults of all ages to determine their viewpoint on the world of crypto and its future development. Per the results, 53% think the asset class represents the “future of finance.”
Among the 25 to 34 age group, this percentage is 68%, while among 35 to 44 year-olds, it is 61%, proving the theory that young people are much more discerning towards the industry than the older generations.
Additionally, 17% of the participants admitted they have invested in cryptocurrencies. The majority are constantly checking and adjusting their holdings. 82% said they have at least one crypto tracker on their phone, while 50% stated they “fiddle or amend” their possessions daily. Only 14% of the investors let a week pass without making changes.
Commenting on the matter was Eli Ben-Sasson – Co-Founder and President of StarkWare Industries:
“This poll shows how widespread crypto has become while indicating just how huge it will soon become. We see that young Americans, those who will soon shape the economy, are especially turned into crypto. It’s an important insight that they are investing in large numbers, and overwhelmingly convinced crypto will be “the future.””
The company commissioned the survey to mark the launch of its StarkNet platform. The latter aims to remove some obstacles when dealing with digital assets and build blockchain applications.
Uri Kolodny – Co-Founder and CEO of StarkWare – opined that there is “huge enthusiasm for crypto” among the broad society. However, “blockchain simply won’t be able to cope with growing demand” unless people in the industry start working “smarter,” he concluded.
Most Americans Are Aware of Crypto
The USA is, by all means, a main player on the cryptocurrency scene, while most of its residents have heard at least a little about digital assets. According to another research (conducted in November 2021), 62% of the 10,000 survey participants have basic knowledge about the matter, while 24% said they know a lot about the industry. Only 13% admitted they have never heard about bitcoin, ether, or any other coins.
The poll further revealed that the share of actual crypto investors back then stood at 16%. Men aged 18 to 29 are the most active demographic group in the sector, as 43% of them have invested, traded, or used digital assets.
- The Bitcoin network regularly produces new coins each time a block of transactions is added to its ledger.
- Each block is produced through a process called “mining”, whereby users race to solve a mathematical problem for completing the block using computer power.
- The first to produce the block is rewarded with the new Bitcoin, plus all relevant transaction fees.
- At Block 730002, the 19 millionth Bitcoin was mined at 16:21:29 UTC on April 1st. The creator scored 6.25 BTC as a reward, plus another 0.07 BTC in fees.
- Bitcoin’s supply is hard-capped at 21 million coins, as part of its design meant to resemble gold. That means over 90% of the supply is already in circulation.
- However, the remaining two million coins will not fully enter circulation until approximately the year 2140. That’s because the rate at which coins are produced is cut in half every 210,000 blocks.
- Bitcoin’s mining difficulty adjusts regularly so that blocks are produced once every ten minutes on average.
- Other cryptocurrencies don’t necessarily reward the constructors of blocks with new coins. For instance, BNB is a net deflationary cryptocurrency, that rewards its users purely through transaction fees.
- Binance Smart Chain also uses a proof of stake consensus mechanism, which uses “validators” rather than energy-intensive “miners” to secure the network.
- Chris Larsen – co-founder of Ripple – is now funding a campaign to see Bitcoin change its consensus to proof of stake. Ethereum has already planned to make that transition for years and is scheduled to do so by July 2022.
Bitcoin’s price is struggling to recover, and it is still trading below the 200-day moving average. This level is one of the most common indicators to determine whether an asset is in a bull or bear market. The cryptocurrency has been rallying in the past few weeks, and it even broke past the significant $45K resistance zone.
However, the 200-day moving average rejected it to the downside, and the price is currently being held by the $45K broken resistance level, which has now turned into support. If this level fails, a retest of the 50-day and 100-day moving averages would be the first target to the downside. On the other hand, if the price successfully breaks above the 200-day moving average, the $52K level would be the next significant obstacle.
On the 4-hour timeframe, it is evident that the price has been rejected from the top trendline of the large bearish flag pattern as the RSI was massively overbought. BTC has currently rebounded from the $45K level and is in a key range.
If a lower high and bearish trend is about to form, the $46K-$47K area would be a probable turning point. The RSI is also in equilibrium after recovering from a nearly oversold level following the impulsive drop from $48K.
Another bearish scenario would be for the price to form a relatively higher high, with RSI signaling a bearish divergence. Both scenarios would lead to a deeper correction to at least the $36K level and the lower trendline of the flag. A bearish breakout of this pattern would be the worst-case scenario as the price could drop to new lows below $33K. On the other hand, if the price breaks the pattern to the upside, both bearish scenarios would fail, and BTC might continue towards the $52K mark.
The most pervasive sentiment in international affairs over the last two years has been “uncertainty.” A worldwide pandemic, inflation-related fears, and, most recently, a geopolitical confrontation have all served as triggers for several unstable phases during the last two years.
It is often suggested to zoom out and look at the larger picture during times of uncertainty. The figure below, for example, depicts the bigger picture of Bitcoin’s supply dynamics based on the CryptoQuant data.
Realized Cap – UTXO Age Bands (%) is a measure that visualizes clusters of coins based on their lifetimes (the last time they were transferred) and their proportion of the overall realized cap. Coins ranging in age from three months to 5 years are displayed and distinguished by various colors, as mentioned in the chart’s narrative.
In summary, an increase in these age bands indicates HODLing and accumulation (green), while a decrease in them indicates selling and distribution (red) among mid to long-term holders.
The market is presently in an accumulation period, with the number of coins that have moved in the previous three months gradually growing.