Digest: The Main News On The Cryptocurrency Market (February 22-28)
This week, one of the main topics of discussion in the crypto space was the question, when will the Bitcoin correction end? While traders were making predictions for BTC, Nigeria has taken seriously the development of a “regulatory sandbox” for the crypto, Tesla has made more money on Bitcoin than selling electric vehicles, and Tether may finally celebrate the resolution of a 2-year conflict with the regulator.
There will be the regulation of cryptocurrency in Nigeria
Nigeria has come close to solving the issue of cryptocurrency regulation. The Securities Commission (SEC) has repeatedly tried to create a “regulatory sandbox for cryptocurrency”, but here, too, the Central Bank continues to “put a spoke in its wheels.”
Earlier, the SEC approved digital assets, but the Central Bank said “No!” in early February and banned financial institutions from serving crypto exchanges. However, the regulator did not take into consideration one “but”: Nigeria is already at such a level of acceptance of cryptocurrency by the society that it will not be possible to freeze this issue (even if really want to).
As statistics show, every third resident of Nigeria used cryptocurrency during 2020; every fourth has installed a mobile app for crypto payments. According to Google Trends, Nigeria dominates search traffic for the keyword “Bitcoin”. Realizing that the crypto train can no longer be stopped, the SEC and the Central Bank announced the beginning of a joint discussion of the regulatory framework for cryptocurrency. In this case, the words of Tim Agama, head of the SEC, are very revealing:
The loyalty of the SEC is also not devoid of a share of pragmatism: the regulator considers cryptocurrency as a channel for attracting foreign investment for the development of the Nigerian economy.
SushiSwap intends to join the Solana ecosystem
SushiSwap, a decentralized exchange, continues to sharpen its product “to perfection”, aiming to become “the best exchange on the DeFi market”. This time, the SushiSwap team announced that they are considering integrating with AMM Raydium, an automated market maker based on the Solana blockchain.
What is the purpose of this collaboration? SushiSwap claims that expanding with the Solana ecosystem will solve several problems at once: lower Ethereum transaction fees, increase token exchange speed, and set limit orders. As such, SushiSwap plans to provide broader trading and staking opportunities for small traders and investors.
A detailed integration plan, codenamed “Bonsai,” has been posted on the SushiSwap blog. The developers plan to use Raydium as a bridge to bring SushiSwap to Solana. Bonsai pools from SushiSwap are expected to be deployed on Raydium’s testnet in the first quarter of 2021.
According to the developers, the final product will be an additional offer on the SushiSwap page, which will retain the familiar user interface but it will connect to the Raydium backends. The market reacted immediately to this news: within 12 hours after the publication of the Bonsai offer, Solana, SOL, and SRM tokens have risen in price by about 27%.
The regulator dropped charges against Tether, but the fine of $ 18.5M will have to be paid
Tether can be congratulated – 22 months of legal red tape and claims from the New York Attorney General ended in a settlement agreement between the sides. According to the verdict, Tether and Bitfinex must pay a fine of $ 18.5 million and have pledged to report to the regulator quarterly on their reserves.
The story of the “Tether case” began back in 2018. Thereat, the General Prosecutor’s Office expressed doubt that the company’s bank accounts contained the same volumes of fiat currency as tokens on crypto-exchanges. The news of an $850 million loan that Tether provided to partner Bitfinex added fuel to the fire.
Allegations of artificial printing of stablecoins flew towards Tether to pay off the resulting deficit. Back in 2019, the New York Attorney General published investigation data, according to which only 74% of Tether’s stablecoins were backed by real cash reserves at that time. Of course, this news hit Tether’s reputation, but the company’s representatives continued to fight for “their truth” and eventually managed to achieve a settlement to the conflict.
The UAE may lead the ranking of the most crypto-friendly countries
Regulatory authorities of the UAE announced the development of a regulatory framework for cryptocurrency as part of the country’s development strategy for 2021. Perhaps, a lot of European countries should take the UAE as an example in solving the “cryptocurrency issue”. While other players in the global market are delaying the inevitable, the UAE already has a state licensing firm Kiklabb, which allows customers to pay for a visa and a trade license using cryptocurrency.
As part of the digital asset ecosystem development strategy, the UAE intends to transfer 50% of government transactions to the blockchain by the end of 2021. Unlike other countries, here the Central Bank plays in the cryptocurrency team, as evidenced by the decree on the development of a loyalty program for crypto companies. It is also planned to launch regulated crypto exchanges in the next few months.
Tesla made more money on Bitcoin than selling electric vehicles
Elon Musk is no longer the richest man in the world according to Bloomberg. The list of billionaires is again headed by Jeff Bezos with a capital of $180 billion. Some analysts associate Musk’s loss of primacy with a correction in the Bitcoin rate and a fall in the value of Tesla shares.
Tesla shares fell 13% this week from $890 to $698 for the first time since September 2020. Bitcoin price also dropped 17% on Tuesday to $48,170. The transition of Bitcoin to the phase of correction gave rise to the spread of the opinion that Tesla acquired “in the person of Bitcoin as a friend and an enemy.” But, if you look at Tesla’s profit from buying Bitcoin, most likely “friendly relations” reign here.
Tesla currently owns approximately 48,000 BTC. The company earned about $1 billion from Bitcoin in a month, which exceeded Tesla’s total profit from the sale of electric vehicles in 2020. Despite the current correction in Bitcoin, Tesla continues to be in positive territory as Bitcoin was bought at $39,000.
At the time of this writing, Bitcoin is stuck in the $44- $45,000 range. Analysts reacted rather calmly to the correction since they did not see signs of a “black swan” in the Bitcoin pullback.
Visa and Mastercard plan to increase commissions on credit cards
Payment giants Visa and Mastercard have announced an upcoming increase in credit card fees for online retailers, restaurants, and other merchandise providers. Oftentimes, consumers are unaware of the commissions that merchants pay on their customers’ credit card purchases. Today the commission is about 2% and is the subject of disagreement between the two camps – business and payment systems.
The commission increase was planned last year, but COVID-19 made its adjustments. On the one hand, the pandemic increased the demand for online shopping and allowed businesses to stay afloat, on the other hand, entrepreneurs faced high commissions. In such conditions, sellers will be forced to look for alternatives to payment systems, and digital assets will come to the fore in this race.
Of course, digital assets also require payment of transaction fees, but some may be cheaper alternatives to credit card payments. An additional advantage in the form of decentralization of the cryptocurrency can become the trigger that will gradually lure online business owners into the camp of digital assets.