Read in the digest:
- The European Union has voted against a proposed ban on Proof-of-Work cryptocurrencies like Bitcoin and Ethereum, causing a jolt in prices.
- Binance has secured a license to operate in Bahrain, while Coinbase’s trading volume continues its downward spiral.
- Cryptocurrency trading volumes are in decline in Russia after traditional payment platforms suspend their operations and the wealthy turn to Dubai as a haven.
- Terra founder wagers $1 million on the future price of Terra’s (LUNA).
EU Halts Ban on PoW Cryptos, BTC Attempts Recovery
The European Union voted against the proposed plan to ban the mining of Proof of Work cryptocurrencies like Bitcoin and Ethereum. The rule was part of the ‘Markets in Crypto Assets (MiCA)‘ framework. 32 members voted against the proposal, while 24 voted in favor.
The resolution of the vote will see Bitcoin regulated by the EU Sustainable Taxonomy, not by MiCA. Members of the European People’s Party, the European Conservative Party, and the Renew movement formed the bulk of representatives that opposed the proposition.
In the wake of the euphoria from the result, Bitcoin experienced a small rally, causing it to exceed $39,000, though it failed to break the $40K resistance level. There is a palpable fear among investors that if the asset fails to break the mark, it could head downhill from here.
The 1-day price chart of Bitcoin (BTC). Source: CoinMarketCap
Flipsider:
- The number of short-term holders of the asset are in steep decline, and some believe that this may be an indicator of bearish sentiment.
Why You Should Care
A ban on Bitcoin mining across Europe could have been a near-fatal event for the cryptocurrency. Europe is one of the leading continents in terms of BTC usage and its member states have a significant number of mining farms.
Binance’s Bahrain License as Coinbase’s Trading Volume Dips
The largest cryptocurrency exchange in the world has scored yet another win after it successfully acquired a special crypto-asset service provider license in Bahrain. The license was issued by the country’s central bank, and Binance’s CEO praised the stringent due diligence process that the bank adhered to.
Bahrain nurses the ambition of becoming the leading crypto hub in the gulf, and the issuance of the license is thought to be a step in the right direction. Khalid Humaidan, CEO of the Bahrain Economic Development Board, stated that “Team Bahrain has built a world-class infrastructure to support the fast-growing blockchain and crypto industry.”
While Binance has been forging new partnerships, Coinbase’s volume dropped for the second month in a row. The exchange’s total trading volume was pegged at 93 billion in February, which pales in comparison to the $124 billion that it attained in January, and the low number of listed assets is viewed as a major reason for the decline.
Flipsider:
- Bahrain’s oil-rich neighbors, the UAE, have taken significant steps to become the leading crypto hub in the Middle East, with FTX being granted a license to open a local headquarters in Dubai.
Why You Should Care
Centralized cryptocurrency exchanges are facing a rough patch as regulators clamp down on their operations. It is refreshing to see wins in countries in the Gulf.
Russian Crypto Volumes Drop, Wealth Shifted to Dubai
Russian access to cryptocurrencies has been significantly impacted after conventional payment platforms like Visa and Mastercard suspended operations in the country. The fall-out has caused a stark decline in cryptocurrency trading volumes, especially in Bitcoin and Tether markets.
Overcome with panic, wealthy Russians have turned to Dubai to protect their wealth from the threat of sanctions as Switzerland stated that it would adhere to the imposed sanctions. High net worth individuals are frantically moving assets, including cryptocurrencies, with requests exceeding $2 billion each.
Russia has been hit with a slew of sanctions, ranging from the ban of the country from the SWIFT network, to the countries’ refusal to purchase Russian oil in retaliation to the country’s invasion of Ukraine. Experts believe that this will cause the Russian economy to shrink by more than 5%.
Flipsider:
- Elliptic, a blockchain analytics firm, has identified a wallet with notable crypto asset holdings that may belong to Russian oligarchs and other sanctioned individuals.
Why You Should Care
The impact of regulations on cryptocurrencies has been evident over the last few weeks as cryptocurrency exchanges comply with the orders of regulators.
Terra Founder’s Bet
CEO of Terra Do Kwon has expressed faith in the valuation of his project by entering into a bet with cryptocurrency trader ‘Sensei Algod‘. Kwon wagered $1 million that the value of Terra (LUNA) will be higher than $88 in exactly one year.
The funds were deposited into an escrow wallet belonging to UpOnly podcast host Jordan Fish. Surprisingly, Kwon also accepted a $10 million with ‘Giant Rebirth‘ under the same terms, but, as of press time, Giant Rebirth was yet to send his funds to the escrow wallet.
The buzz arose after claims were made that Terra is a “Ponzi scheme” because of the usage of LUNA in stabilizing UST. Critics believe that LUNA is at risk of entering a death spiral because of the burning of the asset to maintain the peg of UST to the U.S. dollar.
Flipsider:
- Despite the claims that Terra is a Ponzi scheme, the asset has soared to become the most staked crypto asset in the world ahead of SOL and ETH.
Why You Should Care
Terra is one of the fastest rising blockchains in the world, and is widely thought of as an “Ethereum killer.” Terra is the 7th largest in terms of market cap ahead of Solana, Cardano, and Polkadot.
