Daily Digest - 31st August 2022

Headlines

▌El Salvador’s Bitcoin Bond Will Be Delayed Again

El Salvador’s Volcano Bond will be delayed further until later this year, Bitfinex and Tether CTO Paolo Ardoino told Fortune. Paolo Ardoino said that if the legislation necessary to issue the bond can be passed in September, there will be two to three months to roll out the Volcano Bond, suggesting sales could take place by the end of 2022. In November 2021, El Salvador’s President Nayib Bukele first announced Bitcoin Bonds (also known as Volcano Tokens), a project that raised $1 billion from investors, half of which was used to finance infrastructure projects and the other half to buy Bitcoin. Bitfinex was selected as the only exchange provider. Although the coin was originally scheduled to debut in early 2022, El Salvador’s finance minister delayed it until mid-March and then indefinitely as bitcoin’s price plummeted. Nathalie Marshik, head of emerging markets sovereign research at Stifel Financial Corp said this could be due to a lack of interest from investors, especially U.S. investors who are banned from trading on Bitfinex.

Policies

▌Russian Prime Minister: Cryptocurrencies Are a Safe Alternative to Cross-Border Payments

The adoption of cryptocurrencies as a “safe alternative” for cross-border payments is necessary, Russian Prime Minister Mikhail Mishustin announced on Tuesday at a meeting on the strategy for the development of the domestic financial system. The prime minister added that cryptocurrencies offer a great opportunity to ensure uninterrupted payments for import and export. Mishustin also pointed out the importance of ensuring the independence of technical infrastructure and the cybersecurity of financial institutions, saying, "We need to vigorously develop areas of innovation, including the adoption of digital assets, cryptocurrencies, etc. Taken together, this is a safe choice that can guarantee uninterrupted payment for the supply and export of goods from abroad."

▌European Blockchain Secretary General: EU May Ban Stablecoins Pegged to the U.S. Dollar

The European Union may ban stablecoins pegged to the U.S. dollar in 27 countries if it finalises new legislation on the Market in Crypto-Assets (MiCA), European Blockchain Secretary Robert Kopitsch said recently.

Cryptocurrency

▌Members of the U.S. House of Representatives Question the Alleged Fraud of Digital Asset Exchanges

According to a press release, Democratic Rep. Raja Krishnamoorthi asked five cryptocurrency exchanges, including Binance (Binance) and Coinbase (COIN.O), and four federal agencies to provide information on their actions taken to prevent cryptocurrency-related fraud. In a statement, Krishnamoorthi said the lack of a central authority to flag suspicious transactions, the irreversibility of transactions, and the limited understanding of the underlying technology by many consumers and investors, have made cryptocurrencies’ transactions the preferred choice for scammers in many cases.

▌Research: The Value of the Web3.0 Blockchain Technology Sector Will Exceed $6 Trillion by 2023

According to Market Research Future, the value of the Web3.0 blockchain technology sector will exceed $6 trillion by 2023, and Web3.0 will continue to grow at a CAGR of 44.6% from 2023 to 2030. As Web 3.0 relies heavily on blockchain technology, many mistakenly believe that its fate is inevitably tied to the volatile cryptocurrency market. However, cryptocurrencies are only part of this new sector. Gartner explains that while cryptocurrencies crashed in the first half of 2022, decision-makers should not assume that the value of Web3.0 technology is affected. According to the research and consulting firm, Web3.0 tech will soon reach its adoption tipping point and industries from aircraft maintenance to food safety will tokenize their applications. “Blockchain has been a proven technology that ensured the security of the crypto and NFTs to the next level — now, it is ready to ultimately transform the next generation of web technologies,” said Aarti Dhapte, a senior research analyst at Market Research Future. “Web3 blockchain will completely transform the existing conventional processes of the different sectors.”

▌Coinbase Gets Hold-Equivalent Rating From Barclays on Crypto Regulatory Risk

Noting regulatory risk and retail trading revenue exposure, Barclays analyst Benjamin Budish began covering cryptocurrency exchange Coinbase with an equal-weight rating and $80 price target. In a note to clients, Budish said Coinbase will face challenges despite some positive catalysts such as the Ethereum Merge and industry consolidation. Nevertheless, Budish's $80 price target suggests a nearly 20% upside from today's closing price of $67.03. In addition to the new Coinbase coverage, Barclays gave online brokerage Robinhood an underweight rating and a $10 price target, citing negative impact of inflation and/or a potential economic recession.

▌Whale Spends 10,000 BTC Worth $203M, Bitcoins Stem From the Infamous 2011 Mt Gox Hack

Two addresses created on December 19, 2013, sent 10,000 bitcoins worth $203 million to unknown wallets after sitting idle for close to nine years. Onchain data shows the 10,000 coins moved this week originally came from the Mt Gox breach that occurred on June 19, 2011. Analysis shows the bitcoins spent were originally derived from wallet 1McUC that once held 134,897.01 BTC after getting the coins on June 19, 2011. Onchain analysis further shows that bitcoins, whether it be the 10,000 bitcoins spent this week or the original 134K BTC, likely belonged to a single entity. The 10,001 BTC spent this week seems to be the last of the stash stemming from the original 1McUC address.