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Falling Bitcoin price doesn’t affect El Salvador: ‘Now it’s time to buy more,’ reveals Deputy Dania Gonzalez

In an exclusive interview with Cointelegraph, a policymaker from El Salvador reveals how BTC has been helping the country change people's lives.

Dania Gonzalez, Deputy of the Republic of El Salvador, was recently in Brazil to reveal her country's experiences with the decision to adopt Bitcoin (BTC) as legal tender. Gonzalez’s invitation to Brazil came from digital influencer Rodrix Digital, who was recently in El Salvador to produce a documentary about cryptocurrencies.

Among the lawmaker’s activities in Brazil was attending Bitconf 2022, as well as meeting with Dape Capital CEO Daniele Abdo Philippi and Ana Élle, CEO of Agency ROE.

Between her agendas, Gonzalez spoke with Cointelegraph and revealed how Bitcoin has helped to change people's lives in El Salvador and how the federal government, led by President Nayib Bukele, has been taking advantage of the resources invested in BTC to improve the economy.

Asked about El Salvador’s investment in Bitcoin and how it can impact people's lives as the value of BTC is falling, Gonzalez highlighted that every investment has a cost and a benefit.

"What Nayib Bukele did was buy Bitcoins and make a profit at a certain strategic moment,” she said. “In cryptocurrencies, there are times when you can make a profit and there are times when you have to invest more. Now cryptocurrency is down, this happens, it's normal, but at this point instead of being sad, instead of thinking that you lost all your investment, it's time to buy more Bitcoins because now the price is cheap, that's the strategy.”

According to Gonzalez, El Salvador is already benefiting from investments made in Bitcoin; she cited two ventures — a veterinary hospital and a public school — that were made possible thanks to cryptocurrency. She explained:

"Bukele built a veterinary hospital to benefit the population where services, any service for your pet, costs US$0.25. Even an operation costs this amount and that is accessible to the entire population. Bitcoin has been converted into a benefit for the people. Now with the reserve we have in Bitcoin, we must build 20 more schools. Before Bitcoin, to do this we had to approve projects, include it in the nation's general budget and use people's money to construction. Now these works are done thanks to all the profits made with Bitcoin.”

Gonzalez indicated that Bukele’s strategy has already proven to be successful in terms of socioeconomic impact.

"This is the main reason why the president also buys Bitcoins,” she said. “He does this to be able to generate profits for social projects for the people [...] This is not just words, it is something tangible for the population because they can see part of the public services being realized thanks to Bitcoin profits.”

CBDC

Cointelegraph also spoke with the lawmaker about central bank digital currencies, also known as CBDCs, and how their issuance by nations can impact the cryptocurrency market.

Gonzalez stated that she does not see a clash between cryptocurrencies and CBDCs, believing that both should coexist together in the digital ecosystem that will guide nations in the future. Furthermore, she stated that the proposed issuance of CBDCs by countries shows that they have understood the power of the crypto economy.

Related: CBDC activity heats up, but few projects move beyond pilot stage

The deputy also highlighted that El Salvador is working to expand the effects of the Bitcoin Law and will build an ecosystem based on cryptocurrencies, with the elimination of taxes for sectors linked to the crypto economy.

In addition, she highlighted that other laws will be reformulated to meet the new demands of the digital economy and to reduce bureaucracy in public administration procedures. She explained:

“We want it to be possible to open a business in 5 minutes here in El Salvador [...] We already have a national digital wallet system for cryptocurrencies and we intend to make a law so that investors from all over the world can have immediate citizenship in El Salvador if they invest in the world of Bitcoin in our country.”

Bitcoin changes people's lives

Gonzalez also revealed to Cointelegraph that the adoption of Bitcoin as legal tender attracted investors and companies from all over the world and strengthened merchants' and local communities' independence from bank monopolies.

"It opened up an opportunity for independent merchants to have a new payment gateway, because the payment channels could be cash or could be credit or debit cards,” she said. “But if you go to a bank and want to apply for the [point of sales] to accept credit payments or debit, you pay a membership fee, you pay a commission that can be up to 9% for each purchase.”

Bitcoin, on the other hand, “is fully decentralized financing, there is no commission if you use the national wallet,” she explained.

Another direct benefit cited by the deputy is related to financial remittances made by Salvadorans who live in other countries such as the United States. According to Gonzalez, there are 7 million Salvadorans living inside El Salvador and approximately 3 million outside its borders, mainly in the United States.

Thanks to Bitcoin, remittances from the United States can be made without fees, she said. Gonzalez also claimed that Western Union lost roughly $400 million in remittance business last year because of El Salvador's Bitcoin Law. 

Bitcoin Beach and Surf City

Gonzalez revealed details about her country’s Bitcoin Beach and Surf City projects, both carried out in the El Zonte region. In them, Bitcoin is used as a form of social transformation that promotes crypto payments and economic development through digital assets.

She explained that Bitcoin Beach existed before the BTC law was passed. On Bitcoin Beach, “you can buy a soda or a “Pupusa,” a typical El Salvador food, on the street or go to a prestigious restaurant and you can pay with Bitcoins."

Related: El Salvador’s Bitcoin play: What does the current slump mean for adoption?

The deputy also revealed that a project called Surf City is underway in El Zonte, which seeks to train the local community to take advantage of tourism related to surfing, as the beach has some of the best waves for the sport.

"These communities have now benefited from job opportunities in businesses or work in hotels and restaurants that now have more potential than before, now more tourists come to El Salvador because they [...] can pay for everything they want with Bitcoins,” she said. “I know companies that came from Singapore a few months ago and now have about 50 Salvadorans working on their operations. This shows how Bitcoin has been changing people's lives in El Salvador.”

In addition, the deputy highlighted how Bitcoin has been favoring the unbanked who now, through cryptocurrency, can access financial services without the bureaucracy of traditional systems:

"Traditional banks excluded 70% of the country's population from their services for different reasons. In addition, of the 30% of the population that has access to financial services, only 23% were in banks, while 7% did so through cooperatives with very high rates. Now Bitcoin and cryptocurrencies are favoring this excluded population that now has power and opportunity.”

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

One River’s spot Bitcoin ETF application rejected by SEC

The proposed environmentally conscious spot ETF was found to be insufficiently protected against fraud and manipulation, like many ETF proposals before it.

The United States Securities and Exchange Commission (SEC) maintained its perfect record for rejecting Bitcoin (BTC) spot exchange-traded fund (ETF) applications Friday when it disapproved a rule change to allow cryptocurrency-focused hedge fund One River Digital to offer the One River Carbon Neutral Bitcoin Trust on the New York Stock Exchange Arca. The decision comes somewhat ahead of schedule, as the agency had extended the original deadline to June 2 to allow more time for consideration.

The commission wrote that, when considering One River's proposed rule change, it applied "the same standard used in its orders considering previous proposals to list bitcoin-based commodity trusts." Specifically, the proposed rule change did not meet the SEC's rules around fraud prevention. The SEC further clarified:

“[...] disapproval of this proposed rule change does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.”

One River Digital was established in 2020 by Eric Peters, founder of One River Asset Management, and is reportedly backed by billionaire Alan Howard, co-founder of Brevan Howard Asset Management.

Related: Cathie Wood’s Ark and 21Shares refile for spot Bitcoin ETF

Among the financial organizations that have tried and failed to receive the SEC’s blessings on digital asset-based ETFs this year are Fidelity Investments, New York Digital Investment Group (NYDIG) and Global X, as well as Skybridge Capital.

Grayscale has been more militant in its efforts to receive approval for a spot-traded Bitcoin ETF. The digital asset manager has gone so far as to threaten to file suit against the SEC if its application is denied, and has recently launched a campaign to drum up public support for its application.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

Crypto Biz: Smart Money is betting big on Web3, layer 2, May 19-25

Despite the apparent bear market in digital assets, venture capital continues to allocate billions to crypto and blockchain startups.

Billions and billions. That’s what venture capitalists are spending to get ahead of the curve in crypto. Their latest fixation is Ethereum layer-2 scaling solutions and Web3, an umbrella term that describes the next stage of the internet’s evolution. So, while the cryptocurrency market is in a state of extreme fear, smart money investors — TradFi folks who invest with expert knowledge — continue to pour countless sums into the space. 

This week’s Crypto Biz newsletter gives you the latest funding stories from the world of blockchain and explores interesting developments surrounding Google and Sam Bankman-Fried.

Andreessen Horowitz closes $4.5 billion crypto fund amid market turmoil

The crypto market selloff of 2022 hasn’t deterred Andreessen Horowitz from pledging additional billions to crypto startups. This week, the venture capital giant, which also goes by the name a16z, announced the closing of its fourth cryptocurrency investment fund. Valued at $4.5 billion, a16z’s new fund is focused heavily on Web3 startups. Clearly, Andreessen is getting the money from interested parties who believe blockchain technology will transform the internet. So, you can keep reading doom-and-gloom headlines about the end of crypto as we know it. Or you can simply follow what the smart money is doing.

StarkWare nets $100M as investors bank on layer-2 success

Speaking of smart money, venture capital investors have given $100 million to Ethereum layer-2 developer StarkWare. Many crypto observers are excited about Ethereum’s chronically delayed Merge, but investors seem to think the network won’t be able to scale without a lot of support from layer-2 solutions. StarkWare is pushing for rollup technology that could significantly increase Ethereum’s transaction capabilities, which will greatly enhance the network’s functionality. Interest in layer-2s is just heating up and investors will look to back as many front-runners as they can.

Google seeks fresh talent to lead global Web3 team

Bear markets are tough, but don’t let them deter you from considering a career in crypto. Even Google, the data overlords of the internet, is hiring talent for its Web3 ambitions. Basically, the company is forming a Web3 team within its Google Cloud division and believes now is the time to increase support for “crypto-related technologies.” Those were the exact words — allegedly, of course — of Google Cloud vice president Amit Zavery. Web3 is no longer just about crypto, but its connection to the industry appears to be growing stronger by the day.

Sam Bankman-Fried could spend up to $1B in 2024 to thwart Trump comeback

Just because Bitcoin is trading sideways, it doesn’t mean the crypto market is boring. Far from it, actually. How about this story: FTX founder Sam Bankman-Fried, also known as SBF, is prepared to spend up to $1 billion of his own money to thwart a Donald Trump comeback. I guess this means SBF will donate up to $1 billion to the Democratic Party during the 2024 election cycle. Although Trump hasn’t confirmed whether he will run again in 2024, the chances are high that he’ll take another kick of the can. If he does run, I don’t think anyone in the GOP can compete with him. SBF is taking this very seriously.

Before you go! When will stocks recover?

I’d love to tell you that Bitcoin is a premier inflation hedge that has completely decoupled from stocks and other so-called risk assets. Unfortunately, though, since the March 2020 Covid crash, Bitcoin and crypto have been highly correlated with stocks. If you want to gauge the likelihood of a crypto recovery in the short term, you need to look at what stocks are doing. In the latest edition of The Market Report, I sat down with fellow analysts Benton Yuan, Jordan Finneseth and Marcel Pechman to discuss the likelihood of a stock market recovery and what it means for Bitcoin. You can watch the full replay below.

Crypto Biz is your weekly pulse of the business behind blockchain and crypto delivered directly to your inbox every Thursday.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

WEMIX gains 200%+ after stablecoin and boosted staking rewards announcement

New partnerships, a mainnet upgrade and plans to launch a stablecoin appear to have triggered a 200% rally in WEMIX price.

Blockchain-based gaming, also known as GameFi, is an up-and-coming sector that could potentially be one of the primary catalysts for kickstarting the mass adoption of blockchain technology.

WEMIX, a gaming protocol that operates on the Klaytn network, aims to get in on the GameFi revolution and this week, the project's native token (WEMIX) rallied even as the wider market continued to sell-off.

Data from Cointelegraph Markets Pro and TradingView shows that since hitting a low of $1.27 on May 12, WEMIX price climbed 269% to hit a daily high at $4.70 on May 25 as its 24-hour trading volume increased to $652 million.

WEMIX/USDT 1-day chart. Source: TradingView

Three reasons for the price reversal for WEMIX are the upcoming launch of WEMIX 3.0, a series of project launches and partnership agreements, and the introduction of lockup staking for token holders.

WEMIX 3.0

The main development attracting attention to WEMIX is the protocol's planned mainnet launch, which is scheduled to take place on June 15.

WEMIX 3.0 will be an Ethereum virtual machine (EVM) compatible public chain that will utilize a stake-based proof-of-authority (SPoA) consensus algorithm.

As part of the mainnet launch, WEMIX will also be introducing the WEMIX Dollar (WEMIX) as the native stablecoin of the ecosystem.

WEMIX will be a 100% collateralized stablecoin, backed by USD Coin (USDC) and off-chain assets like fiat currencies.

New partnerships boost excitement

May has been a busy month for the WEMIX protocol after multiple games launched or announced their upcoming launch dates on the network. New additions include Crypto Ball Z, Four Gods and Every Farm, as well as the onboarding of the SpoLive sports prediction game.

Along with protocol launches, WEMIX announced several strategic investments including being the lead investor in the Old Fashion Research (OFR) crypto fund as well as an investment in an U.S.-based augmented reality metaverse startup called Jadu.

On May 17, the team behind WEMIX also signed a memorandum of understanding with the Vietnam Blockchain Association.

Related: Former Binance executives launch $100 million venture fund

Increased staking rewards

WEMIX also launched Stake360, an incentive that offers WEMIX holders boosted staking rewards for committing to an extended lockup period.

In addition to the standard 7% staking reward available to all token holders, investors who agree to a 90 to 360 day lockup can earn from 9% to 20.28%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

Hodler’s guide to travel: Which platforms accept cryptocurrency?

Is it possible to vacation using cryptocurrency? The digital era has revolutionized the way we bank, shop and socialize. Why not use crypto to book your next holiday?

The global economy is becoming increasingly digital, and it's no surprise that cryptocurrencies and blockchain technology are starting to have an impact on the travel industry. Many travel agencies now accept Bitcoin (BTC) and other digital currencies as payment, with some even providing discounts to customers who pay in cryptocurrency. Here is a list of popular travel booking platforms that take BTC, as well as embrace blockchain technology.

1INCH Network to bring crypto payments to the travel industry

The decentralized exchange aggregator 1inch Network on Thursday announced a partnership with the travel booking platform Travala.com, which will allow users to pay for their hotel bookings with cryptocurrency. Users of Travala.com can now use their favorite cryptocurrency to purchase millions of goods thanks to this collaboration. This decision is expected to boost crypto adoption and foster innovation in the travel industry.

The integration with Travala.com will allow 1INCH token holders to book over 2.2 million hotels and residences, 600+ airlines, and 400K+ activities in 230 countries. This is a huge step forward for the 1INCH Network, which will now be able to offer its services to a wider range of users.

Travala.com is a supporter of cryptocurrency adoption, taking payment in over 50 different cryptocurrencies, including BTC, Ether (ETH), Tether (USDT), Shiba Inu (SHIB), and now 1inch.

TravelX raises $10 million to build a blockchain-based travel distribution protocol

TravelX, a new firm, recently received $10 million in seed financing to create a blockchain-based distribution network for travel. Juan Pablo Lafosse, the former CEO and creator of Almundo, launched the Miami-based business last year.He believes that blockchain technology will provide businesses with additional distribution alternatives as well as help them to deal with stock more effectively in a variety of situations.

Alternative Airlines partners accept cryptocurrency payments

As reported by Cointelegraph, Alternative Airlines, a travel company based in the United Kingdom, partnered with cryptocurrency service Utrust to facilitate payments with crypto.

Alternative Airlines became the first merchant in the travel business to partner with Utrust on Nov. 13, when it announced a new relationship with the Swiss-based digital payments processor. Customers can book flights using cryptocurrencies like BTC, ETH, Dash (DASH), DigiByte (DGB), and Utrust's native currency, UTK.

Destinia

On its web and mobile applications, Destinia, a well-known hotel and flight booking service founded in 2001 by Ian Webber and Amuda Goueli, provides discounts to BTC users.

Related: Bitcoin runs the world: Traveling to 40 countries in 400 days with BTC

The company, based in Spain, has been an early adopter of cryptocurrency payments. In 2014, Destinia.com became the first online travel agency in the Middle East to accept BTC payments. With Bitcoin integration, the business swiftly became one of the most popular payment options offered by the firm, with transaction volumes mirroring that of PayPal.

Bonus: The Bitcoin Beach

On the outskirts of El Salvador's capital, about an hour from the city is a hamlet called El Zonte. Warm water and a fantastic point break draw surfers from all around the globe, but you may easily identify a different sort of traveler on El Zonte's twisting dirt streets.

The village of El Zonte allows residents and visitors to use BTC to pay for anything, from utilities to tacos, thanks to a local business's innovation. The Bitcoin Beach initiative, according to Cointelegraph's Joe Hall, preceded the adoption of BTC as legal tender in El Salvador, first announced by President Nayib Buekele during the Bitcoin 2021 conference and later enacted in September 2021.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

Price analysis 5/27: BTC, ETH, BNB, XRP, ADA, SOL, DOGE, DOT, AVAX, SHIB

Bitcoin and most major altcoins have not tracked the recovery seen in stocks, a possible indicator that further downside is possible.

Equities markets in the United States rallied sharply on May 25 and 26 but Bitcoin (BTC) and altcoins have not followed a similar trajectory. This suggests that traders are not confident that the crypto markets have bottomed out yet. 

On-chain analytics firm Glassnode said that the number of Bitcoin whales has been reducing and on May 27, the metric fell to the lowest level since July 2020.

On May 24, Miller Value Partners founder and chief investment officer Bill Miller backed Bitcoin investing and called it an “insurance policy against financial catastrophe.”

Daily cryptocurrency market performance. Source: Coin360

In a note to its clients on May 25, JPMorgan said that Bitcoin’s fall looks like capitulation and they anticipate Bitcoin and the crypto markets to rally. The bank’s analysts believe Bitcoin’s fair value is $38,000, which is about 30% higher than the current level.

Could Bitcoin follow the U.S. equities markets higher or will it decouple and continue to languish at lower levels? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin plunged below the strong support of $28,630 on May 26 but the bulls could not sustain the lower levels. The long tail on the day’s candlestick shows that the bulls aggressively purchased the dip.

BTC/USDT daily chart. Source: TradingView

The bulls are again trying to defend the support at $28,630, which is an important level to keep an eye on. If the price rises from the current level and breaks above the 20-day exponential moving average (EMA) ($30,868), it will suggest that the BTC/USDT pair may have bottomed out. The pair could then rally to the 50-day simple moving average (SMA) ($35,721).

Conversely, if the price turns down from the current level or the overhead resistance, it will suggest a lack of demand at higher levels. That may increase the possibility of a break below $28,630. If that happens, the pair could retest the crucial level at $26,700. A break and close below this level could intensify selling and the pair may plummet toward $20,000.

ETH/USDT

Ether (ETH) dipped and closed below the uptrend line on May 25, suggesting that bears were attempting to re-establish their supremacy. The selling picked up momentum on May 26 and the price plunged below the May 12 intraday low at $1,800.

ETH/USDT daily chart. Source: TradingView

The bears are trying to defend the crucial support at $1,700 but the rebound lacks momentum. This suggests that bulls are not aggressively buying at the support. That could embolden the bears who may attempt to sink and sustain the price below $1,700. If they succeed, the ETH/USDT pair could plummet to $1,300.

Conversely, if bulls successfully defend the support at $1,700, the pair could start an up-move toward $2,159. That could keep the pair range-bound between $2,159 and $1,700 for some more days.

BNB/USDT

The long wick on BNB's May 25 candlestick shows that bears are selling on rallies nearing the critical overhead resistance at $350. The selling continued on May 26 and the price broke below the 20-day EMA ($320).

BNB/USDT daily chart. Source: TradingView

There is a minor support at $286 where the bulls will attempt to arrest the decline. If they succeed, it will suggest that the sentiment has changed from selling on rallies to buying on dips. The bulls will then again strive to push the price to $350.

Alternatively, if the price breaks below $286, it will suggest that the aggressive bulls, who may have been trapped after buying the break above $320, may be exiting their positions. That could sink the BNB/USDT pair to $260.

XRP/USDT

Ripple (XRP) broke below the immediate support at $0.38 on May 26 but the long tail on the day’s candlestick suggests strong buying at lower levels. The buyers will try to push the price toward the downtrend line.

XRP/USDT daily chart. Source: TradingView

If the price turns down from the downtrend line, the bears will again attempt to sink the XRP/USDT pair below $0.38. If that happens, the pair could drop to the May 12 intraday low at $0.33 where the bulls are likely to mount a strong defense. The bears will have to pull the price below this support to indicate the resumption of the downtrend.

On the other hand, if bulls push the price above the downtrend line, the pair could rally to the 20-day EMA ($0.44). This level may again act as a stiff resistance but if bulls overcome this barrier the recovery could reach the psychological level at $0.50.

ADA/USDT

Cardano’s (ADA) tight-range trading between $0.49 and $0.56 resolved to the downside on May 26. The bulls are attempting to defend the minor support at $0.46 but if they fail, the drop could extend to $0.40.

ADA/USDT daily chart. Source: TradingView

The downsloping moving averages and the RSI near the oversold territory suggest that bears are in command. If bears sink and sustain the price below $0.40, the selling could pick up momentum and the ADA/USDT pair may plummet to $0.33.

Conversely, if the price rebounds from the current level or the support, it will suggest strong buying at lower levels. The bulls will then try to drive the price above the 20-day EMA ($0.56). If they succeed, the pair could rally to $0.61 and later to $0.74.

SOL/USDT

Solana (SOL) broke below the immediate support at $47 on May 26 suggesting that traders who may have bought at lower levels are closing their positions. This opens the doors for a possible drop to the crucial support at $37.37.

SOL/USDT daily chart. Source: TradingView

If the price rebounds off $37.37, the buyers will attempt to push the price to the 20-day EMA ($55). This is an important level for the bears to defend because a break and close above it will suggest that the SOL/USDT pair may have bottomed out. The pair could then attempt a rally to the overhead resistance at $75.

Alternatively, if bears sink the price below $37.37, it will suggest the resumption of the downtrend. The pair could then extend its decline to the next support at $32.

DOGE/USDT

Dogecoin’s (DOGE) tight-range trading resolved to the downside on May 26 and bears pulled the price below $0.08. This suggests that supply exceeds demand.

DOGE/USDT daily chart. Source: TradingView

If bears sustain the price below $0.08, the DOGE/USDT pair could drop to the vital support at $0.06. As this level had acted as a strong support on May 12, the bulls may again try to defend it. If the level holds, the pair could climb toward the 20-day EMA ($0.09).

Another possibility is that if bulls push the price back above $0.08, it will suggest demand at lower levels. The buyers will then try to propel the price toward the 20-day EMA. A break and close above this resistance will suggest that the bears may be losing their grip. The pair could then rally to the psychological level at $0.10.

Related: 3 reasons why Bitcoin is regaining its crypto market dominance

DOT/USDT

Polkadot’s (DOT) failure to climb and sustain above the breakdown level at $10.37 attracted selling by traders. The bears pulled the price below the immediate support of $9.22 on May 26 but are struggling to sustain the lower levels.

DOT/USDT daily chart. Source: TradingView

The price rebounded off the immediate support at $8.56 and the bulls are attempting to clear the overhead hurdle at the 20-day EMA ($10.88). If they manage to do that, it will suggest that the downtrend may be weakening.

Contrary to this assumption, if the price once again turns down from the overhead resistance, the bears will try to pull the DOT/USDT pair below $8.56. If they do that, the next stop could be $7.30.

The bulls are likely to defend this level aggressively but if they fail in their endeavor, the pair could start the next leg of the downtrend.

AVAX/USDT

Avalanche (AVAX) continued lower and plunged below the important support of $23.51 on May 26. This indicates the resumption of the downtrend.

AVAX/USDT daily chart. Source: TradingView

Although the downsloping moving averages favor the bears, the RSI in the oversold territory suggests a relief rally or consolidation in the near term. If the price turns up and rises above $23.51, it may trap several aggressive bears, resulting in a short squeeze. That could push the AVAX/USDT pair to the 20-day EMA ($34).

Alternatively, if bears sustain the price below $23.51, the selling could pick up momentum and the pair may decline to the psychological support at $20.

SHIB/USDT

Shiba Inu (SHIB) continues to be under pressure. Although bulls are defending the support at $0.000010, the rebound lacks strength. This suggests weak demand at current levels.

SHIB/USDT daily chart. Source: TradingView

The bears will attempt to pull the price below $0.000010 and if they succeed, the SHIB/USDT pair could decline to the critical support at $0.000009. This is an important level to keep an eye on because a break and close below it could indicate the resumption of the downtrend. The pair could then decline toward $0.000007.

Alternatively, if the $0.000010 level holds, the pair could rise to the 20-day EMA ($0.000013). This level may again act as a resistance but if crossed, the upward move could reach $0.000017.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

How Terra’s collapse will impact future stablecoin regulations

The collapse of algorithmic stablecoin UST created a ripple effect not just in the crypto market but among world regulators as well.

The collapse of the Terra ecosystem, which subsequently depegged its algorithmic stablecoin TerraUSD (UST) value and crashed it to an all-time low of $0.30, has cast doubt over the future of not just algorithmic stablecoins but all stablecoins in general.

UST’s success and stability were intertwined with its sibling, LUNA, which creates arbitrage opportunities that, in theory, should keep UST’s price steady. If UST’s price drops below $1, it can be burned in exchange for LUNA, which lowers the supply of UST and raises its price.

Conversely, if UST’s price goes above a dollar, LUNA can be burned in exchange for UST, which increases the supply of UST and decreases its price. As long as conditions are normal and everything functions correctly, this creates both a mechanism and incentive for keeping the price of UST at $1.

Though algorithmic stablecoins are not usually backed by assets such as other stablecoins, the organization responsible for developing UST and the broader Terra ecosystem, the Luna Foundation Guard (LFG), has nevertheless built a war chest of Bitcoin (BTC) to be used in the event that the UST becomes depegged from the United States dollar.

The idea is that if UST’s price ever drops significantly, the BTC can be loaned out to traders who’ll use it to buy UST and push the price back up, repegging it to the dollar. So, when UST went into a deep dive, LFG deployed more than $1.3 billion dollars worth of BTC (42,000 coins at a price of $31,000 each) to traders who were going to use it to purchase UST, creating demand pressure and bolstering its price. However, that couldn’t save the collapsing ecosystem either, and the spiral effect eventually collapsed the price of the LUNA token as well as its stablecoin.

In the aftermath of the collapse, even centralized stablecoins, such as Tether’s USDT, lost their dollar peg, falling to a low of $0.95. Since stablecoins act as a bridge for various decentralized finance ecosystems, the Terra crash led to high volatility in the decentralized finance market.

Justin Rice, vice president of ecosystem at the Stellar Development Foundation, was pretty skeptical of the future of algorithmic stablecoins in light of the UST collapse. He told Cointelegraph:

“What we’re seeing now, and not for the first time, is an optimistic balancing mechanism unraveling due to natural human responses to market conditions. It is challenging to have algorithmic stablecoins keep their peg when things go sideways, and you have to rely on outside intervention to set things right.”

He also advocated for full transparency from stablecoin issuers with third-party audits. Denelle Dixon, CEO and executive director at the Stellar Development Foundation, hoped the recent debacle would push the conversation about stablecoin regulations among lawmakers. She told Cointelegraph:

“We’ve seen significant progress moving the conversation of stablecoin legislation in the United States. We’ve seen bills from both sides of the aisle that understand the issues and can move this industry forward by providing clarity and guardrails. We also know that this is a global issue and think the same rules should apply with respect to stablecoins and are working to help create that consistency.”

Stablecoin regulations around the globe

For a long time, stablecoins have been on the radar of regulators in many major economies, but the UST collapse acted as a catalyst, forcing U.S., South Korean and many European regulators to take note of the vulnerabilities in these not-so-stable digital dollar pegs. 

U.S. regulators are using the incident as grounds to push for more stringent rules around stablecoins and their issuers, with Treasury Secretary Janet Yellen announcing plans for legislation by the end of the year.

Yellen said it would be “highly appropriate” to aim for a “consistent federal framework” on stablecoins by the end of 2022, given the growth of the market. She called for bipartisanship among members of Congress to enact legislation for such a framework.

These could easily be imposed on collateralized stablecoins, such as USD Coin (USDC) and USDT, which are backed by a traditional-style treasury and held by a centralized entity.

Max Kordek, co-founder of blockchain developer platform Lisk, believes the UST collapse will be used by lawmakers to push for central bank digital currencies (CBDC). He told Cointelegraph:

“Trust in algorithmic stablecoins is likely to have greatly diminished because of this incident, and it will be a while before that trust is restored. This will, unfortunately, be used by politicians as an example of why the world requires CBDCs. We don’t need CBDCs; what we do urgently need, though, is reliable, decentralized stablecoins.”

The Congressional Research Service, a legislative agency that supports the U.S. Congress, published a report on algorithmic stablecoins analyzing the UST crash. The research report described the LUNA crash as a “run-like” scenario that lead to several investors pulling out money from the ecosystem at the same time. 

The research paper noted that these conditions in the traditional financial sector are protected by regulations that guard against such scenarios, but without any regulations in place, it might lead to market instability in the crypto ecosystem.

Jonathan Azeroual, vice president of blockchain asset strategy INX, told Cointelegraph:

“Algorithmic stablecoins backed by super volatile assets are especially at risk of a ‘run’ on the funds backing them if investors lose confidence in the mechanism created to ensure its stable value or simply if the value of the assets backing them falls below the amount of stablecoin issued.”

He believes the U.S. government will certainly attempt to expedite their power over regulating stablecoins, as it shows they are not a viable answer to a regulated digital economy. The regulators might require “stablecoins to be issued by federally regulated banks or by regulating them as securities, which will make them be overseen by the SEC [Securities and Exchange Commission].”

David Puth, CEO of the Coinbase-founded Centre Consortium, hoped for constructive regulations in the wake of the UST collapse. He told Cointelegraph:

“The fact remains that stablecoins are a critical piece of the growing crypto ecosystem, and industry organizations in the United States have been vocal about their desire for clear and constructive regulation.”

Puth is hoping for a “thoughtful and pro-innovation regulation that will keep the United States at the forefront of the blockchain economy.”

Apart from the U.S., South Korea is another nation that has gotten serious about stablecoins after the Terra collapse. The founder of Terra, Do Kwon, has been summoned before the country’s legislature for a hearing. A Korean regulatory watchdog has also started risk assessment of various crypto projects operating in the country.

The key lessons 

While regulatory discussions around the stablecoins have gained pace in the light of the UST debacle, it has also highlighted that the crypto market has evolved enough to absorb a $40-billion run-down. This proved that the crypto market has grown enough to absorb a setback as big as Terra without posing a threat to broader market stability.

It’s essential to notice that the collapse of Terra, together with the overall market correction, has led to a cascade of second-order effects, such as increased exchange outflows, a significant spike in liquidations (most obviously in derivatives and decentralized finance), at least a temporary slowdown in DeFi (total-value locked and activity have decreased), and liquid staking issues.

Thomas Brand, head of institutions at Coinmotion — a Finnish virtual asset service provider — told Cointelegraph:

“Regulators, I assume, are especially interested in how crypto, and now especially stablecoin, risks might affect TradFi and CeFi via contagion and (in)direct exposure. Thus far, these risks have not materialized systemically. Still, regulators might pay closer attention to these matters soon — mainly if they conclude that at least some stablecoins remind a form of shadow banking.”

Terra wasn’t at this point a systemic risk but rather, its meltdown was limited, although effects could be seen throughout various interlinked ecosystems. 

Derek Lim, head of crypto insights at Bybit exchange, told Cointelegraph that while the UST collapse has definitely attracted regulator scrutiny, the crypto market managed to recover without seeing colossal damage across the board. He explained:

“I would like to point out that one of the key concerns that U.S. regulators have made clear in several reports is that a stablecoin bank run could destabilize the broader financial system. This incident has shown that a bank run on the third-largest stablecoin by market cap has barely affected the wider crypto markets, let alone the S&P and beyond.”

Terra’s spiral disaster not only highlights the need for transparency from stablecoin issuers but the importance of a regulated market as well. With clear regulations in place, there would have been several gatekeepers to prevent small investors from losing their money. The event has already prompted regulators around the world to take notice. 

The Terra collapse could prove to be a turning point for stablecoin regulations around the globe, quite similar to what Libra’s global stablecoin plans did for CBDCs — i.e., prompting regulators to accelerate their own plans.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

Amid sanctions, Russia weighs crypto for international payments: Report

Moscow has adopted a positive stance toward digital assets after its invasion of Ukraine triggered a sharp response from Western nations in the form of sanctions.

The Russian Federation is reportedly considering accepting cryptocurrencies for international payments in response to Western sanctions against the country that were prompted by its full-scale invasion of Ukraine earlier this year. 

The Moscow-based Interfax news agency and Reuters reported Friday that Ivan Chebeskov, who heads the financial policy division within Russia’s finance ministry, is actively considering the possibility of incorporating crypto payments. “The idea of using digital currencies in transactions for international settlements is being actively discussed,” he said.

According to local newspaper Vedomosti, the finance ministry is considering adding the proposal on international payments to an updated version of a crypto law that’s still under construction.

Support for cryptocurrency legalization appears to be coming from all segments of the Russian government. According to trade minister Denis Manturov, Moscow plans to legalize crypto payments “sooner rather than later.” In April, the country’s finance ministry supported legalization in a bill titled “On Digital Currency.”

Related: Russia's updated crypto mining bill cuts tax amnesty for Bitcoin miners

The same month, the governor of the Bank of Russia admitted that the central bank was reconsidering its hostile stance toward digital assets. Central bank governor Elvira Nabiullina said that crypto is being considered among several measures to mitigate the impact of Western sanctions against the Russian economy.

It’s not entirely clear how Russia would be able to use digital assets to bypass Western sanctions given that the crypto market is not large enough or liquid enough to support a sovereign nation’s transaction needs. For starters, the United States Office of Foreign Assets Control has barred any U.S. person from doing business with individuals or entities on its Specially Designated Nationals and Blocked Persons (SDN) List.

The ban on doing business with Russian SDNs exists regardless of the payment systems in place. Jake Chervinsky, head of policy for the U.S.-based Blockchain Association, explained:

“There's zero reason to think crypto's existence will convince any of them to willfully violate sanctions laws, risking fines & jail time.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

Bitcoin price approaches key support levels to avoid ‘cascade south’

Volatility is primed to return after upside above $29,000 fails to become an enduring trend.

Bitcoin (BTC) clung to $29,000 at the May 27 Wall Street open as crucial support levels lay just hundreds of dollars from spot price.

BTC/USD 1-day candle chart (Bitstamp). Source: TradingView

Trader demands higher low above $28,000

Data from Cointelegraph Markets Pro and TradingView confirmed volatility once again waning in a frustrating week's price action.

BTC/USD found itself in a tight corridor on the day, and for Cointelegraph contributor Michaël van de Poppe, it would not take much deviation to disrupt the status quo.

"Technically speaking, when it comes to Bitcoin, you clearly want to see a higher low happening here, and if that we happens, we can start seeing continuation," he said in his latest YouTube update.

Levels to hold now were nearby — $28,600 and $28,200 in order to avoid a rematch of the week's $28,000 low and risk giving up the chance of a higher low construction.

"If that is lost, then I'm going to expect ourselves to get towards $26,000 as then we're going to start cascading south even more," he concluded.

Equally wary was commentator Bob Loukas, who eyed the Bollinger Bands volatility indicator on the day to warn of potential incoming upset.

Across social media, the sense that a capitulatory move was coming for crypto prevailed, this having characterized sentiment throughout recent weeks.

In-profit supply favors bears

Meanwhile, looking at the network as a whole fueled concerns that current prices could not endure.

Related: Small Bitcoin whales may be keeping BTC price from 'capitulation' — analysis

Analyzing the percentage of the supply in profit, Kripto Mevsimi, a contributing analyst at on-chain analytics platform CryptoQuant, drew bearish conclusions.

Currently, around 55% of the supply was in profit, he explained, and compared to historical behavior, more price capitulation should enter in order to provide some guarantee of a macro bottom.

First, however, there should be a sideways period for BTC/USD which precedes the final dip. This would make current price performance chime with the 2018 bear market and the March 2020 crash.

"Next; 2-3 months of boring price action. Then last capitulation possible with %30-%50 additional price drop," he summarized.

An accompanying chart compared the three phases beginning with the 2017 high of $20,000.

Bitcoin supply in profit vs. BTC/USD annotated chart. Source: CryptoQuant

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide

3 reasons why Bitcoin is regaining its crypto market dominance

Hint: Many altcoins—not just LUNA—are down over 80% from their all-time highs in 2022.

Bitcoin (BTC) is regaining its lost crypto market dominance even as it trades nearly 60% below its record highs.

Bitcoin dominance at 6-month highs

The Bitcoin Market Dominance (BTC.D) index, a metric that weighs BTC's market capitalization against the rest of the cryptocurrency market, jumped to around 47% on May 27, its highest since October 2021.

Bitcoin Market Dominance daily chart. Source: TradingView

The dominance index swelled despite the drop in Bitcoin's market cap in the last six months from $1.3 trillion in November 2021 to nearly $550 billion in May 2022, suggesting that traders were more comfortable selling altcoins. 

Let's look at three likely reasons why traders have been rotating out of the altcoin market to seek safety in Bitcoin.

Ethereum "Merge" narrative is cooling down

Ethereum's native token Ether (ETH), the largest alternative cryptocurrency by market cap, has witnessed consistent declines in its market dominance in the last five months—from 22.38% in December 2021 to 17.86% in May 2022.

Ethereum Market Dominance daily chart. Source: TradingView

The plunge comes after two years of a sustained uptrend, with ETH/BTC rising more than 200% between September 2019 and December 2021.

As Cointelegraph reported, Ether outperformed Bitcoin in recent years, largely due to the hype surrounding its long-awaited protocol upgrade, called "the Merge," which hopes to make Ethereum more scalable and less expensive.

But the upgrade, which aims to transition Ethereum's blockchain from proof-of-work to proof-of-stake—a counterpart known as Beacon Chain—has faced repeated delays in its launch.

Only recently, Martin Köppelmann, the co-founder of the Ethereum Virtual Machine- (EVM)-compatible Gnosis chain, highlighted a seven-block reorganization on the Beacon Chain, meaning that the chain got briefly "forked" in its testing phase.

Ether dropped by nearly 13.5% against the U.S. dollar following the reveal on May 25 while ETH/BTC plunged to 0.059, the lowest in six months. 

ETH/BTC daily price chart featuring key support level. Source: TradingView

Ethereum lacks narratives to drive ETH's price upward after undergoing the Merge upgrade, noted OxHamZ, an independent market analyst, saying that investors have already "priced in" the network upgrade hype. 

LUNA to zero

Bitcoin's renewed crypto market strength also appears due to the Terra (LUNA) market's collapse.

LUNA/BTC, a financial instrument that traces the Terra token's strength against Bitcoin, fell by 99.99% to 0.00000004 in May, which made it practically worthless.

Meanwhile, LUNA declined similarly against the dollar, raising anticipations that traders dumped the token to seek safety in BTC and cash.

LUNA/BTC daily price chart. Source: TradingView

LUNA's market cap before the May's deadly crash was $40.88 billion.

Related: Crypto funds under management drop to a low not seen since July 2021

Altszn ded 

On the whole, the altcoin market, containing everything from large-cap blockchain projects to sketchy crypto assets, has fallen by nearly 65% six months after topping out near $1.7 trillion.

Altcoin market cap daily chart. Source: TradingView

A deeper look into some tokens shows that — unlike Bitcoin — most are down over 80% from their all-time highs, hinting at an overall investor exit from altcoins and into cash, stablecoins or BTC.

DeFi projects and their downside retracement from record highs. Source: Messari
Some dead crypto projects so far in 2022. Source: Messari

That is primarily because Bitcoin isn't only the oldest blockchain, but stands on its own without any central authority.

Historically, Bitcoin's dominance drops during crypto bull markets as waves of new tokens spring up during the mania phase.

For instance, the duration of the infamous initial coin offering (ICO) pump coincided with BTC.D dropping from nearly 96% in January 2017 to 35% in January 2018.

BTC.D daily price chart. Source: TradingView

Then the March 2020 crash was the beginning of the DeFi and nonfungible token (NFT) hype, boosted further by the Federal Reserve's quantitative easing. 

Therefore, if Bitcoin's market dominance has indeed bottomed out, it could once again align with a macro bottom in Bitcoin price, and possibly the beginning of a new bull market phase in the coming months.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Study Shows the United States Is Home to 41% of the NFT Companies Worldwide