As cryptocurrencies continue to stall in the bear market, Portuguese investors may be holding their breath as parliament rejected crypto tax proposals from members of left-wing parties. The European Central Bank, for its part, maintains its position and continues to view digital assets as a risk to financial stability. In any case, US megabank JP Morgan is not of the same opinion as the ECB because Bitcoin will be its favorite “Alternative Asset”. Finally, we remember that the TFL launched Terra after the community approved the “1623 proposal”.
The bearish sentiment: the prevailing market trend
With the drastic decline of the crypto market in the month of May, there is no longer any doubt that cryptocurrencies have entered a crypto winter. While not as brutal as 2018 when Bitcoin’s price dropped nearly 80% from its 2017 high, it’s still significant when you consider all the euphoria it had around cryptocurrencies. Now the question to ask is: how long will this crypto winter last?
Some experts have had to move their “lower target” for Bitcoin to much lower levels, approaching the $15K-$20K zone. The threat of the worst-case scenario grows when we observe the current pessimism for Bitcoin’s future. Especially since cryptocurrencies are said to be decorrelated with the stock market, which rose sharply after 7 weeks of negative growth.
Read our article for more information: A crypto market still characterized by a “bearish” sentiment
Portugal will not tax cryptocurrencies (for now)
Known as Europe’s Eldorado, the country currently seems determined to maintain its status as a crypto tax haven. Indeed, the Portuguese parliament rejected two proposals from left-wing parties to tax digital assets. Nevertheless, the threat of taxation has not completely disappeared as the Portuguese finance minister has stated that cryptocurrencies will be taxed in the near future. According to the latter, the levy on the capital gain of investors in digital assets could be as much as 28% tax.
Portugal has emerged as a veritable crypto hub in Europe due to its tax facilities. Many investors have migrated to this country in the Iberian Peninsula to take advantage of its advantages. With a future crypto tax law, the country is in danger of losing its attractiveness in the sector. But for now, its status as a tax haven has been well preserved with these rejections of proposed laws.
Read our article for more information: Portugal, still a tax haven for cryptocurrencies
The crypto market: threat to financial stability
In any case, this is the view of the European Central Bank, which acted against cryptocurrencies during its semi-annual review. The ECB fears the effects cryptocurrencies could cause in the markets by raising the possibility of a crisis of the supreme through their debt. The European Monetary Authority points out the perils of the volatility of cryptocurrencies that could have a catastrophic ripple effect on other assets. She remembered that:
“System risk increases with the degree of interconnection between cryptoassets and the traditional financial sector”
ECB officials do not pass up the opportunity to make harsh remarks against the crypto sector. In a recent interview, Christine Lagarde said: “TheCryptocurrencies were worthless” and “backed by nothing because there are no underlying assets to serve as a security anchor. For his part, ECB council member Fabio Paneta compared cryptos to the wild west and according to the latter, they will collapse as subprimes.
Read our article for more information: Crypto Market Poses Risks To Financial Stability, ECB Says
Bitcoin: JP Morgan’s Favorite
In a note to investors, JP Morgan analysts said it prefers Bitcoin over real estate. They reported that a fair Bitcoin price would be $38,000, about 30% of the current price. The bank’s analysts believe that the number 1 asset in the crypto market would have a much higher growth potential than real estate, despite the latter having lost more than 50% of its value.
“Last month’s crypto market correction is more like a capitulation from last January/February, and going forward we will see an advantage for bitcoin and the crypto market in general. †
noted Nikolaos Panigirtzoglou, chief analyst at JP Morgan
In addition, the experts indicated that the rise in mortgage rates will have a negative effect on prices in the market.
Read our article for more information: JP Morgan Prefers Bitcoin Over Real Estate
Terra 2.0 launched but token drops over 80%
Two weeks after the crash, the Terra community approves the proposal “proposal 1623” from Do Kwon in an effort to revive the ecosystem. The original proposal consists of a fork of the blockchain and the launch of a new Luna 2.0 token. The Terra community will finally have voted for the creation of a new token with a Terra 2.0 chain that does not support the UST algorithmic stablecoin.
After an outpouring of support from exchanges and other developers, the Luna 2.0 disappointed as the price reportedly dropped by nearly 80% after launch. It went from almost $20 to $4 in less than 6 hours. At the time of writing the Weekly, however, Luna’s price is up 17.87% to $5.87.
Read our article for more information: Exchanges support the launch of Luna 2.0
Top and Flop: Bitcoin Gold Rising to the Top of the Top 100 Crypto
Cryptocurrencies continue to feel the effects of the bear market even though they are up a few percentage points over the weekend. But in cumulative performance, Bitcoin Gold (BTG), the Bitcoin fork is the one that manages to show the best growth rate in the top 100 cryptocurrencies. The crypto took advantage of a message from the famous author of the book ” rich father poor father », Robert Kiyosaki. Right after Bitcoin Gold, there is TRON that continues to rise thanks to its algorithmic stablecoin.
These are the Tops and Flops of the week
|cryptos||current course||Profit in 7 days|
|Bitcoin Gold (BTG)||$23.33||19.18%|
|cryptos||current course||Loss in 7 days|
|Axie Infinity (AXS)||$18.95||-16.50%|
As the stock market rebounded after rather reassuring data from the Commerce Department, cryptocurrencies moved in the opposite direction, catching up slightly over the weekend. However, several observers started talking about an end to the correlation between the two asset classes. In our article on this topic, we talked about the importance of the “time” variable in seeing Bitcoin’s decorrelation to Wall Street’s stock indices. Next week will then be a “test period” to confirm or deny the beginning of the end of the correlation between BTC and US stock market indices.
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