Crypto: Crypto Week at a Glance: What Moved the Markets

It’s been another rough week for crypto tokens, which have been trading in a narrow band around $20,000 all week, the longest they’ve plunged below that level since the market was rocked by turmoil in July. Investors continue to debate the implications of higher lending rates for riskier assets after the Fed chairman’s aggressive comment. Bitcoin is down about 60% this year and some other tokens have lost even more.

Other cryptocurrencies, including Polkadot and Dogecoin, also fell. However, Ether rose in anticipation of a groundbreaking software upgrade to its blockchain.

Here’s a weekly roundup of all the noteworthy stories from the crypto space:

1. Meta rolls out NFT functionality to Instagram and Facebook

Instagram and Facebook users can now post their NFTs on the platform, according to a recent announcement from Meta.

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This comes after a Meta update in early August that indicated they were expanding the 100 countries in Africa, Asia-Pacific, the Middle East and the Americas that are part of their Instagram NFT project. In addition, the social media giant became a Metaverse supporter and announced on Monday that users can upload collectable digital assets by connecting their NFT wallet to Facebook or Instagram.

2. California State Assembly Passes Crypto Regulation Act Pending Governor Approval

A recently passed law requiring digital asset exchanges and other crypto businesses to apply for a license to operate in the state is expected to be signed by California Governor Gavin Newsom.

The Digital Financial Assets Act, also known as California’s “BitLicense”, is modeled after the BitLicense Act passed in New York in 2015. If Democratic Governor Gavin Newsom signs it, the California law will go into effect in January 2025.

“While the novelty of cryptocurrency is part of what makes investing exciting, it also makes it more risky for consumers because cryptocurrency companies are not well-regulated and don’t have to follow many of the same rules that apply to everyone,” Councilor Timothy Grayson (D- Concord), the bill’s sponsor, said in an earlier statement.

One of the conditions is a restriction on trading stablecoins by California companies until 2028, unless the stablecoin is issued by a bank or licensed by the California Department of Privacy, finance and innovation.

3. Crypto.com accidentally sent an Australian woman Rs 56 crore instead of a refund of Rs 5,400
While processing a $100 AUD (5400 INR) refund, cryptocurrency trading company Crypto.com accidentally transferred $10.5 AUD (56 crore INR) to an Australian woman’s account and, shockingly, the error remained seven months undiscovered.

In February, the company was authorized to freeze Manivel’s Commonwealth bank account after filing a complaint with the Supreme Court of Victoria. However, most of the money had already been transferred to other accounts, which were subsequently frozen.

The money, according to evidence presented in court, was used in February to buy a four-bedroom house in Craigieburn, north Melbourne, for A$1.35 million. After that, ownership of the property was transferred to the name of Manivel’s Malaysian sister, Thilagavathy Gangadory. Gangadory has not responded to communications from Crypto.com’s lawyers, so attempts to serve him with the freezing orders have so far been unsuccessful.

4. Major ETH Traders Ready for Volatility Spike as Ethereum 2.0 Merger Approaches

Some people consider placing directional bets on the price of an asset, hedged or unhedged, to be the most exciting trading technique in the financial markets. The next update to Ethereum, the cryptocurrency’s parent blockchain known as Merge, is doing just that.

The big whales appear to be using the long choke options trading method, which ignores the direction the cryptocurrency is moving and instead tries to capitalize on the level of price volatility.

In anticipation of the upcoming merger on September 15, Ethereum miners have been strengthening their positions since May 2021, which is four years. This shows an extremely strong conviction of Ethereum miners, as they increase their balance through mining despite almost unprecedented revenue in fees.

According to Griffin Ardern, a volatility trader at crypto asset management firm Blofin, “block traders have also begun to speculate on an increase in ether volatility,” pointing to large choke trades crossing the books on a major crypto options exchange Deribit.

5. Indonesia plans to create a “crypto exchange” by 2022

According to a senior official on Wednesday, August 31, the Indonesian government plans to open a “cryptocurrency” exchange by the end of 2022 as part of measures to protect consumers, despite growing interest in digital currencies.

Authorities originally planned to open the Crypto Stock Exchange in 2021. “We will ensure that all necessary requirements, procedures and measures have been taken,” said Indonesia’s Deputy Trade Minister Jerry Sambuaga, noting that the delay cannot be attributed to significant issues.

6. OpenSea experienced a 99% drop in daily volumes.
The hype of bursting the NFT bubble has become a reality. With trading volume on OpenSea, billed as the world’s largest non-fungible token (NFT) market, plummeting 99% in just under four months, what was once a raging market is led by FOMO during the crypto bull. market of 2021, now barely a drip.

Data collected by DappRadar shows that while OpenSea processed a record $2.7 billion in NFT transactions on May 1, the market saw just $9.34 million on Sunday. On Sunday, the company had 24,020 users, almost a third less than in May, when it reached its peak in transactions.

7. Japan to review existing corporate crypto tax to boost startups seeking tax breaks
Japan may re-evaluate its current cryptocurrency corporate tax rates to keep businesses in the country. Japanese diplomat Taira Masaaki confirmed the tax audit on Twitter.

A tax reform proposal for 2023 is being considered by the Financial Services Agency (FSA), and Japan’s Ministry of Economy, Trade and Industry may exempt cryptocurrency companies that create their tokens from paying taxes on unrealized profits.

According to Yomiuri, company assets are taxed based on market value at the end of the tax period, meaning startups issuing their own tokens will have to pay taxes on unrealized gains for any tokens they can cling to. The potential tax cut is intended to motivate entrepreneurs to stay in Japan.

(Shivam Thakral is the CEO of BuyUCoin)

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