Finex Coin Week – Bitcoin briefly fell below $ 40,000 »

Published 17. 1. 2022 at 11:00

We have been following the events in the world of cryptocurrencies for you all week, so that, as every Monday, we can bring you a summary of the most interesting events. Welcome to the next issue of Finex Coin Week.

Bitcoin fell below 40,000, ETH below $ 3,000

The world’s largest cryptocurrency by market capitalization fell another 4.2% on Monday and briefly touched $ 39,866.71. Within hours, she recovered slightly, reaching an important level of $ 40,000.

Bitcoin since 1 January 2022 it has fallen by a total of about 14%. Since its all-time high of $ 69,000 in November last year, this flagship cryptocurrency has dropped an incredible 41%.

A similar scenario occurred for the second largest cryptocurrency according to the market capitalization Ethereum. Cena Etherea (ETH) fell below $ 3,000 on Monday, a level not seen since September last year.

Development of BTC and ETH prices at the beginning of 2022

Normal axis

Logarithmic axis

Interestingly, the market for unmistakable tokens (NFT) continued to grow despite the fall in Etherea prices. For example, the largest NFT market OpenSea recorded its second best month in terms of transaction volume. Its sales are an incredible $ 13.3 billion, according to the company.

The new year started only a few weeks ago, but bitcoin already has several problems. Firstly, there are the political unrest in Kazakhstan, where the government has lifted the price cap on liquefied petroleum gas, which has caused gas prices to practically double.

Subsequent riots resulted in the shutdown of the Internet throughout the country, which allegedly caused a significant proportion of bitcoin miners to stop working..

Another unfavorable news for cryptocurrencies was the Fed’s announcement, which indicated that it might speed up interest rates.. This basically means that the Fed will stop printing money and will instead increase the price of loans to keep inflation in check.

The unrest in Kazakhstan and rising interest rates might be enough for the first two weeks of the new year, but that’s not the end of it.

Diary writer Guardian Carole Cadwalladr On January 3, she wrote in response to a viewing ad for where Matt Damon performs.

There is not enough disgust in the world to describe Matt Damon’s advertisement for the Ponzi scheme.

Is Ethereum a security?

In an interview with CNBC on Monday SEC Chief Financial Officer Garry Gencler answered the question evasively, whether the ETH is a security or not. This is a big topic and a potential threat to many altcoins.

We do not engage in these types of public debates where one project, one possible circumstance, is discussed, nor do we provide legal advice via radio waves in this way,“said Gensler.

But then he added: “If you get money from the public and the public expects to make a profit from the efforts of that promoter, sponsor or group, it is subject to securities laws.

A security is a marketable financial asset that has a monetary value similar to shares or bonds that meet the specific legal definition set out in the so-called Howey test. Under US law, an asset meets the definition of a security when it comes to investing money in a joint venture that is expected to make a profit from its efforts.

Ethereum was sold in 2014 through a public sale to ICO, which would probably be considered an unregistered offer of securities today.

The Securities and Exchange Commission has previously stated that, for example, Bitcoin, the largest cryptocurrency by market capitalization, is not considered a security, but that it focused on other cryptocurrencies, such as XRP Ripple. In December 2020, the SEC filed a $ 1.3 billion lawsuit against the creator of the eighth largest digital asset by market capitalization.

However, according to former SEC Commissioner William Hinman, Ethereum has become sufficiently decentralized not to be considered a security..

Statements from the new SEC chief suggest that he will keep the door open at Etherea for now. At the very least, it is clear that many of the altcoins that formed on the Ethereum blockchain as tokens ERC-20 and currently play an important role in the DeFi sector, considers securities, and plans to regulate them strictly.

Will Solana Ethereum overtake?

Bank of America, one of the leading American banking institutions she said cryptocurrently Solana SUN, perhaps the greatest praise a large American bank can give it. She compared it to the largest credit card network in the world, VISA.

Solana could become the Visa ecosystem of digital assets,“he wrote Alkesh Shah, Bank of America’s global strategist for cryptocurrencies and digital assets, in a research report released Tuesday. As an example, he said that more than 400 decentralized applications run on Solana, hosting everything from peer-to-peer exchanges to the NFT marketplace.

The bank was particularly impressed by the ability to quickly scale the blockchain. Transactions on it are extremely fast and at the same time they are performed for minimal transaction fees. In this respect, Solana is far ahead of Ethereum’s most popular smartchain.

An important factor for comparison is the number of processed transactions per second. Visa says it can theoretically handle at least 24,000 TPS, but on average it can handle around 1,700. Etherea is most often referred to as 15 TPS. Which is insufficient in this case. In addition, due to limited space in the block, transaction fees in the network reach double-digit numbers in dollars.

Although many projects try to solve Etherea’s scalability issues through sidechains on Polygon and rollups on the Arbitrator, congestion is unlikely to be significantly reduced until the full deployment of Etherea 2.0. The creator of Etherea Vitalik Buterin indicated in June 2020 that the modernized network could reach 100,000 TPS.

According to its creators, Solana could roll over Visa I Ethereum by boasting a theoretical limit of 65,000 transactions per second with minimal fees.

According to a representative of Bank of America, Solana prefers scalability. However, it is relatively less decentralized, secure and has weaknesses, which illustrates several network performance issues since its inception, including the September outage.

Don’t buy Bitcoin warns billionaire Jeff Gundlach

CEO of the company Doubleline Capital Jeffrey Gundlach, also known as “King of Bonds”, warned of a “recession later this year.” At the same time, he did not recommend buying bitcoin at the current level. Maybe you should buy it for $ 25,000,“he said.

Gundlach is the CEO of Doubleline Capital, which manages over $ 137 billion in assets. He has been known as the “king of bonds” since 2011, when he appeared on the cover of Barron’s magazine as the “new king of bonds”. Institutional Investor magazine named him “Money Manager of the Year” in 2013 and was ranked among the “fifty most influential” by Bloomberg Markets in 2012, 2015 and 2016.. According to Forbes magazine, its net worth is currently $ 2.2 billion.

He was asked if there would be a recession by 2023. “I think the bond market is already showing enough of a recession, so by 2023 this seems quite likely,“Gundlach replied.

I don’t think many Fed officials, economists and investors take into account the fact that the economy is constantly falling with lower and lower interest rates, so I think the Fed will raise rates four times and we will start to see a lot of recession signals,He warned and added:

As for bitcoin, Gundlach stressed that this cryptocurrency is “for speculators”.

He added: “Bonds correspond to my culture of cowardice. I’m not a momentary investor at all, and I’m actually a bit of an anti-moment investor, and I think bitcoin is only for moment investors. “

Tesla began to accept the Doge as a means of payment

The richest man on the planet and Tesla CEO Elon Musk continues to support the memecoin Dogecoin. Tesla, the largest carmaker by market capitalization, began accepting payments with Dogecoin several months after it stopped accepting payments at BTC due to environmental issues. As a result, the DOGE price immediately shot up by almost 30%.

It’s no secret that Elon Musk is a long-time fan of this cryptocurrency, which used to be a joke. However, his support has recently moved to a completely different level, as Tesla, one of its leading companies, has decided to allow payments with this cryptocurrency for its products. The company explained that users who opt for Dogecoin payment must have a special wallet and can transfer funds via a QR code once connected.

The electric giant has promised to update its prices soon so that they are also displayed in DOGE, but so far they are still listed in fiat currencies.

Tesla also warns potential customers who choose to pay in this form that it will not be possible to cancel orders subsequently. All such purchases will be treated as final sales. Therefore, they cannot be returned, replaced or canceled. The company stressed that Dogecoin is the only cryptocurrency it is currently receiving.

Shortly after the news appeared on the Internet, the DOGE rate rose by 30%, from $ 0.16 to a monthly high of $ 0.21. However, it did not last long at this level and is now just below $ 0.2.

Recall that the company made bitcoin payments with great fame last year, but a few months later stopped the initiative, citing environmental issues. These reports had a significant impact on the future development of the price of this asset.

Conclusion on the current situation

In the first weeks of the new year, there was no major situation in the world of cryptocurrencies that would decide which way to go. For several weeks, we have been consolidating around important support in the $ 40,000 to $ 42,000 range. On Monday, we even fell below the 40,000 mark, which was immediately redeemed and a rebound followed.

In the coming days or weeks, it will be important that we exceed the $ 46,000 threshold, which will be very important. If it succeeds, BTC will be back in the bullmarket and we can think of a sequel to $ 50,000. The opposite option could take us back below $ 40,000. We will monitor how the situation develops and we will bring you the most important news again in a week.

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