The DFi Labs Wrap
CRYPTO ASSET MARKET PERFORMANCES BTC/USD Bitcoin rose by 0.48% in the week ending 6th June. Since the price of BTC dropped below $40K in mid-May, the price of the asset has meandered throughout the $32K-$38K range, never quite managing to gain momentum for a break…
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CRYPTO ASSET MARKET PERFORMANCES
BTC/USD
Bitcoin rose by 0.48% in the week ending 6th June. Since the price of BTC dropped below $40K in mid-May, the price of the asset has meandered throughout the $32K-$38K range, never quite managing to gain momentum for a break above the $39,500 and $40,000 levels.
If BTC fails to break the $38,500 resistance, it could extend its decline. Bitcoin initially dropped during the trading session on Friday, dipping below the 200-day EMA. However, by the end of the session, we have simply balanced just above it, and now it looks as if the market is still in its “wait-and-see” mode that it has been in for a while.
ETH/USD
Ethereum rallied by 13.54% in the week ending 6th June. Following a 13.69% gain from the previous week, Ethereum ended the week at $2,710.97. Overall, it has been a productive week of trading for ETH. The Ethereum price has started the weekend well, gaining +3.5% to $2,775.
The ETH/USD was trading within a range of 2,650.70 to 2,856.63 in the previous 24 hours Trading volumes have dropped off this week which makes sense given last month’s decline. However, volume data from Coinbase shows that in the last 24 hours, Ethereum trading has accounted for 20.55% of total volume versus Bitcoin’s +18.03% contribution. Even before the cryptocurrency markets started their dramatic fall in May, ETH outperformed BTC on price in relative terms.
Ethereum surged on Thursday after the Cybersecurity Company Norton announced a new element that would allow users to mine Ethereum using their graphic cards. The new feature, called “Norton Crypto”, will work with the firm’s Norton 360 internet security suite. Customers were invited to try out the new feature from Thursday. CEO Vincent Pilette explained that digital assets were continuously growing, and were headed towards becoming an integral part of consumers’ lives.
Suarez also revealed that he was a crypto investor himself and that he had bought BTC and ETH when the cryptocurrencies were trading at around $ 30,000 and $ 1,500 respectively. He also added that he purchased ETH when the US Senate passed the $1.9 trillion stimulus bill. He said that one of the reasons behind this was that inflation was inevitable, and there had to be some kind of hedge.
LEGAL TENDER? THE REGULATION OF CRYPTOCURRENCIES
While cryptocurrencies are spreading rapidly around the world, governments are slow to respond with regulation. With laws always a step behind technological developments, governments are barely beginning to respond to the challenges posed by new digital currencies. Bitcoin is legal to own in most countries, but has never been classified as legal tender.
El Salvador could turn cryptocurrency into a legal medium of exchange, becoming the first country to do so. The president of El Salvador, Nayib Bukele, announced in a recorded message played at a Bitcoin conference in Miami that he will send a bill to the legislature this week to make Bitcoin a legal tender in his country. He would work with digital wallet company Strike to build the necessary financial infrastructure using bitcoin technology. Many details of how the plan would be implemented are still unclear, but the proposal has a good chance of becoming law as Bukele’s party won a landslide in the last general election and now controls Congress.
Making Bitcoin legal tender is a big step that can help countries like El Salvador move from a large cash economy to an innovative, inclusive and transparent digital economy. Bitcoin transactions happen almost instantly. Cryptocurrencies do not technically require their holders to have bank accounts. Instead, these currencies exist in digital wallets. This is especially useful in El Salvador, where about 70% of people do not have bank accounts or credit cards. This could also help poorer communities, not only in El Salvador but also in some minority communities in the US.
In addition, remittances account for more than 20% of El Salvador’s GDP, and mainstream services can charge 10% or more in fees for international remittances that take days to arrive and need to be picked up at a physical location. That’s hundreds of millions of dollars a year that people could save or spend with local businesses in their communities – demonstrating the powerful use cases and addressable market opportunities from scaling Bitcoin and the Lightning Network for everyday purposes.
The rapid rise in Bitcoin’s price warrants increasing attention from tax authorities. The president of El Salvador has just confirmed that the country will not levy a capital gains tax on Bitcoin as the cryptocurrency is set to become a legal currency.
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