Crypto fans: Bitcoin’s time has come – that’s what the currency was created for

by time news

In fact, this is probably the first time that Bitcoin registers a double-digit rally precisely in a period of risk, at the same time as declines in the traditional markets. Perhaps it was precisely the lack of trust in the traditional regulatory system that once again seems to be disappointing and failed, and somewhat reminiscent of the 2008 crisis, that caused investors to place renewed trust in the digital currency, which briefly crossed the $26,000 mark for the first time in nine months (although it has fallen slightly since then). Let’s recall that part of the factors that led to the creation of Bitcoin was the crisis of confidence in the traditional financial industry that occurred in 2008.

This is what the “priestess” of innovation investments Kathy Wood wrote (the same one who lost billions of dollars to her investors last year):

As some of the commenters on this tweet pointed out to her, she seems to have forgotten the no less glorious failures of crypto companies in recent months, most notably FTX and Terra Luna. In fact, two of the three banks that collapsed in the last two weeks were closely tied to the crypto world – Silvergate, and Signature. Silicon Valley Bank, the third to collapse, is also connected to the crypto industry, as many of the start-ups in the field worked through it. However, so the more devout followers of crypto argue, this is precisely the problem – the connection to the traditional financial industry subject to speculation and regulatory oversight, and this in contrast to Bitcoin which does not depend on any external factor.

The collapse in banks almost caused another victim in the crypto industry. The second largest stablecoin USCD with a market value of approximately 37 billion dollars lost its peg to the dollar temporarily, this after it became known that part of the money that backs the currency is deposited in Silicon Valley Bank.

What exactly happened? Circle, the operator of the USDC takes your dollar, gives you a token called USDC and invests the dollar in three-month US government bonds (currently yielding close to 5% per year). It seems like a fairly safe deal and a well-oiled cash machine when tens of billions of dollars are invested without risk and yield close to 5% per year without doing anything, in a way that reminds a little of the traditional bank activity of receiving deposits at a low interest rate and investing them at a higher interest rate.

However, the company holds part of the money in cash for liquidity reasons. She distributed this cash in 6 different banks, one of them being Silicon Valley. With the collapse of the bank, there was concern about the fate of over 3 billion dollars deposited in it. The price of the token fell to 87 cents on Saturday, and investors moved to the competing currency Tether (although in relation to it there are also constant fears about the quality of its reserves) and now its market value is more than double the value of the USDC. The company was quick to respond, and announced that it would cover any losses from its own sources, which helped to quickly return the value of the currency to the value of the dollar. The company’s managers even announced that from now on they will deposit the reserves only in the big banks that are considered risk-free because of the government’s backing and more conservative management. Until the event, Circle was considered one of the more stable and regulated businesses in the crypto industry. In fact, there were even news about the offering of the profitable business on the stock exchange, but the latest event undermines its situation a bit.

Again, crypto advocates argue, What hurt Circle was precisely its connection to the traditional financial industry, meaning the deposits of the money in the real world, and not the blockchain technology side. Crypto supporters were quick to make an equal cut between the banking risks and the business risks associated with the stablecoins: “How can we keep our money in the insured banks in the amount of up to 250 thousand dollars?” Crypto entrepreneur Tatiana Koffman wrote, “How can we keep our money in stable currencies that use the same banking partners? The beauty of Bitcoin is its ability to store value in a decentralized way backed by math without the need for humans to verify or support it. No one is backing your deposits In order to make a profit, there is no possibility of running to the banks and no one gambles with the money you earned through your hard work with bonds.”

In the article under the title “Bitcoin was built for this moment” Tatiana wrote that Bitcoin was created exactly for this – an asset that does not depend on the decisions of one or another policy makers, and it is impossible to speculate on it for profit. This is why she sees a future where Bitcoin is the most valuable asset.

It is permissible to continue to be skeptical about Bitcoin despite the claims of Bitcoin supporters and this optimistic article. Let’s mention again what is known to everyone – Bitcoin is a “store of value” only if people believe it to be so, and are willing to give it such a value. It has no intrinsic value and produces nothing and reflects nothing in the real world. Its only value comes from people deciding it has value, and unlike regular coins, there is no body that backs up that value. It is not meaningless. Crowd psychology has power and value, but to declare it the “highest value” asset and see it as a paid solution to all our financial problems would be too presumptuous.

Meanwhile, another front is opening between crypto supporters and the regulator. The FDIC – the body that insures bank deposits and is responsible for managing the bankruptcy of Signature Bank, requires anyone interested in buying the failing bank to give up any possible business related to crypto, as reported by the Reuters news agency, according to two different anonymous sources.

As a reminder, the bank recently decided to expand its business in the crypto world, and some say this is the reason why the regulator closed it down and not other banks that are in difficulties. According to Bernie Frank, a former congressman who was part of the bank’s board of directors, the bank’s closure sends “a very strong anti-crypto message.”

Another crypto-supporting politician, Congressman Tom Amer of the Republican Party, who previously dealt with banking supervision, claims that the Fed is trying to use the banking crisis against the crypto market. In a letter he wrote to the chairman of the FDIC, the congressman accused that the agency “in recent months has been using its powers as a weapon to purge legal digital entities that represent an opportunity for the United States.”

The regulator in New York denied these things and said that the decision “was based on the current state of the bank and its ability to do business and in a safe manner.” It sounds like the tones in the war of declarations between the regulators and the crypto supporters are starting to climb.

More news from last week
Another aspect of the war between the authorities and crypto? Regulators continue to pursue projects that “mix” transfers to disguise their origin, similar to the outlawed Tornado Straw project in the United States. Now authorities in Germany and the United States have shut down a similar project called ChipMixer and confiscated more than 1,900 bitcoins worth more than $45 million.

The further upgrade of the Ethereum network, Shanghai, Received an official date – April 12, after being slightly delayed. The upgrade will definitively transfer the system to proof of maintenance and allow the withdrawal of tokens that are currently staking and cannot be withdrawn. All three tests that have been done for the network so far have passed successfully, although in the last experiment there was little participation, which caused a slowdown in the activity of the experimental network. The developers believe that such an occurrence is unrealistic after the upgrade, as the central network concentrates much more interest, and therefore such a decrease in participation in the activity is not expected.

A group of investors and businessmen submitted A billion dollar lawsuit Against various network influencers for promoting the failed trading exchange FTX. According to the lawsuit, those celebrities promoted the sale of unregistered securities.

More about FTX – According to documents revealed in court, Sam Bankman Pride received payments and loans in the amount of 2.2 billion dollars, mainly from the sister company Alameda. This is compared to his partner Carolyn Ellison, CEO of Alameda, who received only 6 million dollars. In total, Bankman and his associates received 3.2 billion dollars. It seems that the guys left someone out of the celebration.

Meta has officially killed its NFT initiative Less than 5 months after its launch, to the protest of the artists who trusted the initiative and developed works based on it, and a day before its announcement of the layoffs of 10,000 additional workers.

What did the major currencies do this week?
As mentioned, the crypto returned to the euphoria of January with significant increases throughout the market, but above all shined the Bitcoin which reminds of oblivion with almost a third of its value.

Bitcoin (BTC)


BITCOIN
+4.32%




Base:24,760

opening:0

High:25,956

low:24,278

change:

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. After the impressive jump, the coin is now trading for $25,844 and completes an increase of over 50% since the beginning of the year.

Ether (ETH)


ETHEREUM
+3%




ETHEREUM


Base:1,660.2

opening:0

High:1,727.9

low:1,641.5

change:

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. The second largest currency is also taking off, perhaps also in preparation for the expected upgrade, and is now trading for $1712 after a 20% increase from its price a week ago.

Binance Coin (BNB). The third currency is also not far behind with a 21% increase in the last week. One coin traded for $332.

Ripple (XRP). Ripple continues to disappoint and is the only one that actually dropped by a percentage during the week. One coin is traded for $0.37 and the total market value is $18.8 billion.

Cardano (ADA). Cardano wasn’t very impressive either, but still climbed 8% this week and is now trading at $0.3315 and its launch is $11.5 billion.

Polygon (MATIC). Polygon continues to narrow gaps from Cardano with a 16% increase this week to a price of $1.17 and a market value of $10.2 billion.

A new star? The Stax coin (STX) jumped 80% this week and completes a 362% increase since the beginning of the year and is already in 41st place on the list of the largest coins with a market value of 1.4 billion dollars. The currency enables the creation of smart contracts and decentralized applications that use Bitcoin as the base asset and perform the transfers on the Bitcoin blockchain. The smart contracts are considered Ethereum’s strength compared to Bitcoin, and this project bridges the gaps. Let’s recall, however, that many such stars shone in the crypto sky, but few of them survived the upheavals of the industry in the last two years.

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