Cryptocurrency prices fell on Friday, falling during a busy week that included rising interest rates and regulatory efforts. The White House has announced its regulatory framework for cryptocurrencies, the SEC has claimed jurisdiction over Ethereum, and the IRS is going after crypto tax evaders. Meanwhile, JP Morgan (JPM) argues that rising interest rates should benefit Coinbase (PIECE OF MONEY), which denied reports of market manipulation on Friday.
From Warren Buffett’s indirect crypto investments to the latest $160 million DeFi hack, here are this week’s top cryptocurrency news.
Also be sure to check out this week’s coverage of Cryptocurrency ETFs like BITQ, BLOK and BITS.
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Cryptocurrency price action
Bitcoin fell to around $18,800 at market close on Friday after recovering above $19,400 on Thursday evening. And Ethereum has fallen below $1,300, now down around 12% in the past seven days. Ethereum price slipped after merge with a proof-of-stake network this should make the system faster and much more power efficient. Cryptocurrency prices fell over the week on the latest inflation data.
Cryptocurrency price heatmap:
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IRS Comes After Crypto Tax Evaders
A lawyer for the Southern District of New York has authorized the Internal Revenue Service to issue a “John Doe summons” to collect unpaid taxes on cryptocurrencies. The subpoena compels MY Safra Bank to produce information on US taxpayers who may have failed to report or pay taxes on crypto transactions. Specifically, the IRS is seeking information on users of the crypto broker SFOX, who have used the services offered by MY Safra Bank to clients engaged in cryptocurrency transactions. “The government is committed to using all tools at its disposal, including John Doe summonses, to identify taxpayers who have understated their tax obligations by not reporting cryptocurrency transactions, and to make sure everyone pays their fair share,” said Damian Williams. , attorney for the Southern District of New York.
Coinbase denies exclusive trading
Coinbase denied reports from the Wall Street Journal saying that the crypto exchange participates in proprietary trading to act as a market maker. The WSJ report claimed that the crypto exchange hired Wall Street veterans to trade and “bet,” or lock, cryptocurrencies using company money to generate profits. Earlier this year, the team closed a $100 million deal to test the effort. Coinbase says from time to time that it buys cryptocurrency as a principal, for cash flow and mining purposes. But it does not take into account these transactions on own account, because the goal is not short-term gains.
Blockchain Patent Applications in China
China accounts for 84% of blockchain applications globally, according to government officials from the Ministry of Industry and Information Technology. However, despite the highest number of patent applications, only 19% of those filed are approved, reports the South China Morning Post. As China takes an interest in blockchain technology and NFTs, it banned cryptocurrency mining and trading earlier this year.
Jamie Dimon Calls Ponzi Schemes Cryptocurrencies
JPMorgan CEO Jamie Dimon called crypto tokens “decentralized Ponzi schemes” during testimony before the House Financial Services Committee on Wednesday. Dimon, who has criticized Bitcoin in the past, called cryptocurrencies dangerous, pointing to money laundering issues and the billions lost in hacks and fraud. However, “properly regulated” stablecoins would not be problematic, Dimon said. JPMorgan launched an in-house stablecoin in 2020, as well as opening a virtual lounge at Decentraland earlier this year.
House Drafts Crypto Regulations
The US House of Representatives has drafted a bill to regulate stablecoins, according to Bloomberg. The legislation would impose a two-year ban on algorithmic stablecoins that are backed by another digital asset from the same creator, which is how TerraUSD crashed earlier this year. The bill states that it would be illegal to issue or create new “endogenously backed stablecoins” and requires multiple agencies to collaborate on a Terra-esque token study.
Kraken Exchange CEO resigns
Jesse Powell, CEO of crypto exchange Kraken, is stepping down. COO Dave Ripley will take the reins of the fourth-largest cryptocurrency exchange, based on spot trading volume, according to data from CoinMarketCap. Powell, the company’s largest shareholder, will remain chairman of the board.
SEC claims jurisdiction over Ethereum
The Securities and Exchange Commission has claimed jurisdiction over Ethereum transactions, arguing that they take place in America because Ethereum nodes are “clustered more densely in the United States than in any other country.” The claim was made in a lawsuit against Ian Balina, cryptocurrency promoter and CEO of crypto investment research platform Token Metrics. Balina is accused of illegally selling Sparkster tokens for its unregistered initial coin offering in 2018, raising $30 million from 4,000 investors. Because the sale took place using the Ethereum blockchain and the transactions were validated by Ethereum nodes, it happened in the United States, according to the SEC.
Bitcoin electricity consumption
Bitcoin accounts for up to 77% of electricity consumed on cryptocurrencies, according to recent data from BanklessTimes. As of mid-August 2022, the United States’ share of Bitcoin’s global electricity consumption is estimated to be between 33 and 55 billion kWh per year, which is comparable to the total annual consumption of countries such as Portugal, Spain. Switzerland, Algeria and Peru. According to estimates, the US crypto industry currently emits between 25 and 50 million metric tons of CO2 per year.
Warren Buffett invests indirectly in crypto
Warren Buffett has criticized cryptocurrencies, saying they have no intrinsic value. This criticism has kept Berkshire Hathaway (BRKB) away from digital banking, crypto firms, and NFTs. But Buffett’s recent filings with the SEC show it may be opening up to some of these more speculative assets, at least indirectly.
Nasdaq launches digital assets business
Nasdaq (NDAQ) is building a new company to drive institutional adoption of digital assets. The new Nasdaq Digital Assets company will provide custody solutions, liquidity and execution services to financial institutions. The Nasdaq also plans to expand its anti-financial crime technology capabilities to cover the space. “The technology that underpins the digital asset ecosystem has the potential to transform markets over the long term,” said Nasdaq CEO Adena Friedman. “To seize this opportunity, our focus will be on delivering institutional-grade solutions that bring greater liquidity, integrity and transparency to support evolution.”
Latest $160 Million DeFi Hack
On Tuesday, UK-based cryptocurrency maker Wintermute had $160 million stolen from its decentralized finance operations. CEO Evgeny Gaevoy said things will return to normal after the service disruptions today and in the coming days. Wintermute provides liquidity to over 50 exchanges and trading platforms, including FTX, Coinbase, Binance, Kraken, and Uniswap.
Where is Bitcoin after the Ethereum merger?
Over $20 billion worth of ETH is effectively guaranteed to run the Ethereum network following its merger with proof-of-stake. Where Does This Leave Bitcoin Proof of Work as the crypto winter drags on?
Coinbase could benefit from higher rates, says JPMorgan
Coinbase could generate $1.2 billion in interest income in 2023, JPMorgan estimates. JPMorgan analyst Kenneth Worthington said Coinbase could have a “substantial revenue opportunity” thanks to higher interest rates and the one-month Treasury yield hitting 3.75% by the end of the month. the year. He expects $700 million of that revenue to come from the Center Consortium, Coinbase’s 50/50 joint venture with Circle, which oversees the USDC stablecoin. Worthington raised its price target for COIN shares to $78 from $64, but maintains a neutral rating.
FTX has $1 billion to spend on acquisitions
Crypto exchange FTX has more than $1 billion to spend on acquisitions and bailouts, CEO Sam Bankman-Fried told CNBC’s Squawk Box. Bankman-Fried said it depends on how comfortable they are deploying, but there’s another “rough billion that’s completely free”. FTX has become a lender of last resort and has bailed out several crypto firms over the past year — or at least publicly offered to — as cryptocurrency prices plunged.
Binance launches NFT gift cards
Binance launches the first NFT gift cards. The crypto exchange releases gift cards and digital gift cards that exchange non-fungible tokens instead of fiat currency. Binance intends for various crypto projects to use them as a way to build brand awareness, engage with their communities, and provide a user-friendly entry point to the NFT space.
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