Macroeconomics and financial markets
In the US NY stock market on the 9th, the Dow closed at $543 (1.66%) lower than the previous day and the Nasdaq at $237 (2.05%) lower.
Chairman Powell restrained the market in his congressional testimony on the 7th, as recent indicators confirmed that inflation remained higher than expected. As a result, the US Federal Open Market Committee (FOMC) meeting on the 22nd of this month strengthened expectations for a 0.5% increase in interest rate hikes, and turned risk-off.
In addition to the US employment statistics approaching at 22:30 today, position adjustment selling entered, and with the CPI (US Consumer Price Index) on the 14th and the FOMC on the 22nd, investor sentiment is deteriorating again.
connection:US stock market falls for 3 days in a row, bad news for virtual currency market | 10th Financial Tankan
connection:Stock investment recommended for cryptocurrency investors, representative cryptocurrency stocks of Japan and the United States “10 selections”
Virtual currency market
In the crypto asset (virtual currency) market, Bitcoin fell 7.6% from the previous day to $20,130.
When the price fell below the $21,500 support line (lower price support line), it strengthened the downside while involving the futures long loss cut, and temporarily fell below the psychological milestone of 1 BTC = $20,000 and fell to $19,780. Altcoins also fell across the board, and a large-scale loss cut (forced liquidation) equivalent to $250 million was confirmed in the derivatives market.
In addition to the macroeconomic headwinds that have been the main cause of the decline in risky assets such as stocks and cryptocurrencies, bad news has come one after another.
1. Impact of tightening regulations
The New York state judicial authority filed a lawsuit against the cryptocurrency exchange KuCoin on the 9th.
connection:New York regulator sues cryptocurrency exchange KuCoin, claiming Ethereum is a security
Investor sentiment worsened when he pointed out that Ethereum (ETH), as well as the algorithmic stablecoins UST (TerraUSD) and LUNA, which collapsed in May last year, are securities.
Claims that the lending (credit currency) and staking services operated by KuCoin are also equivalent to “sales of unregistered securities”. It also noted that it was not registered with the US Securities and Exchange Commission (SEC) or the US Commodity Futures Trading Commission (CFTC).
The court did not rule that Ethereum is a security, and at the moment it is just an argument from the regulatory authorities, but it is consistent with the view of the SEC (Securities and Exchange Commission), and virtual currency exchanges Concerns were heightened by the filing of a lawsuit against
Ethereum has historically been treated as a commodity by U.S. regulators, including the Commodity Futures Trading Commission (CFTC), but last year at The Merge, consensus-building algorithms were declared proof of work. ) to PoS (Proof of Stake).
In this regard, SEC Chairman Gensler said, “Staking virtual currencies and intermediaries such as exchanges that provide staking services fall under the definition of investment contracts and are likely to be subject to securities laws.” claims.
The SEC filed a lawsuit against the cryptocurrency exchange Kraken for “securities law violations” on the 9th. It demanded payment of fines and suspension of staking services to U.S. customers.
connection:US SEC: Kraken’s cryptocurrency staking service violates securities laws
Last year, following the bankruptcy of major venture capital firm Three Arrows Capital (3AC), lending company Celsius Network, and major virtual currency exchange FTX, the cryptocurrency industry, especially in the United States, has become even more severe. there is
2. Massive remittances by US government agencies
In addition, a large amount of remittances by US government-affiliated organizations raised a sense of caution.
According to on-chain data detected by blockchain security company PeckShield in an alert at 2:00 on the 8th, about 50,000 BTC worth 1.08 billion dollars (150 billion yen) was transferred from the US government law enforcement wallet, It is believed that 10,000 BTC of this was sent to major US exchange Coinbase.
#PeckShieldAlert 49k $BTC (worth $1 Billion) from wallets related to US Government law enforcement seizures have been transferred to #Coinbase (~9.8k $BTCworth $217M), bc1qf2…fsv (30k $BTC) & bc1qe7…rdg (9k $BTC) #SilkRoad pic.twitter.com/4MzlvDzkut
— PeckShieldAlert (@PeckShieldAlert) March 8, 2023
The remittance this time is believed to be part of the newly seized 51,351 BTC between November 2021 and March 2022.
In November 2015, the U.S. law enforcement agency, the United States Marshals Service (USMS), sold 44,341 BTC of the seized bitcoins in an auction format through the dark web “Silk Road,” where illegal drugs were sold. Was.
3. US Tax Tightening
According to the “Budget Statement” announced on the 9th, the US Biden administration proposed a corporate tax rate hike and a capital gains tax on high-income earners in order to reduce the huge fiscal deficit by 3 trillion dollars.
Before taking office, President Biden pledged to increase taxes on the ultra-wealthy to raise funds, in addition to large-scale fiscal spending such as infrastructure investment. He plans to double the capital gains tax rate on investment profits from the current 20% to 39.6%.
With regard to cryptocurrencies as well, he proposed that tax-saving purchases (wash sales) at the end of the year to buy back the same brand with unrealized losses after cutting losses would not be deductible. It is prohibited for stocks and bonds, but we will consider expanding the scope of application.
As a similar transaction, wash trade (disguised self-trading) is also regarded as a problem in the NFT (non-fungible token) market as it can lead to the act of raising the floor price. In the stock market, repeated self-trading of specific financial products without the purpose of transferring rights is regulated by the Financial Instruments and Exchange Act.
connection:US Biden Administration Budget Message Proposed Changes to Virtual Currency Taxation
Many believe that it will be difficult to pass the bill because the Republican Party has a majority in the House of Representatives.
Huobi Token (HT), an exchange token, once plunged more than 90% from the previous day.
why did Huobi token just plummet 90% in a few minutes???? pic.twitter.com/VoYz2V7jyX
—db (@tier10k) March 9, 2023
Justin Sun, the founder of the cryptocurrency TRON and the largest shareholder of Huobi Global, said, “Some large holders may have accidentally sold it, causing a loss cut (forced liquidation). He was rushed to justify, saying that there were no serious incidents in the system, and that prices were starting to return.
The operation of @HuobiGlobal exchange is #SAFEthe wallets are SAFE, and the backend is SAFE. The recent market fluctuations and the leveraged liquidations were caused by few users triggering a cascade of forced liquidations in the spot and HT contract markets.
— HE Justin Sun 孙宇晨 (@justinsuntron) March 10, 2023
After the plunge, there was a large-scale buyback, and as of 12:00 on the 10th, it was 20% lower than the previous day.
According to research analysts at cryptocurrency data provider kaiko, on-chain data confirmed a massive sale of more than $2 million before the plunge.
HT, issued in January 2018, is Huobi Global’s native token issued on Ethereum’s ERC-20 standard. It is used for commission discounts in intra-exchange trading.
In October 2010, founder Leon Lee sold all of his shares to Hong Kong-based asset management company About Capital Management’s M&A Funds. There is a history of Justin Sun becoming an advisor to Huobi.
Due to the bankruptcy of FTX, the disclosure of assets held by the proof of reserve (PoR) of major exchanges, led by the largest exchange Binance, has become active. Huobi Token (HT) may account for 43% of the reserves,” said a report by research firm CryptoQuant, which has heightened concerns among users and investors.
Alameda Research, a sister investment company of FTX, revealed in a leak of its financial statements that a high percentage of its own token FTT accounted for its assets and liabilities. It led to an industry-shattering bankruptcy.
connection:Market Maker Pionex Exits Huobi, HT Token Drops 30% Month-on-Month
Click here for a list of market reports published in the past
[Recruitment]Recruitment of new personnel due to Web3 business expansion
Japan’s largest cryptocurrency media CoinPost is looking for full-time employees and interns as it expands its Web3 business.
1. Media Business (Editorial Department)
2. Marketing operations
3. Conference management and launch work
4. Open Position (students welcome)
Details https://t.co/UsJp3v8mSH pic.twitter.com/B98JZmoQbW
— CoinPost-virtual currency information site-[app delivery](@coin_post) February 14, 2023