The year didn’t start as bright as we (maybe) hoped. However, along with the bear market, there is some good and interesting news as well. Let’s check January in the cryptocurrencyA digital currency running on a blockchain and built with cryptography. Contrary to central-bank issued currency, cryptocurrency issuance rules are... world.
On the markets
- The BitcoinBitcoin is the first decentralized digital currency. It was created in 2009, by an anonymous founder or group of founders... More (BTCAn abbreviation for Bitcoin.) price lost around 29%, but it’s already on recovery [CoinMarketCap]. That was probably due to the recent political problems in Kazakhstan, the second-largest country in Bitcoin mining during 2021. The miners are now migrating, though. Meanwhile, the whole crypto market lost about 31%, but it’s also on recovery now.
- Most altcoins were affected by the bear market too, but not all of them. Internet Computer (ICP), Chainlink (LINK), and DASH had important peaks in their prices. Meanwhile, from the top 100 in market capitalization [CoinMarketCap], only FTX Token (FTT —a derivative platform) and BORA (an entertainment platform) ended up January with positive percentages. They rose by over 13% and 1%, respectively.
- The Decentralized Finance (DeFi) apps are still driving billions. January ended up with over $80b in Total Value Locked (TVL) on DeFi. Maker, Curve Finance, Convex Finance, Aave, and Uniswap are the most popular apps [DeFi Pulse].
- Non-Fungible Tokens (NFTs) are still booming as well, with over $3.3 billion in sales during January [NonFungible]. The most popular NFT projects per volume are Axie Infinity, Bored Ape Yacht Club (BAYC), CryptoPunks, Art Blocks, and The Sandbox. Now, even China released its own NFT marketplace —under government control, though.
Regulations on crypto
- Some countries in Latin America are preparing their own crypto regulations. Several provinces in Argentina (La Pampa, Entre Ríos, Córdoba, and Tucumán) are collecting taxes on cryptocurrency activities. Colombia wants to do the same nationwide. For its part, Peru released a new proposal for general crypto regulations, including the control of crypto exchanges.
- Spain has been very active in implementing several laws on crypto activities. The exchanges based on the country should pay taxes, and a new taxing model would ask the investors to declare their cryptocurrencies in foreign lands. Although, the Court of Justice of the European Union deemed illegal a previous and identical model. So, likely, this one won’t stay either.
The ads about cryptocurrencies (including services like exchanges or wallets) will be regulated as well from February. If they’re addressed to at least 100,000 people, the companies involved should ask permission first and follow all the guidelines by the National Securities Market Commission (CNMV). They need to warn especially about cryptos being a risky investment.
- Kosovo (Southeast Europe) banned Bitcoin mining inside its borders and seized over 200 machines and GPUs so far. The reason behind this seems to be an energetic crisis. Meanwhile, Russia is considering a blanket ban on cryptocurrencies, or, otherwise, that only the banks could handle them. And Estonia denied a crypto ban but cleared that DeFi operators and crypto exchanges will be regulated.
- The United States is aiming for tighter crypto regulations in 2022, starting from February. The White House is considering the risks involved, the U.S. Treasury wants a power to ban more transactions (including cryptos), the Government Accountability Office (GAO) asks for a better registry on BTMs, and the Securities and Exchange Commission (SEC) is trying to regulate DeFi platforms.
Hacks and scams
- According to DeFiYield, at least 15 DeFi platforms were hacked or made exit scams in January. The ones who lost (or stole) the most funds were Multichain on ETH (hacked for over $2.7 million), Solfire on Solana (exit scam for over $4 million), Arbix Finance on BSC (exit scam for $10 million), Lympo on ETH (hacked for over $18.5 million), and Qubit Finance on BSC (hacked for $80 million).
- The NFT marketplace OpenSea was also attacked by hackers, and over $1m in NFTs were stolen from the users. The most affected were the owners of BAYC, Mutant Ape Yacht Club, Cool Cats, and CyberKongz. The team behind the platform assured that they will reimburse the stolen NFTs to the victims.
- The ransomware gang REvil was finally dismantled by Russian authorities, in collaboration with U.S. authorities. This group of hackers used to attack companies with malware and then ask millions as a ransom to recover the data. This way, they claimed annual revenues of over $100 million in BTC and Monero (XMR).
- The exchange Crypto.com was hacked by over $30 million in BTC. The hackers exploited their 2FA system to withdraw the funds from almost 500 users’ accounts. The company reimbursed the victims, and most of the funds are still on-chain.
Other news
- El Salvador will issue Bitcoin Bonds from February, with an APY of 6.5% (in USD). The raised funds will be used to build a Bitcoin City, and acquire more BTC for their reserves. Indeed, during January, they bought another 410 BTC (around $15 million), for a total of 1,500 BTC on their walletA crypto wallet is a user-friendly software or hardware used to manage private keys. There are software wallets for desktop....
- Several companies and banks are aiming to create their own stablecoins and tokens. They include PayPal, Walmart, MercadoLibre, Synovus Bank, New York Community Bank, FirstBank, and Sterling National Bank. All of them, of course, aside from any Central Bank Digital Currency (CBDC).
- Tonga (Oceania), Borgo D’Anaunia (Italy), and Arizona (U.S.) are opening their doors to Bitcoin. There are already two proposals to make BTC legal tender in Tonga and Arizona. Meanwhile, the government in the Italian city Borgo D’Anaunia is mining BTC through a hydroelectric plant.
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