Strong recovery on Bitcoin (BTC) and Ethereum (ETH); The Ukrainian government will present unchangeable NFT tokens – a weekly review of the cryptocurrency market

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Conclusion: The cryptocurrency market has been recovering for two weeks: the price of Bitcoin has now returned to the level of the first year, and ethereum is approaching this level. This increase is most likely due to increased risk appetite and favorable regulatory changes. However, global tensions, especially the occupation of Ukraine, could change rapidly. In the context of Ukraine, the country intends to issue a number of non-exchangeable tokens (NFT).

Rise to the level of the beginning of the year

Since December last year, the situation in the cryptocurrency market has been shaped by the current situation Stock market, especially for technology resources and growth resources. In our view, the mood has changed, especially for more risky assets such as technology stocks and cryptocurrencies, with investors replacing some of their high-risk assets with less risky assets, leading to a decline in cryptocurrencies. The total market capitalization in November reached a record high. In addition, against the backdrop of growing global tensions – especially intensified by the Ukrainian occupation – cryptocurrencies do not appear to be the safe haven that members of the cryptocurrency community, who consider bitcoin to be the digital equivalent of gold, have hoped for. Contrary to this assumption, the cryptocurrency market performed poorly in times of growing global tensions.

As a general approach to market risk and global uncertainty have recently had a clear impact on the cryptocurrency market, investors analyzing short-term movements in the cryptocurrency market should prioritize these issues. Many rising stocks have partially recovered since mid-March. For example, the Ark Innovation Fund strengthened from a low of $ 52.5 in mid-March to $ 64.50. This is a sign that the previous risk appetite has returned to some extent. So far, the cryptocurrency market seems to have benefited – bitcoin has returned to its original price of the year, and ethereum continues to approach it. However, whether this increase in risk appetite is sustainable in the long run depends largely on global tensions, ie the occupation of Ukraine and its long-term consequences.

As for the uncertainty, this time it concerns only the cryptocurrency market, especially in the last month, which has been affected by positive developments in the field of market regulation. As the regulatory environment is one of the main sources of uncertainty in the cryptocurrency market, regulatory clarity is important for the future development of this area. In early March, President Biden signed an order to analyze the cryptocurrency regulatory environment. However, the regulation was relatively useful because it was primarily aimed at promoting innovation. A few days later, the European Parliament voted in favor of a bill that effectively banned cryptocurrencies using a consensus protocol. proof of work It is still used for bitcoin ethereum, due to environmental problems. The European Parliament voted against this provision (30-23). Janet Yellen, the US Treasury Secretary and former chairman of the Federal Reserve, said last week Comment About cryptocurrencies: “I’m a little skeptical because I believe there are legitimate concerns,” he said. Among others, they are concerned about financial stability, consumer / investor protection, the use of cryptocurrencies for illegal transactions, and other issues. On the other hand, cryptocurrencies also bring some benefits, and we are aware that innovation in the payment system can be healthy. ” The last point is really interesting, because Yellen has always been very skeptical about cryptocurrencies. This could mean that Yellen’s approach to cryptocurrencies will be more favorable in the future.

The Ukrainian government will introduce non-exchangeable tokens (NFT)

In late February, shortly after the occupation of Ukraine, the Ukrainian government went public begged for support in bitcoins, ether, and other Ethereum-based tokens, such as USDT stabilcoins, to fund defense enhancements. It was announced last week that on March 30, the Ukrainian government will issue a number of non-exchangeable tokens (NFT). This series includes 54 NFTs, each reflecting the highlights of the first days of the occupation (February 24-26). The Ukrainian government in connection with this NFT series announced: “We will not allow one day of this period to be erased from the book of world history. “. All proceeds from the sale of NFT will be transferred to the official cryptocurrency account of the Ministry of Digital Transformation of Ukraine to provide financial support to the country.

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More cryptocurrency market analysis is available here.

Mads Eberhardt, Saxo Bank’s cryptocurrency market analyst

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