Flat bitcoin; Feds Powell Grilled on Crypto

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Bitcoin was flat, holding around $ 33,000, after falling for two consecutive days. The largest cryptocurrency by market cap is now in its eighth consecutive week of trading roughly sideways.

Analysts said bitcoin trading had been bolstered with assets in traditional markets by assurances from Federal Reserve Chairman Jerome Powell that he still did not see “substantial further progress” on an economic recovery – signaling that the US central bank is not likely to reduce monetary stimulus at any time. soon.

Powell’s comments come after the US Department of Labor reported on Tuesday that inflation accelerated in June at the fastest rate in 13 years. Bitcoin is viewed by some investors as an inflation hedge due to the cryptocurrency’s fixed supply schedule.

Related: Nodes On Bitcoin’s Lightning Network Doubled In 3 Months

“What has helped cryptocurrencies turn positive is the widespread rally on Wall Street,” wrote Edward Moya, senior market strategist at Oanda, in an email. “The Fed appears stubbornly dovish and ready to tolerate a few more months of mounting price pressure before considering a change in tone on the transient / persistent inflation debate.”

Latest prices

Crypto-currencies:

Bitcoin (BTC) $ 32,787.2, + 1.62%

Ether (ETH) $ 1,986.1, + 3.19%

Traditional markets:

Ether followed higher with bitcoin, but among altcoins the big story of the day was an increase in the price of the FOX token after the ShapeShift exchange announced plans to become more decentralized and ditch the token. .

In search of clues

Related: New York Giants Star Saquon Barkley To Take All Money From Future Bitcoin Approval

With bitcoin stuck between $ 30,000 and $ 40,000 for eight weeks now, cryptocurrency analysts are scouring blockchain data for clues as to where the market is heading.

The story continues

David Grider, head of digital assets at FundStrat, wrote in a weekly report Wednesday that he was taking a close look at the “return on production spent ratio,” or SOPR. The metric is calculated by dividing the average price at which bitcoin was sold by the average price at which it was purchased.

Grider writes: “When the SOPR is greater than 1, it implies that the owners of the asset are beneficiaries at the time of the transaction. Below 1 means the sellers have capitulated and sold at a loss.

The metric has remained below 1 since May, perhaps a sign that there is a “healthy reset in profit taking”, recalling a similar episode that took place in March 2020, at the start of the coronavirus. Several months later, bitcoin prices recovered and ended up quadruple over the course of the year.

“In a bull market, as we would expect today, an SOPR below 1 may indicate a local low as sellers are reluctant to sell at a loss,” Grider wrote.

Powell talks about stablecoins

Jerome Powell has spent much of his semi-annual testimony before the House Financial Services Committee discussing the outlook for the US economy, the outlook for inflation, and the likely path for monetary policy.

He also asked about cryptocurrencies, as Nate DiCamillo of CoinDesk reported.

U.S. Representative Patrick McHenry from North Carolina, the. Republican ranking on the committee, asked when the Fed would release its highly anticipated report on central bank digital currencies (CBDCs) and crypto.

Powell said the report, which was previously scheduled to arrive this month, will be released in September.

“US regulations, along with environmental, social, and governance (ESG) concerns, are the biggest risks for cryptos, so a September Fed release of [the central bank’s] concerns about digital currencies should be seen as good news for bitcoin, ”said Moya from Oanda.

Powell also weighed on stablecoins, arguing that they will need to be regulated more tightly if they are to become a significant part of U.S. payments networks.

“Stable coins certainly have some advantages in terms of faster payment systems and have certain attributes of CBDCs, but there are currently risks with stable coins,” said Powell. “I think the problem is that stablecoins look a lot like money market funds or bank deposits or a narrow bank.”

In response to a question from Rep. Stephen Lynch (D-Mass.), Powell said the dollar’s status as a global reserve currency is not likely to be threatened, even if other countries develop CBDCs.

The president said central bank digital currencies could undermine the case for decentralized digital assets.

“You wouldn’t need stablecoins, you wouldn’t need cryptocurrencies if you had a US digital currency,” said Powell. “I think that’s one of the strongest arguments in its favor.”

Stopping ShapeShift

Crypto trading pioneer ShapeShift is closing its doors, ceding its legacy to a Decentralized Autonomous Organization (DAO) controlled by the holders of its FOX token.

As it begins a multi-month store closure process, it will begin by dropping $ 98 million in crypto to decentralized finance (DeFi) investors across multiple blockchains.

Following the news, the price of ShapeShift’s FOX exchange token jumped. FOX was changing hands at $ 0.51 at time of publication; Ahead of the news release this morning, the token was trading at $ 0.28. It hit $ 0.68 about an hour after the 11:00 a.m. ET announcement.

Altcoin balance sheet

AXS Rally: Axie Infinity AXS Governance Token Rally Shows No Signs of Slowing Down as Users Continue Flocking to the Gaming Combat Economy to Win Amid lackluster action in broader markets cryptography. The AXS token hit a new high of $ 23.60 early Wednesday, surpassing the previous peak of $ 22.50 reached on Tuesday, according to data source Messari. Axie Infinity Shards, or AXS, are the governance token of the Axie Infinity platform, an Ethereum-based digital marketplace for the Axie Infinity game. “Axie Infinity, created by SkyMavis, allows players to earn income through non-fungible tokens, or NFTs, and cryptocurrencies by raising, fighting and trading digital pets called Axies,” he told CoinDesk an Axie trader based in the Philippines.

Chia continues to expand: Chia Network, the intelligent transaction platform created by BitTorrent founder Bram Cohen, has added five executives across multiple divisions, including sales, product development, and professional services, and has almost doubled its workforce since the end of its last investment cycle in early May.

Solana’s Phantom Wallet Lifts New Round to Go Multi-Chain: Phantom, a digital wallet that sits on Solana’s blockchain network, has raised $ 9 million in Series A funding found led by Andreessen Horowitz (a16z) . Other participating investors included Variant Fund, Jump Capital, DeFi Alliance, the Solana Foundation and Coinbase investor Garry Tan. The funding will be used to expand the Phantom team, develop new features and expand to other blockchains, the company said.

Relevant news Other markets

Notable Winners at 9:00 p.m. UTC (4:00 p.m. ET):

stellar (XLM) + 5.31%

Bitcoin cash (BCH) 1.79%

aave (AAVE) + 1.37%

Notable losers:

tezos (XTZ) -5.26%

algorithm (SOMETHING) -3.83%

dotted (DOT) -3.78%

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