Michael Saylor, co-founder of Microstrategy and a prominent Bitcoin advocate, recently suggested in a social media post that U.S. pension funds, which collectively manage approximately trillion in assets, will need to incorporate bitcoin into their portfolios. He stated, “There are thousands of pension funds in the United States managing ~ trillion in assets. They […]
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Wisconsin Pioneers State-Level Bitcoin Investment in the U.S.
In a landmark move, Wisconsin has become the first U.S. state to invest in bitcoin, underscoring the growing institutional interest in cryptocurrencies. The State of Wisconsin Investment Board, which manages over 6 billion in assets, purchased 94,562 shares of Blackrock’s Ishares Bitcoin Trust, worth nearly 0 million, and also acquired shares of Grayscale’s Bitcoin Trust […]
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Crypto Fraud-Accused Denver Pastor Preaches Finance in Zambia Just Days After Skipping U.S. Court
A Denver pastor, accused of crypto-fraud, has been spotted in the Zambian capital just days after he reportedly failed to appear in court. The pastor, Eligio Regalado, said about half of the misappropriated .3 million went to the IRS.
Denver Pastor’s Assets Frozen
The Denver pastor accused of misappropriating .3 million raised from members of his church via a cryptocurrency investment scam was spotted in Zambia just a few days after he failed to turn up in court. According to a report by Newsweek, Eligio Regalado was seen preaching about God and finance at a conference in Zambia’s capital Lusaka.
Before his reported appearance at the Glory Shift Conference, Regalado and his wife were charged with defrauding their followers to fund their lavish lifestyle. A court has since issued an order to freeze the couple’s assets as well as barring them from selling securities in the State of Colorado.
A few days after being charged with fraud, Regalado released a video in which he confirmed the Colorado securities regulator’s allegations against him and his wife. He said, however, that half of the .3 million was sent to the Internal Revenue Service (IRS), and a few hundred thousand dollars went towards remodeling a home as per divine instructions.
Divine Investment Advice
While he admitted to the regulator’s charges of selling the “worthless” INDX cryptocurrency to some 300 members of his online church, the pastor insisted he was only following God’s instructions. He implied that regulators should consider this factor as well.
Despite getting into trouble with the INDX cryptocurrency project, Regalado reportedly continued preaching the gospel of finance but this time to a Zambian audience.
“I’m going to speak to you today and I am going to speak to you about finances, and I’m going [to] speak to you about how to make money the Kingdom way,” Regalado said.
At the conference, Regalado also told attendants about God’s gift of “a whole world of cryptocurrency” that he has been given.
What are your thoughts on this story? Let us know what you think in the comments section below.
Moody’s Expect U.S. Banks To Deteriorate, Boon For Bitcoin?
Moody’s Investor Service, better known as Moody’s, has revised its view on the entire U.S. banking system from “stable” to “negative.” They cite rapid deterioration in the operating environment following the bank runs and failure of Silicon Valley Bank (SVB) and Signature Bank.
Moody’s Downgrades The Entire U.S. Banking Sector
Moody’s also warned that it would further downgrade or place on review seven financial institutions, which could impact the sector’s credit ratings and borrowing costs.
The rating firm, among three of the world’s best, gave its outlook on the entire U.S. banking system following the bank runs and subsequent failure of SVB and Signature Bank, which caused a contagion across the financial markets.
In a report, Moody’s said:
We have changed to negative from stable our outlook on the U.S. banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY.
By moving in to change their preview on the state of the U.S. banking system, their change could impact credit ratings, which, in turn, would impact borrowing.
The Federal Reserve (Fed) has reportedly established a facility to ensure that institutions with liquidity problems would have access to cash, effectively opening swap lines in the U.S. Banking sector’s deposit base totaling .6 trillion.
So the FED just opened swap lines on the entire US Banking deposit base of .6T. The FED balance sheet is .4T. One year swaps. Then what? Did the FED just become the FDIC? Who eats the losses? Isn't this QE infinity? Can the banks make any loan now consequence free… https://t.co/cvmnlS3Utq
— Lawrence Lepard, "fix the money, fix the world" (@LawrenceLepard) March 14, 2023
Through the Treasury Department, the U.S. government also said depositors with more than 0,000 at SVB and Signature would have full access to their funds.
Countering Fed’s assurances, Moody’s said that concerns remain. Specifically, their report said banks holding substantial unrealized securities and non-retail, uninsured U.S. depositors are still potentially at risk of loss.
The rating firm also expects the U.S. economy to fall into recession later this year, further pressuring the industry.
Bitcoin Rallying As Inflation Drops
Amid the banking crisis, Bitcoin maintains an uptrend. The cryptocurrency has been rallying since the United States government, on Sunday, said it would intervene and bail out depositors affected by the closure of Silicon Valley Bank (SVB). The coin quickly reversed last week’s losses early this week, bouncing from ,700 to soar above February high to over ,000.
Notably, this development comes amid dropping inflation in the United States. Recent Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics showed that inflation slowed to 6% for its February print.
Although inflation was a central metric being tracked closely by traders and investors, the risk of a system-wide financial collapse in the United States seems to supersede all other economic data.
Current market expectations for the path of the Fed Funds Rate…-Mar 22, 2023: 25 bps hike to 4.75%-5.00%-Pause-Rate cuts start in July 2023 w/ a Fund Funds Rate of 4% at the end of 2023 and 3% at the end of 2024. pic.twitter.com/ICPJbBSD7d
— Charlie Bilello (@charliebilello) March 13, 2023
With the government intervening and inflation dropping, analysts expect the Fed to reverse its previous monetary policy stance and slow down on rate hikes in the coming months.
A Record 67.7% Of Bitcoin Remains Unmoved As U.S. Banks Implode
Onchain data suggests that Bitcoin (BTC) appears to be a haven for investors looking to escape the unfolding banking crisis in the United States. A staggering 67.7% of all BTC has remained unmoved for over a year, recent data from Glassnode shows.
Banks are failing, and a record high 67.7% of all BTC has not moved on over 1 year.
The stage is set for a parabolic bull run unlike any other.
Hyperbitcoinization is here. pic.twitter.com/DkCseaVzyS
— Joe Burnett ()³ (@IIICapital) March 13, 2023
Bitcoin Rallying In A Financial Storm
The baking crisis in the U.S., such as Silicon Valley Bank, Silvergate Bank, and Signature Bank, has sent reverberations across the markets, causing U.S. bank stocks to plummet.
On the other hand, Bitcoin and the broader cryptocurrency market are rallying. BTC’s recovery has seen the coin register new Q1 2023 highs, pushing prices above ,000 at some point during the New York session on March 14.
This expansion of Bitcoin’s prices could be a testament to the network’s unique attributes as a store of value and a decentralized currency not subject to the whims of central authorities like the United States Federal Reserve (Fed).
It should be noted that Bitcoin’s origins are based on the Great Financial Crisis (GFC) of 2008. The decentralized network was created to respond directly to this crisis, providing an alternative currency immune to the control of a single entity.
Satoshi Nakamoto, the mysterious creator of Bitcoin, included an inscription in the first block of Bitcoin that reads “The Times 03/Jan/2009 Chancellor on the brink of second bailout for banks.”
Centralized Storms Accelerating Adoption Of Decentralized Solutions?
Satoshi’s initial message rings true as central banks prepare to intervene and avert a financial crisis. It also allows critics to question the reliability of central banks’ policies. Bitcoin embodies the idea of shifting away from centralized institutions by offering a secure, decentralized form of currency that is not subject to the whims of central authorities.
Investors now realizing Bitcoin’s value in times of economic uncertainty are ramping up, increasing their holding. As of February 1, 2023, long-term holders constituted 73% of the BTC supply.
Currently at the greatest divergence of LTH vs. STH of #bitcoin supply ever.
LTHs 78% vs 22% STHs
Sell pressure is minimal from 15 million coins pic.twitter.com/wGORJngXlt
— James V. Straten (@jimmyvs24) February 1, 2023
This indicates that many investors looking for a safe haven recognize Bitcoin’s value proposition in uncertain times.
Over the weekend, Bitcoin facilitated over 600,000 transactions, settling billion. The network issued 2,037 new BTC, maintaining a steady and predictable inflation rate of 1.8%. Meanwhile, over 1 million unique addresses were generated, indicating more people joining the network.
Over the weekend, Bitcoin settled ~ billion, facilitated ~600k transactions, & issued 2,037 new BTC at a steady & predictable ~1.8% inflation rate. ~1 million new addresses were generated & miners earned m producing 326 blocks.
Banks were closed. The Fed was not needed.
— Yassine Elmandjra (@yassineARK) March 13, 2023
The recent failures of traditional banks, the subsequent rally in the Bitcoin price, and a record-high percentage of BTC remaining unmoved could indicate that long-term holders are confident about Bitcoin’s ability to weather the market’s turbulence.
U.S. Doesn’t Want To Get Entangled With The Silicon Valley Bank Collapse: Binance Boss
In a now-deleted tweet on March 12, Binance CEO, Changpeng Zhao, spoke on the failure of Silicon Valley Bank (SVB) and the U.S. government’s subsequent bailout of depositors. In the tweet, Zhao said the government doesn’t want to get entangled.
Binance Boss: Silicon Valley Bank Bailout Makes Bank Reckless
He argued that once the government bails out a bank, it creates a dilemma because if they don’t bail out a bank in the future, they will be questioned as to why they did it before. Therefore, banks have “zero incentives to manage risk, leading them to take maximum risks for maximum returns.”
Bailing out Silicon Valley Bank can be seen as a preemptive move to prevent a potential banking crisis. Regulators have been working behind closed doors to find a buyer for the bank. Meanwhile, Bitcoin prices increased on March 13, rising above ,500.
Signature Bank’s failure further compounded fears that the banking crisis could spread. The government announced that all SVB depositors would be protected and able to access their money from today, March 13. Additionally, steps would be implemented to protect the bank’s customers and prevent further bank runs.
Regulators need to step in to do a *backstop* of depositors (not a bailout of a bank)
40,000 SVB depositor small businesses30% will fail to make payroll in the next 30 daysEstimate 10 employees each120,000 jobs on the line
Years of US innovation on the line
— Garry Tan 陈嘉兴 (@garrytan) March 11, 2023
U.S. Treasury Secretary Janet Yellen acknowledged that the failure of SVB was a concern and that the government was designing appropriate policies to address the situation. She also assured the public that the American banking system is “safe, well-capitalized, resilient, and tested.”
Even so, the situation raises concerns about the fragility of the banking system and the potential for future failures. Zhao’s comments pointed to a lack of incentives for banks to manage risk if they know they will be bailed out in the event of a failure.
This raises concern because if banks continue to take risks, it could lead to other failures. Subsequently, this would destabilize the broader financial system.
Financial Stability Is Critical
Changpeng Zhao argues that resilience and stability require greater transparency, accountability, and a focus on protecting depositors. It also demands banks take responsibility for managing their risks and not rely on government bailouts to protect them from the consequences of their actions.
While the Treasury Department’s actions can prevent a potential crisis, it also raises questions about whether they should be bailing out private banks in the first place.
SVB does not deserve a bailout.
A deep look at their financial statement reveals how horrific they were at risk management.
And in my opinion incompetence explains only part of it.
Moral hazard must have been at play.
A thread.
1/
— Alf (@MacroAlf) March 11, 2023
Many have argued that regional banks that take unnecessary risks should be allowed to fail, and the government should focus on protecting depositors and preventing contagion to risk-averse banks.
How Cardano Could Fix Staking Services In The U.S.
Cardano Founder Charles Hoskinson speaks on a possible solution for the staking programs after the settlement between the Securities Exchange Commission (SEC) and crypto exchange Kraken in the U.S. The question of how these products can survive and continue to generate rewards for American users has surfaced following these events.
Can the crypto industry find a solution to generate returns under the jurisdiction of the SEC and the tightening regulatory policies in the U.S.? Hoskinson tried to answer this question in a recent video uploaded to his YouTube channel.
Can Cardano Provide The Solution For The Disease?
Charles Hoskinson, the founder of Cardano, addressed the case of staking programs and suggested that staking models need to change to avoid regulatory feuds and improve staking services.
According to Hoskinson, Cardano is discussing introducing a new concept of a new staking model certificate called “contingent staking.” This new mechanism will allow staking pool operators (SPOs) to choose which users are allowed in the pool to comply with U.S. regulatory laws.
Cardano’s concept is based on a proof of work principle, where there is a bilateral consensus between the pool operator and the user interested in being part of the staking services, not only for regulatory purposes but also to “improve the distinction and work system in the staking programs.”
This contingent concept will drastically change the relationship between SPOs and participants from a non-consensual push of staking contracts to a bilateral relationship. In this new mechanism, the operator can decide and confirm the transactions of the coming participants and sign a contract to accommodate regulatory nuances, according to Hoskinson.
Furthermore, Hoskinson stated that if the regulatory system goes in the wrong direction for the crypto industry, the contingent stake could provide the solution for running the stake pools in the U.S.
The Cardano founder addressed the case between Kraken’s staking services in the U.S. and the SEC. Hoskinson stated that now that this case has exposed regulatory enforcement by the SEC, the community will get more involved in finding a solution.
In short, The Cardano founder said that the current enforcement law applied in the crypto industry by the U.S. government is a “counterproductive way of conducting financial business.” If the landscape remains unchanged from the regulatory side, tSPOs will have to find a solution for the staking programs.
After the sideways price action of Cardano in recent weeks, ADA, like most of the cryptocurrency ecosystem, retraced after the SEC and Kraken settlement on February 9th.
ADA is trading at .359, down 1.8% in the last 24 hours and 9.8% in the previous seven days. If ADA fails to lean on the current support level of .350, it may suffer further retracement price action and could find support at .326.
Featured image from Unsplash, chart from TradingView.
U.S. Government Releases Roadmap To Mitigate Crypto Risk For Investors
The U.S. government is set to tighten regulations to mitigate the growing risks associated with the crypto industry. This development comes after increased scrutiny following the collapse of FTX and Terra Luna in 2022.
In a press release on January 27, the White House put forward a comprehensive roadmap designed to protect investors and hold bad actors accountable. The roadmap highlighted several measures for more effective regulations in the crypto industry.
A Two-Pronged Approach By U.S. Government
The U.S. government revealed that it had spent the past two years identifying the risks of cryptocurrency and finding ways to mitigate them. To ensure these measures are implemented, the White House intends to utilize a two-pronged approach.
Firstly, the U.S. government has developed a framework for individuals and organizations to safely and responsibly develop digital assets. This includes addressing the risks they pose as well as highlighting poor practices within the crypto industry.
Secondly, agencies have been mandated to increase enforcement and develop new regulations where needed. While there’s an increase in public awareness programs designed to help consumers understand the risks of buying cryptocurrencies.
Related Reading: US Federal Regulators Warn About Crypto Activities
The White House also pointed out that Congress had a major role in expanding regulators’ powers and passing transparency laws for cryptocurrency companies. It also warned about passing legislation that would reverse the current gains and tie cryptocurrency with the U.S. financial system.
In addition, the government intends to commit significant resources toward digital assets research and development, and this would help technologies power digital currencies and protect investors by default.
Crypto Industry Still Reeling From FTX Collapse
The crypto industry is still recovering from the bearish markets resulting from several CeFi platforms’ high-profile collapses. 3AC, Voyager, BlockFi, and FTX were among the top platforms to file for bankruptcy, with the quartet holding more than 0 billion in assets.
The nature of FTX collapse brought about increased scrutiny of the crypto industry. Congress testimonials exposed the risk-averse nature of crypto companies’ executives as details emerged that Sam Bankman-Fried misused clients’ funds through his trading firm Alameda Research.
The ripple effect was massive as several individuals and firms exposed to the platform suffered huge losses, with some companies forced to shut down. These events caused concerns and reactions from within and outside the crypto space. It is, therefore, unsurprising that the U.S. government is looking to tighten its grip on regulations.
Related Reading: Crypto-Friendly Bank Silvergate Suspends Dividend Payouts
Months after the FTX crash, there’s still increased skepticism about the crypto industry. There’s an increase in the amount of bitcoin withdrawn from exchanges, and earlier this month crypto bank, Silvergate revealed that clients withdrew almost billion of their crypto deposits.
Featured image from Pixabay, chart from TradingView.com
U.S. Institutions Are Driving Bitcoin Prices, Matrixport Research
Bitcoin prices have been on the rise in the last couple of weeks and the digital asset has been able to return to its November 2022 levels. This has been a much-needed boost for the market during this time, but an unexpected investor group is reportedly driving the price of the cryptocurrency.
Bitcoin Surges Are Happening During U.S. Hours
In a new Matrixport report that was shared with NewsBTC via email, U.S. institutional investors are driving the recent price increase of bitcoin. The report notes that over the course of January, the digital asset is already up over 40% but more than 35% of those increases have happened during U.S. trading hours. As such, the research report concludes that U.S. investors are driving the price.
Matrixport explains the reasoning behind this by saying that when an asset performs so well during U.S. hours, especially one that trades for 24 hours, it shows that institutional investors are buying the asset. However, when it does well during Asian hours, then it means that Asian retail investors are buying it.
The most significant movements have happened during this time and the trend lines show very strong similarity to Bitcoin’s movements to this point. But even more interesting is the fact that the data shows that U.S.-based investors are responsible for 85% of the total BTC buying that is happening currently.
What Is Driving These U.S.-Based Investors?
As the Matrixport report notes, U.S.-based investors have been encouraged by the inflation slow-down. It has put individual and institutional investors in positions where they believe they can take more risks. Hence, there is a marked increase in their exposure to risk assets such as bitcoin.
Furthermore, the report points to the possibility of more rallies given the fact that inflation is expected to keep falling. “This could set up the crypto market for a mid-month rally, every month and turn into a trend where we see a strong rally from mid-month onwards with some consolidation towards the end of the month as traders take profit and miners sell calls.”
This is also good news for altcoins as Matrixport notes that historically, money flowing into bitcoin will eventually spread out into other digital assets. So this could mean that the market has not seen the last of the altcoin rally once these institutional investors begin spreading out their investments.
BTC is currently trading at ,959 at the time of this writing. The coin is seeing small gains of 0.06% in the last 24 hours but on a seven-day rolling basis, the digital asset is still doing quite well with 9.45% gains.
U.S. Economic Data Foils Bitcoin Bulls’ Rally Attempt To Retake $17,000
Bitcoin is retracing and might be at the end of the short-term bullish momentum; the macroeconomic data might have shifted once again against it. The cryptocurrency saw profits after weeks of trending to the downside, but the rally is losing steam.
The number one crypto by market cap is moving sideways after the collapse of FTX pushed it below critical support. As of this writing, Bitcoin trades at ,900. The BTC price has yet to reclaim that level at around ,500.
Bitcoin Continues The Struggle, A New Status Quo Is In The Making
Over the previous week, the market rushed to the upside on the back of a potential U.S. Federal Reserve (Fed) monetary policy pivot. The Fed Chair Jerome Powell hinted at a change in their strategy during a speech at the Brookings Institution.
Powell spoke about moderation for the first time in months since hiking interest rates to slow down inflation. During this speech, the Fed Chair said:
Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.
Bitcoin, crypto, and legacy financial markets were trending to the downside due to this monetary policy. Powell speaking of moderation gave them room to rally, but today the U.S. posted data on its job sectors that killed the bullish sentiment in the market.
The nonfarm payrolls and private payrolls came in hotter than expected. The market was expecting much lower results. The metrics recorded 263,000 and 221,000, respectively. This data hints at a strong jobs market, which contributes to inflation, and allows the Fed to keep hiking rates.
OOPS! No Goldi-lockish US jobs data. A bit too hot! pic.twitter.com/djivTXhgy0
— Holger Zschaepitz (@Schuldensuehner) December 2, 2022
Immediately after this data became public, the market began pricing in a higher probability of a 75-basis point (bps) hike in interest for December. Analyst Ted Talks Macro believes the previous week’s rally and subsequent price action could be part of a new status quo.
The market might be stuck in a game of ping-pong, a game of frustration, between bullish and bearish forces. A strategy employed by the Fed to keep inflation in check without harming the economy. Ben Lilly, Co-Founder at analytics firm Jarvis Labs, said the following about the status quo in the markets in response to Ted’s thesis:
This process of bullish macro conditions, met shortly after with a reason to be hawkish (moving goalpost/expectations of FED action) is a level of uncertainty that is strategic. If things are stressing ever so slightly and rates need to settle… what’s your next option? This.