Crypto Scoop: BTC, ETH, and Several Cryptocurrencies Drown in Red Following Major Sell Offs

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February, 25 2022

Crypto Scoop

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BTC, ETH slump in red as several countries push out bills to recognising bitcoin as a legal tender.

The crypto space was gripped with shock as cryptocurrencies that had begun to stabilise after months of a bearish run suddenly slumped in red. While we wait for price stability and even possibly new ATHs, on this edition of the crypto scoop, we will be reviewing:

  • Major sell-offs that resulted in a dip in the global crypto market cap
  • Luna's funding that places it among the top 10 cryptocurrencies
  • Countries working towards adopting bitcoin as a legal tender
  • South Africa's crypto regulatory framework.

Bitcoin's price chart (Source: Coinmarketcap)

BTC, ETH, and Several Cryptocurrencies Drown in Red Following Major Sell Offs

During the week, the total cryptocurrency market cap fell to $1.58 trillion, its lowest since August. According to CoinGecko, the top cryptocurrencies have been trading in the red, with Bitcoin trading as low as US$34,958, and Ethereum plunging to US$2,382

 The crypto market decline is being attributed to Russia invading Ukraine's borders before daybreak on February 24. Russian President Vladimir Putin had declared a "special military operation" for the "demilitarization and de-Nazification of Ukraine before invading Ukraine borders. 

Speaking on the sell-offs that followed after the invasion, Bitcoin proponent James Lavish told his 18,000 Twitter followers: “If you’re selling bitcoin here because of fears of war and civil unrest, you have absolutely no idea what you own and why it is so vitally important for the world at this very moment.” 

Crypto enthusiasts are on the edge of their seats as cryptocurrencies begin to stabilize, wondering what impact this will have on the crypto space.

Luna (Source: Watcher News)

LUNA Secures its Position as one of the Top Ten Cryptocurrencies by Market Cap.

Following the announcement of a fund raising, Terra's native coin, LUNA, is up over 14% with a 24-hour trading volume of $2.3 billion. Luna Foundation Guard (LFG) successfully completed an over-the-counter sale of LUNA for $1 billion, with Jump Crypto and Three Arrows Capital leading the raise.  

LFG is a non-profit organization founded in January to assist the Terra ecosystem's growth as well as the long-term viability and stability of its algorithmic stablecoins. According to Terra's announcement on Twitter, the $1 billion received would be used to create a decentralized UST Forex reserve denominated in Bitcoin. 

LFG is a non-profit organization that was formed in January to help support the growth of the Terra ecosystem, and the sustainability and stability of its algorithmic stablecoins. The $1 billion raised in a recent private sale will go towards forming a decentralized UST Forex reserve denominated in Bitcoin, according to Terra’s announcement on Twitter. In the event of a major selloff, a Bitcoin-denominated reserve for Terra's largest stablecoin will help keep the price of UST stable.

With a market cap of $12.25 billion, LUNA has firmly established itself as one of the top cryptocurrencies by market capitalization and the fourth largest decentralized stablecoin.

California lawmaker proposes a bill that will make bitcoin a legal tender

Senator Sydney Kamlager of California recently filed a bill to allow residents to pay for state services with cryptocurrencies. While the crypto community jubilated over this crypto adoption initiative, former California State Assembly Majority Leader Ian C. Calderon revealed that he's working on developing a new proposal with Bitcoin advocate Dennis Porter to make bitcoin a legal tender. 

Arizona Senator Wendy Rogers declared on Tuesday that she intends to make Arizona the most crypto-friendly state in the country, as she proposes two more crypto bills.  Rogers had previously introduced a bill last Friday that would make bitcoin legal tender in Arizona.

Indira Kempis, a Mexican senator, is also working on a bill that would make Bitcoin a legal tender in Mexico. The bill is anticipated to be introduced to the Mexican Congress later this year, in April and will be modelled after El Salvador's Bitcoin law. Senator Kempis believes that the asset's adoption might be a catalyst for the country's global financial inclusion.

It's always uplifting to see countries recognise the potential of cryptocurrency and take steps to make it more accessible to their citizens.

South Africa Announces Plans to Regulate Cryptocurrencies

The South African National Treasury has expressed intentions to further regulate the crypto-mining sector and crypto-assets. Treasury said in its Budget Review released on Wednesday (February 23) that it is looking into ways to control electricity-intensive crypto mining, which is hazardous to the environment. It also stated that it intends to publish a paper addressing the concerns posed by so-called "stablecoins." 

In June 2021, South Africa's Intergovernmental Fintech Working Group (IFWG) presented a position paper on crypto assets, outlining a coordinated and phased approach to crypto asset regulation in the country. Treasury officials noted that regulatory agencies are working on a number of measures based on the paper's suggestions. 

Treasury officials noted that regulatory agencies are working on a number of measures based on the paper's suggestions. This includes, for example, the Financial Intelligence Centre Act's recognition of crypto asset service providers as accountable institutions. This modification would address concerns about money laundering and terror financing using crypto assets, while also aligning the act with the FATF's requirements for virtual assets and related service providers.

The study also suggests that crypto assets be classified as a financial product under the Financial Advisory and Intermediary Services Act, which would protect consumers. This project is expected to be completed in 2022. The project findings are expected to be released in April 2022.

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