Cryptocurrencies Are an Innovation Comparable to the Internet, According to Wells Fargo

Alexander Salazar
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Cryptocurrencies Are an Innovation Comparable to the Internet, According to Wells Fargo

The company shows the relevance of digital assets by comparing them to inventions like the car, the Web, and electricity. Wells Fargo highlights that the crypto industry primarily focuses on technology, which has caused Web3 to lead to poor user experience.

In a recently published report entitled Understanding Cryptocurrencies, Well Fargo compares cryptocurrencies with other innovations.

The US financial institution referred to the term Internet of value, a concept widely used in the past. Helen Hai, Binance’s Head of Fan Tokens and NFTs, also mentioned it as a cornerstone of the focus on crypto. That makes sense when seeking to differentiate between Web2 and Web3.

Cryptocurrencies Are an Innovation on a Par with the Internet

The company shows the relevance of digital assets, which it bought with the relevance of inventions like the car, the Web, and electricity. Wells Fargo initially points out that Web3 will seem as bad for finance as the original internet was for communications.

However, they explain that cryptocurrencies offer new investment possibilities and opportunities not seen before. Wells Fargo also believes those assets would be the building blocks of a new internet.

Cryptocurrencies have gained relevance, causing the market to grow prematurely, which is positive due to significant adoption.

The institution says that the term Internet of Value begins to make a lot of sense. However, Wells Fargo also noted that this innovation still needs improvement. They explained that this creation requires an infrastructure for investors to trade digital assets effectively.

There Is a Dilemma Regarding New Crypto Users

Wells Fargo notes that the crypto industry primarily focuses on technology, its most significant trend. That situation has caused Web3 to lead to a poor user experience. New users have faced entry barriers that have made them leave due to negative impressions of the ecosystem.

Excessively technical knowledge of applications like tokens, fees, and blockchains, among others, is initially overwhelming.

The bank’s research department has written similar reports before, as they want to ensure that newcomers see the advantages of crypto assets.

The Conclusion about Crypto Assets of Wells Fargo

Wells Fargo’s findings emerged from contrasting inventions like the internet, electricity, and cryptocurrencies. However, some might view this as an attempt to compare very different types of fruits.

Despite the differences between pears and apples, the work of Wells Fargo was to find similarities. The report mentions payment processors, purchases, remittances, and other more advanced uses like the Bitcoin Lightning Network. Wells Fargo considers that early movers can take advantage of open network effects and gain economies of scale.

Wells Fargo adds that the primary risks faced by the industry are additional regulation and failures in technology and business. Besides, they believe there are operational risks with handling and storing crypto assets, price volatility, and limited consumer protection.

Meanwhile, Bitcoin is trading at around USD 24,259 and has accumulated a 3.3% over the last week. While its daily trading volume is above USD 19.82 billion, its market capitalization is about USD 461.83 billion, according to CoinGecko.

By Alexander Salazar

Celsius Withdraws Motion to Rehire Former CFO

Audy Castañeda
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Celsius Withdraws Motion to Rehire Former CFO

The hearing to review the rehiring was scheduled for today, August 8. Investors also took issue with the decision to rehire Bolger.

Celsius Network has withdrawn its motion to rehire former CFO Rod Bolger. The company had planned to hire him to help with the bankruptcy process.

Lending platform Celsius withdrew its motion to hire former CFO Rod Bolger, according to a court filing from the Southern District of New York.

The company had filed a motion to hire Bolger earlier this month, saying it needed his expertise to help navigate the bankruptcy process.

The withdrawal of the motion takes place just before the hearing scheduled for August 8. Celsius had planned to rehire Bolger at a salary of $92,000 a month for a minimum period of six weeks.

Bolger had resigned from the company, serving the eight-week notice period. He was the former CFO of the Royal Bank of Canada and divisions of Bank of America.

Investors also took issue with the decision to rehire Bolger. Lawyers for some investors objected, saying Celsius offered “little detail” about why his expertise was needed.

A lawyer said the decision “reflects a level of callous disregard for Celsius’ clients.”

Celsius Still Going through Tough Times

The history of Celsius has been one fraught with drama, and it has yet to have a strong grip on the world’s attention at large. Meanwhile, its clients face a gloomy outlook, as it may be years before they have access to their funds.

The collapse of Celsius has drawn a lot of attention to investor protection in the crypto industry. Deposits at US banks are insured by the Federal Deposit Insurance Corporation for up to $250,000, while brokerage accounts are covered for up to $500,000.

The company also recently faced a data breach, which added to its problems. Last July 28, it posted an alert on Twitter, in which they informed that they “were recently informed by our vendor http://Customer.io that one of their employees accessed a list of Celsius client email addresses held on their platform and transferred those to a third-party.”

On top of it, in mid-July, an Arkansas resident also filed a class action lawsuit against the company, for selling unregistered securities, comparing the crypto lender’s operations to a Ponzi scheme.

This series of incidents does not make things any easier for Celsius as it tries to get out of its financial crisis.

Other News: Voyager Plans to Resume Withdrawals

There have been some positive developments in the Voyager case, which should bring some relief to customers. The company announced in a blog post that it would resume withdrawals of up to $100,000 in a 24-hour period beginning August 11.

Voyager recently received the go-ahead to return $270 million to its customers. It also reportedly has multiple offers on the table and even received one from Alameda Research and FTX.

Lawyers for the firm said this offer was low and the company is open to “serious proposals.”

The Voyager case remains worthy of attention and will have an eye-opening effect on the way forward for the crypto market. Like Three Arrows Capital and Celsius Network, it will serve as a lesson to the many cryptocurrency companies out there.

By Audy Castaneda

Cryptoactives and a Pending Subject: the Regulation of Centralized Exchanges

Audy Castañeda
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Cryptoactives and a Pending Subject: the Regulation of Centralized Exchanges

For more than a decade, the crypto ecosystem has developed a growing number of financial products and operations. Although the system was originally imagined by its creators as totally decentralized and anonymous, the enormous interest it aroused around the planet led to the creation of exchanges that initially facilitated both the buying and selling, as well as the custody of these assets.

Although there are decentralized exchanges (Uniswap is perhaps the main example), and investors can hold or transfer their cryptocurrencies to their own anonymous wallets, current reality shows that most of the operations are carried out globally through centralized markets that guard these assets and operate in dozens of countries (Binance, Coinbase, Kraken can be mentioned as some of its main exponents).

In these markets, both institutional and retail investors buy and sell crypto assets using the so-called “fiat” currencies issued by central banks (dollars, euros, pesos, etc.), and can also exchange different cryptocurrencies with each other.

Most of the platforms not only offer their clients the possibility of trading and custody but also contemplate a wide range of financial operations, allowing for example to obtain returns on the holdings of these crypto assets.

Cryptomarkets under the Microscope

The universe of products that are traded in these markets can include both traditional cryptocurrencies (such as Bitcoin or ether), as well as so-called stablecoins linked to some type of asset such as the US dollar (such as USDC or Dai).

Other digital representations of assets called tokens are also traded, which can be fungible or non-fungible (NFT) mostly based on the so-called smart contracts, these platforms are also used to finance new projects through the so-called ICOs (initial coin offerings).

Given the novelty of the creation and operation of these crypto markets, different legal, regulatory, financial, and operational issues arise that are not clear and can be detrimental to unsuspecting investors.

To mention specifically one of the controversial edges of these centralized markets is the conformation of the prices of the assets that are traded.

Some of these platforms face potential conflicts of interest when they operate simultaneously as markets and intermediaries (market makers). Not necessarily the operations carried out by clients in an Exchange are transferred and specified at that price in the centralized book (Blockchain) corresponding to that cryptoactive.

The same crypto-asset can be traded at the same time and for a similar amount in different markets with different prices, sometimes with a significant width in the margins of said quotes. Just as an example, in Argentina there are online sites (e.g. cryptosaurio.com) where these price differentials between exchanges can be observed.

In the End… Sword of Damocles

Blockchain technology and the crypto ecosystem are a reality that will surely continue to develop in different fields and in a disorderly manner.

However, beyond the normative chaos that some controversial cases show (to the hubbub of lawyers and legal studies), the lack of a more or less clear regulatory framework constitutes a sword of Damocles, both for those who want to carry out the crypto business legitimately and for regulators who fail to protect less experienced investors, who participate in these markets without fully understanding the risks involved.

By Audy Castaneda

The Price of Bitcoin Might Reach USD 30,000 in the Short Term

Alexander Salazar
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The Price of Bitcoin Might Reach USD 30,000 in the Short Term

A healthy pullback would drive the price would rise to USD 30,000, allowing gains of 27% in the short term. A bearish weekly forecast is also possible due to little buying determination, taking Bitcoin toward USD 19,000.

After dropping slightly for several days, the price of Bitcoin (BTC) might resume the short-term bullish trend. That provides an optimistic forecast for the following seven days.

BTC is trading at around USD 24,259 and has accumulated a 3.3% over the last week. While its daily trading volume is above USD 19.82 billion, its market capitalization is about USD 461.83 billion, according to CoinGecko.

The Volatility in the Price Decreases as Bitcoin Whales Stay Put

Many expected the Fed’s decision and Powell’s comments to cause volatility and problems for Bitcoin. However, the price increased as nothing wrong happened, and the market had discounted the possibility of a rate hike.

BTC has recovered the realized price, a metric announcing the possible bottom of the bearish market whenever crossed.

However, the MVRV ratio indicator still indicates room for the price to continue dropping, comparing the current decline with previous bearish cycles.

The whales, who generally focus on the long term, remained motionless over the last week, evident from the low inflows on exchanges.

They might wait for a catalyst, which would define the direction in the short term, but the outlook is bullish.

The Weekly Forecast of the Bitcoin Price

The weekly chart shows that the price of BTC is undergoing a corrective process, which generates a bullish forecast.

The cryptocurrency dropped to USD 17,622 and had a significant buying volume that announced a possible bottom. However, the price has made a healthy and necessary pullback after a steady decline for several months.

The price would rise to the demand zone around USD 30,000, thanks to a healthy pullback. A rally to that price will allow BTC to make gains of around 27% in the short term.

Since buyers have little determination, a broader rally is at risk. That situation may cause the price to drop to USD 19,000 to pick up demand and move toward USD 30,000. However, if the following predictions come true, that might change in the next few hours/days.

The Bitcoin Price Remains Locked in a Rising Wedge

The little volatility in the price of Bitcoin recently formed a rising wedge figure, announcing a possible trend change.

Since it formed on the relevant support at USD 19,000, it might be announcing a respite. That would cause the accumulation of large clusters of orders that might make the price jump when crossing the resistance line.

However, there is also a possibility of a bearish weekly forecast, where little buying determination could cause the Bitcoin bears to take control. They would take the price toward USD 19,000 when it breaks through the ascending line enclosing the wedge around USD 23,800.

Factors like the depth of price drops, the need for a broader respite, and metrics announcing a possible bottom indicate a bullish scenario.

The behavior of the price of Bitcoin over the last week indicates the possibility of resuming the bullish trend.

By Alexander Salazar

Cryptocurrency ATMs Arrive at Spanish Airports

Audy Castañeda
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Cryptocurrency ATMs Arrive at Spanish Airports

Cryptocurrencies have long since ceased to be a science fiction currency to become a reality. In recent times, even influencers talk about them, although it is true that just this year they are experiencing their first major crisis. Experts say that the climate of global uncertainty is the main culprit in its collapse.

Despite everything, the commitment to them remains firm and now it is Aena, the Spanish public company that manages the airports, which has taken another step in this direction. It has authorized a Catalan startup to place Bitcoin ATMs at aerodromes.

Aena’s Permit Details

At the moment, the permit granted applies to four ATMs: two will be at Palma airport, and the others, at Elche and Ibiza. The company in charge of this operation is Bitbase, which is defined as the largest cryptocurrency firm in Spain, as it was the winner of a public contest that it called on July 20. It was the best rated.

The Catalan startup has 97 vending machines between Spain, Portugal, and Paraguay. And most of them are in shopping centers and stores dedicated to this business. In total, there are almost 39,000 ATMs of this type in the world: 87.9 are in the US, followed by Canada and Spain, according to the CoinATMRadar website. In Spain, there would be 217 machines.

It is worth remembering that Bitcoin remains the leading cryptocurrency by market capitalization. It was born in 2008 and was created by the Satoshi Nakamoto collective. It is the official currency in El Salvador and the Central African Republic.

Celebrities who Support Cryptocurrencies

Cryptocurrencies still seem like a shady business in the eyes of many people, although it is perfectly legal. In recent times there is a lot of distrust, a tension that has also affected celebrities who have turned to promote this business.

Names like Matt Damon, Reese Witherspoon, and Gwyneth Paltrow have lent their image in different promotional campaigns. The first, in fact, starred in a spot that was launched during one of the breaks of the last Super Bowl, the most watched sports show of the year in the US.

The fall in prices, however, has dragged them down and their star has lost its shine for many, who have begun to criticize these celebrities. The reaction has been mixed: Damon, for example, has chosen to remain silent and take a step back. He doesn’t talk about it at all. Witherspoon, for her part, has gone so far as to say that she spoke without knowing, come on, that she was poorly informed.

But the list of ‘celebrities’ is long: Cara Delevingne, Ellen DeGeneres, Snoop Dog, Elon Musk, Tom Brady, tennis player Naomi Osaka… In networks, they are the target of strong criticism that, in some cases, even affects their cache. And fellow professionals are also making a fool of them, like the comedian Larry David or the actor Keanu Reeves. The latter has unhesitatingly stated that digital assets “are a fraud!”

By Audy Castaneda

The US Congress Could Decide Whether the SEC or the CFTC Will Regulate Crypto Assets

Alexander Salazar
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The US Congress Could Decide Whether the SEC or the CFTC Will Regulate Crypto Assets

If the SEC and the CFTC do not solve their dispute internally, the US Congress would have to intervene. In 2014, when nobody knew Bitcoin yet but the digitization of the economy was starting, the CFTC asserted its jurisdiction over digital currencies.

According to a legislator working with Republican Senator Cynthia Lummis, Congress should intervene in the case of an unsolved jurisdictional dispute. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) disagree over who regulates cryptocurrencies in the United States.

The SEC is investigating Coinbase, which is only the beginning of the problem. According to that anonymous legislator, all US-based exchanges in the United States are under scrutiny. While more than 40 cryptocurrency exchanges operate in the country, Binance is subject to different investigation instances.

Congress will take action if the two agencies do not solve the dispute internally. If that happened, they could support the CFTC, which rejects what it defines as regulation through applying regulatory accounting. Despite a series of actions affirming the ability of the SEC to regulate cryptocurrencies, the CFTC does it by law.

The History behind the Regulation of Cryptocurrencies in the United States

In 2014, nobody knew Bitcoin yet, but the digitization of the economy was developing. That year, the CFTC asserted its jurisdiction over digital currencies before Ethereum, among other cryptocurrencies, emerged.

In 2018, a judgment of the US Federal Court affirmed that the CFTC has jurisdiction over them. The agency would be able to prosecute criminals in cases of fraud related to digital currencies, later called cryptocurrencies.

Although doing it wrong, the SEC has regulated cryptocurrencies and exchanges in the United States. The talks between the SEC and the CFTC have been ineffective, which could trigger the intervention of Congress.

A Bill Classifying BTC and ETH as Commodities Could Change Everything

Senators Debbie Stabenow from Michigan and John Boozman from Arkansas recently introduced the Digital Commodities Consumer Protection Act (DCCPA). If Congress passes that new bill, it could confirm the rights of the CFTC rights to regulate cryptocurrencies. The DCCPA would classify Bitcoin (BTC) and Ether (ETH) as digital commodities, not securities.

A recent statement by the president of the SEC, Gary Gensler, has made that classification as digital commodities relevant. The official said that he and his predecessors only consider those cryptocurrencies similar to Bitcoin to be commodities.

According to the Howey test, it is possible to determine whether a transaction constitutes an investment (security) contract. That means that an investment of money in an enterprise could generate profits derived from the efforts of others.

However, the above anonymous legislator of Senator Lummis thinks it has less than a 50% chance of approval. According to him, the bankruptcy of a leading US cryptocurrency exchange or other similar catastrophic events must occur.

Bitcoin is trading at around USD 22,978 and has accumulated a 2.8% loss over the last week. While its daily trading volume is above USD 13.62 billion, its market capitalization is about USD 439.23 billion, according to CoinGecko.

By Alexander Salazar

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