In the War between Russia and Ukraine, Food Is More Precious than Bitcoin and Gold

Alexander Salazar
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In the War between Russia and Ukraine, Food Is More Precious than Bitcoin and Gold

More than 50% of the sunflower oil consumed by people worldwide comes from Russia and Ukraine. There will be high prices and shortages due to lower food production in those two countries.

The invasion of Ukraine by Russia has accelerated the inflation process brewing since the declaration of the COVID-19 pandemic in 2020. The consequences of that debacle can affect food availability and the interest in Bitcoin worldwide.

The monetary expansion policy implemented in the United States in 2020 contributed to triggering the inflation process. That situation became more evident in December 2021 and has worsened by new record figures since February 2022.

The US Federal Reserve (Fed) discussed a transitional increase in inflation in 2021. However, the monthly report on the rise in the consumer price index (CPI) of January 2022 revealed an annual 7% increase in inflation in December.

The CPI reports for February and March 2022 revealed that the inflation record had increased. Behind the monthly figure reflecting an average, inflation is much higher concerning essential items like food and energy.

The policy to create inorganic money of the Fed contributed to increasing the number of US dollars banknotes in 2020 and 2021. In late 2021, the amount of money in circulation, including cash and certificates of deposit, grew by 41%.

The increase in inflation raised expectations that Bitcoin could be one of the highest beneficiaries. However, if the conflict worsens, many people will likely not view the crypto asset as their top priority.

There Could Be a Food Crisis Due to the War

Billionaire Andrei Melnichenko, a figure in the Russian fertilizer industry, said agriculture and food were casualties of this war. He added that the Eurasian country is a leading producer of phosphate and nitrogen, among other components of fertilizers.

Melnichenko stated that the war between Russia and Ukraine has caused the prices of fertilizers to increase rapidly. He considers that that will lead to further inflation in Europe and food shortages in the poorest countries.

The Food and Agriculture Organization (FAO) of the United Nations recently warned about the risks from the current conflict. He explained that Russia and Ukraine are among the leading producers of agricultural products worldwide.

Russia and Ukraine are among the leading exporters of wheat, corn, seeds, and sunflower oil. Since the Eurasian nation is the second-largest exporter of fertilizers worldwide, the conflict might lead to higher prices.

Significant increases in international prices led Argentina, a traditionally agricultural country, to shortages of oils, flour, and derivatives after the conflict in Ukraine started.

The current inflation and the likely escalation of the war in Eastern Europe might interrupt the supply of essential food products. That situation would also affect Europe, the Middle East, Asia, and Africa.

During a Food Crisis, the Priority of Bitcoin is Lower

Undoubtedly, Bitcoin has served as a store of value in countries with unstable economic situations. For example, Venezuelans have used the crypto asset to protect family income from hyperinflation.

However, the priorities change for ordinary citizens in severe food shortages. They will no longer be as interested in Bitcoin as investors, entrepreneurs, and those with access to capital.

People will buy and store flour and oil, among other non-perishable foods, above other goods. Investments in assets like Bitcoin would not have a place, as it is crucial to the behavior of the market in the coming months.

By Alexander Salazar

A Report Revealed that Strategic investments Executed by Coinbase Could Bring Satisfactory Dividends in the Future

Jenson Nunez
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A Report Revealed that Strategic investments Executed by Coinbase Could Bring Satisfactory Dividends in the Future

The report revealed by an Oppenheimer analyst highlights that certain Coinbase investments would perform in optimal ways if conditions are favorable. This performance could have an extraordinary impact on the value of the company’s shares.

Owen Lau, the research analyst for the Oppenheimer firm, revealed that Coinbase counts on particular hidden securities, which, although they do not derive significant numbers as profits for the company right now, pose as strategic holdings with a considerable performance in the future.

The information revealed by Lau de Oppenheimer got included in a note addressed to the firm’s clients, in which he highlighted the current role that Coinbase registered through its investment management, Coinbase Ventures, whose investment portfolio might get valued at US$6.6 billion.

Highlighting some relevant data, Lau revealed that Coinbase Ventures invested capital in more than 250 companies until the end of 2021. They all have a book value of at least USD 352 million, some of them being from the Blockchain and cryptocurrency sector.

Lau said a sensitivity analysis revealed that market value could reach as high as $16 billion, assuming a 13% ownership stake. Given the influx of capital into digital assets/Blockchain, these predictions have upside potential.

Regarding Coinbase Shares on the Exchange

Regarding the projections for the shares of Coinbase in the stock market (COIN), Oppenheimer figures a target price of around USD 370 in short/medium term in the best-case scenario, in case everything goes as expected.

However, Lau discussed that their price would receive direct influence by the price of Bitcoin and the macroeconomic aspects that move the current market.

Since Coinbase’s shares appeared on the stock market, they crumbled down 39%, with trades figured at slightly above USD 150 per unit.

When the appearance happened in April 2021, shares fluctuated around USD 342 on NASDAQ, and since then, they have been decaying except for a figure seen in November of that same year.

Since Coinbase went public, expectations have grown among other entities in the crypto environment, pushing them to do something similar. In this sense, Kraken and Binance’s intentions in the US stand out; these companies also expressed purposes of listing their shares on the stock markets.

For outside investors, buying shares in Coinbase was a potentially less risky method to take advantage of the digital currency activity in the market than investing directly in a currency like or another digital asset, a behavior that alerted the regulators.

By: Jenson Nuñez

More than 100 Bitcoin Mining Farms got Taken Apart in Kazakhstan

Jenson Nunez
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More than 100 Bitcoin Mining Farms got Taken Apart in Kazakhstan

Some 55 legal mining farms decided to suspend their activities, and 51 illegal ones got dismantled; the Bitcoin hash rate marked above 200 EH/s on March 14, 2022.

At least 106 Bitcoin (BTC) mining farms suspended their activities in Kazakhstan, which appears to be a state coup against the crypto environment developing significantly in that nation, although without significant impact. The government audited the mining farms due to the lack of energetic sources the Asian country is experiencing and confiscated many pieces of equipment.

In a press release made by the Kazakh financial agency, they highlight that at least 51mining farms voluntarily stopped their activities. Other farms, 55 to be exact, got subsequently dismantled.

The crusade against Bitcoin miners came directly from the President of Kazakhstan, the Financial Supervisory Agency, and other entities linked to the current administration; they described crypto mining farms’ situation as rigorous inspections.

According to the government, the plants that went to suspend mining activities completely stopped every activity, dismantled the equipment, and detached it from the sites.

Regarding those devices taken apart by government entities, they clarified that they were carrying out their activities without notifying the authorized entity. Also, they illegally used energy sources without the required conditions to carry out the activity. They got located in the sector related to special economic zones and also managed to circumvent taxes and customs duties.

Equipment Brought Illegally

The audit discovered that Bitcoin miners came from China, South Korea, Singapore, Turkey, and Georgia. As they highlighted, it got brought Illegally from those nations.

The audit also pointrf out the particular case of the city of Almaty, where more than a thousand Bitcoin miners arrived directly from China and got valued at 2.8 billion tenges each ($5,400).

The government agency detected at least 25 criminal cases against the miners and managed to confiscate around 67,000 pieces of mining equipment, which got valued at 100 billion tenges.

The government alleged that the procedures help not only to curb the growth of electricity consumption but also to free up energy capabilities in a considerable scale. However, the administration expressed that illegal mining has increased, posing certain risks and threats to the country’s economic security.

Hashrate Over 200 EH/s

The dismantling in Kazakhstan arrived when the network processing rate (hash rate) got positioned over 200 EH/s. In data given by Glassnode, the estimated hash rate of Bitcoin was at least 209.47 EH/s during March 14, 2022.

Even when there has been no recent record of a drop in hash rate, it is still a possible rate. This information considers that Kazakhstan has received a significant part of miners since China’s ban, reaching 18% of the global hash rate. Although later, his administration turned against them, suspending services like access to electricity.

Those restrictive actions forced the miners to look for new places to mine crypto, areas like Russia or northern Kazakhstan, the predilect regions to carry out these activities. According to the Cambridge University mining map, that country gathers 11% of the global hash rate. Even after acknowledging that the Russian nation is currently facing a conflict with Ukraine, the figure still has the exact numbers.

By: Jenson Nuñez

Bitcoin Well-Positioned to Help Governments Create Cheaper CBDCs: Deloitte

Audy Castañeda
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Bitcoin Well-Positioned to Help Governments Create Cheaper CBDCs: Deloitte

Deloitte’s analysis shows how Bitcoin can help traditional fiat currency dramatically improve in terms of speed, security, efficiency, and cross-border payments.

A new study from financial services giant Deloitte highlights the potential of Bitcoin (BTC) as a foundation for creating a cheaper, faster, and more secure ecosystem for electronic fiat currency or central bank digital currency (CBDC).

Deloitte’s analysis, titled State-Sponsored Cryptocurrency, pointed to the need for a complete redesign of the traditional fiat ecosystem to overcome looming problems of being “slow, error-prone and expensive relative to performance in other high-tech industries.”

However, the report points to five key areas where Bitcoin can help traditional fiat currency dramatically improve, such as speed, security, efficiency, cross-border payments, and collaboration with other payment participants. According to the report, this is possible “With the potential […] to do it without the daily operational need for a centralized organization, be it commercial or federal, the result could be truly transformational.”

Main Inflationary Features of Fiat Currency

While unveiling the various differences between BTC and state-issued CBDCs, Deloitte’s analysis reiterates one of the main inflationary features of fiat currency, stating that CBDCs do not have a limit to the money supply contained on the ledger and that centralized governments can define the value of the CBDC.

According to the analysis, governments that are the first to implement a CBDC at the national level will have a head start in influencing the use of their local currency in international markets and operations.

In an environment with a CBDC, Deloitte envisions cryptocurrency exchanges maintaining their current position as facilitators to be used in converting “users’ cryptocurrencies into paper currency when transacting between different currencies, and charging an exchange fee in return. In such a scenario, banks will act as custodians of the distributed ledger who will compete with other miners to process the transactions and collect the reward.

Some Conclusions

Finally, the analysis states that, although CBDCs will not serve as the only substitute for BTC and other cryptocurrencies, the greater adoption of them will open an additional option for users to choose the most appropriate means of payment. The analysis concludes that, “[Bitcoin] could ultimately spawn a series of new opportunities that would […] transform the current payments system into one that is faster, more secure, and less expensive to run.”

Although many jurisdictions have joined the race to implement in-house CBDCs, one of the key factors for their success is mass adoption. As an example, it is worth mentioning the case of Jamaica.

In this effort, Jamaican Prime Minister Andrew Holness announced that the first 100,000 Jamaican citizens to use the country’s CBDC, Jam-Dex, would receive a free $16 payment in the hopes of promoting the adoption of the currency.

As Cointelegraph reported, approximately 17% of the Jamaican population remains unbanked, and with the launch of the CBDC, the government plans to encourage low- and middle-income citizens to integrate into the national banking system.

By Audy Castaneda

Biden Executive Order Promises Big Things for the Crypto Industry, Eventually

Audy Castañeda
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Biden Executive Order Promises Big Things for the Crypto Industry, Eventually

An avalanche of investigations and reports is the first step towards a coherent cryptocurrency policy, while the action is left for months or years to come.

The President of the United States, Joe Biden, signed on March 9 the Executive Order (EO) to Ensure the Responsible Development of Digital Assets. The order, expected for several months, provided the industry ample time to build up uneasiness. However, once they made the executive order public, there was a chorus of approval.

“I was expecting certain things and the positive tone wasn’t necessarily one of them,” TRM Labs’ head of legal and government affairs Ari Redborn said of the order. Cryptocurrency advocacy group Coin Center CEO Jerry Brito tweeted that the EO is “further assertion that when serious officials take a sober look at cryptocurrencies, the reaction is not to turn your hair on, but to recognize them as an innovation that the United States will want to encourage.”

Among lawmakers who supported him, Republican “crypto senator”, Cynthia Loomis of Wyoming said in a statement, “It’s great to see the Biden administration’s growing interest in digital assets.”

The EO acknowledges the place of digital assets in national and global economies, noting that non-state digital assets have increased in market capitalization from $14 billion in November 2016, to $3 trillion five years later. Rapid development and inconsistent controls “require an evolution and alignment of the US government’s approach to digital assets,” it continues. The EO sets policy goals related to consumer protection, financial stability, illicit finance, and national security, America’s leadership, services for the under-banked or unbanked, and responsible development.

Getting their Act Together

The EO does not specify any regulatory action. Rather, it outlines an interagency process that will involve 16 senior officials, including several cabinet members, with the possibility of independent regulatory agencies also taking part. The first duty will be to produce an elaborate series of reports, with a variety of supplements and annexes, at intervals ranging from 90 days to well over a year from the publication of the EO. Assistant to the President for National Security Affairs Jake Sullivan and Assistant to the President for Economic Policy Brian Deese will coordinate the interagency process.

The complexity of EO as project management should not be underestimated. Former FDIC Associate Director Alexandra Barrage, now a partner at Davis Wright Tremaine LLP, told Cointelegraph that the interagency process is “a testament to the fact that digital assets cross so many issues that there is no single agency that can address them.” The reports and recommendations will build on each other, Barrage said and will require quality control oversight. “You don’t want 20 different opinions that don’t agree,” he said.

Once reporting is complete, implementation of the administration’s policy goals will remain a goal. The EO “has very well-balanced, very intentional language,” Oleg Elkhunovich, a partner at Susman Godfrey LLP, told Cointelegraph, and is “well thought out and compelling.” However, the final impact of the EO is “an unknown factor”.

“Most of the industry is asking for rules,” Elkhunovich said because the absence of actively enforced regulation makes innovation risky. EO also marks the end of the perception of cryptocurrencies as the Wild West. “It’s a $3 trillion market,” Elkhunovich said. “You can’t have that.”

Consistent, loophole-free regulation “is certainly the ideal goal,” Peter Hardy, co-leader of Ballard Spahr LLP’s anti-money laundering team, told Cointelegraph by email, but that goal “will be elusive in practice, especially considering the constant and rapid changes in technology, which means regulations will have to be constantly running around just trying to keep up.”

“Just knowing with any certainty whether you’re regulated by the SEC, or the CFTC, or FinCEN, or some combination thereof – and if so, exactly how – would be extremely valuable,” Hardy added.

Before crypto companies know which agencies will regulate them, there is a lot to sort out behind the scenes. The EO mentions seven regulatory agencies by name, some of which have already vied for power.

Green Energy and Digital Dollars

One of the EO-mandated reports will address the environmental issues associated with Blockchain technology. In addition, it will focus on how it can “impede or advance efforts to address climate change.” The administrator of the Environmental Protection Agency (EPA), among other officials, will participate in this report. The EPA has significantly increased its regulatory activities under the Biden administration, and its efforts have already begun to affect the cryptocurrency mining industry and its energy sources.

Long Process Ahead

The schedule for the work is after the mid-term elections, so there is no clue about in which legislative environment it will appear. There is no doubt that the legislative proposal will be only the first step in a long process.

“This definitely shows that the United States is (finally) thinking strategically about the impact of cryptocurrencies on financial innovation and competitiveness,” David Carlisle, director of policy and regulatory affairs at Blockchain security firm Elliptic, wrote on LinkedIn. “While it is not yet a foregone conclusion that a digital dollar will happen […] this signals that the United States is taking seriously the risk that it could lose its competitive edge as crypto innovation continues and countries like China develop and launch CBDCs.”

The interval before regulation begins will not necessarily be lost time for the industry. Coordinators Sullivan and Deese promise that they are “committed to working with allies, partners, and the wider digital asset community.”

By Audy Castaneda

Three Reasons Why Ethereum Price can Still Retest $3K this Month

Audy Castañeda
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Three Reasons Why Ethereum Price can Still Retest $3K this Month

A combination of technical, fundamental, and on-chain indicators shows that the price of ETH could rise further as the first quarter winds down.

Ethereum’s native token, Ether (ETH), could hit $3,000 in March, supported by a mix of short-term technical, fundamental, and on-chain catalysts.

ETH price paints a “Symmetrical Triangle”

Ironically, the first tentative bullish outlook for Ether comes from a bearish continuation pattern.

Notably, ETH’s more than 50% drop from its all-time high of around $4,650 on Dec 2, 2021, followed by the formation of a consolidation channel called the symmetrical triangle. Therefore, the Ethereum token has been fluctuating between a descending upper trend line and an ascending lower trend line since the beginning of this year.

The ETH/USD pair last retested the lower trend line of the triangle as support on Mar 14 near $2,500, following a sharp correction after finding sellers near the 20-day EMA. 20 days; the green wave in the chart above).

Since then, the price of ETH has rallied as much as 9.26%, closing above the 20-day EMA resistance on March 16 to reach almost $2,750.

A decisive bounce move, accompanied by a surge in trading volumes, could see Ether eye the upper trend line of the triangle as its next upside target near $3,000.

The Merge

On March 15, Ethereum developer Tim Beiko announced that he had successfully tested “Combination” on the Kiln testnet, sparking speculation that the protocol would completely switch from proof-of-work to proof-of-stake as of the second quarter of 2022.

The euphoria around the merge has acted as one of the main bullish prospects behind the growth of Ethereum since the introduction of its first consensus layer updates in December 2020.

Arcane Research noted in its latest weekly report that a total of 312,000 validators staked 10 million ETH on the merge smart contacts, also called Ethereum 2.0.

That equates to nearly $26 billion worth of Ether, more than 8% of its total circulating supply, now locked up. The prospects of more Ether going out of circulation, coupled with hopes of increased demand, have pushed its price up nearly 360% from its December 2020 low of around $525 year to date.

Lito Coen, founder of Crypto Testers, a product comparison platform, anticipates that the launch of the merge will reduce Ethereum’s daily issuance rate from 12,000 ETH per day to 1,280, noting that the “annual inflation of the network will drop from 4.3 % to 0.43%”: equivalent to three Bitcoin halvings.”

“And,” according to Cohen, “the 0.4% inflation figure is without taking into account the automatic ETH burn introduced by EIP-1559 ($5 billion burned since launch), taking into account the ETH burn, Ethereum will be deflationary.”

Positive Divergence between Earnings and Prices

A bullish divergence is also emerging between Ethereum’s daily active addresses (DAAs) and the price of ETH, according to data from analytics platform Santiment.

In particular, Ethereum’s DAA fell, but not as much as prices, which have fallen by around 35% in the last four months. That indicated that users continued to interact with the Ethereum network for reasons beyond speculation and trading.

“The divergence of ETH active directions remains in the area where prices historically rise,” Santiment noted.

“This is a vote of confidence in Ethereum and a statement that it is here to stay (and grow),” said Michael Pearl, COO of decentralized app developer Kirobo, adding that its growth in the decentralized finance space would increase the ETH price even beyond $3,000.

By Audy Castaneda

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