Americans believe in cryptocurrencies despite SEC crackdowns
Americans remain positive about the future of cryptocurrency, despite market volatility and tighter oversight from U.S. regulators. This is according to the results of a survey by Stablecoin issuer Paxos.
The online survey was conducted between January 5 and 6 and published on March 7. Analysts wanted to find out how crypto winter and market turmoil in 2022 affected the behavior and sentiment of crypto investors. The study surveyed 5,000 U.S. residents over the age of 18 who earn $50,000 or more a year and have bought cryptocurrency at least once in the past three years.
“From some of the highest bitcoin prices in history to the lowest large-scale industry implications from the likes of Terra, FTX, Alameda Research and others, it has been a volatile and potentially testing year for the ecosystem,” the analysts said, referring to the situation in the crypto market last year.
As a result, the analysts found that 75% of respondents were still “confident or somewhat confident about the future of cryptocurrency.” Another 72% of respondents were “slightly or not at all concerned” about the volatility of the crypto market last year. At the same time, market turmoil has not affected Americans’ interest in digital assets – about a third of respondents have purchased cryptocurrency for the first time in the past 12 months.
Speaking of motivation for buying cryptocurrency, owning it as a long-term investment received the highest rating at 52% and day trading at 36%. Nevertheless, the main usage options scored well, such as using cryptocurrency to pay (42%), getting cryptocurrency for loyalty (38%) and sending money to friends and family (34%).
Also, 45% of respondents said they would invest more in cryptocurrency if banks and other financial institutions used it more, and 40% of respondents said they would invest more if more merchants accepted cryptocurrency as a means of payment.
Stablecoin issuers themselves are going through a tough time with the U.S. cryptocurrency situation. Last month, the New York Financial Services Department (NYDFS) launched an investigation into Paxos. Days later, the issuer announced it would stop issuing Binance USD (BUSD) “stablecoins” from cryptocurrency exchange Binance amid complaints from the Securities and Exchange Commission (SEC).
Earlier, we reported that the Bitcoin price (BTC) is in a “transitional phase”.
Cryptotraders lost more than $250,000,000 in liquidations after Fed rate hike
Cryptotraders had a tough day: almost 68,000 positions were liquidated on exchanges in the last 24 hours, and the total volume of liquidations exceeded $257,000,000. All this happened against the news of the US Federal Reserve’s rate hike and another Securities and Exchange Commission regulatory action against cryptocurrencies.
Cryptotraders lost $132,000,000 in BTC
Bitcoin, Ethereum, and Ripple were the leaders in the number of forcibly closed positions. BTC liquidations totaled almost $132,000,000; Ethereum traders lost $51,000,000. XRP positions accounted for about $8,000,000 of liquidations. Bitmex exchange executed the largest order of $7.39,000,000.
Cryptocurrency market capitalization has declined 2% in the last 24 hours, but is still above the $1 trillion mark.
The weekly CoinShares report also recorded a massive outflow of funds for six consecutive weeks. During that period, nearly $500,000,000 was withdrawn from cryptocurrency platforms, with $113,000,000 coming from bitcoin. Analysts at the company believe the outflow is due to liquidity needs during the banking crisis rather than a negative outlook. The company mentions that a similar scenario was seen in March 2020 amid a COVID-19-induced panic.
Regulators continue to hunt the cryptobusiness
Another reason for the increased volatility in the market has been harsh action from U.S. regulators. Last night it became known that the U.S. Securities and Exchange Commission sued cryptomagnate Justin Sun, accusing him of fraud and market manipulation.
The SEC also issued a notice of wrongdoing against Coinbase, the largest U.S. cryptocurrency exchange. The securities regulator sued Coinbase Global Inc, for some of the products it offers.
We previously reported that Bitcoin (BTC) tests $28,000, but onchain metrics urge caution.
Binance was caught circumventing KYC to register Chinese clients
Employees of the cryptocurrency exchange Binance help clients from China to bypass compliance and verification. CNBC writes about it, citing hundreds of corporate emails from exchange employees on Discord and Telegram. It is reported that Binance has helped over 200,000 users register, bypassing its own security system. One case describes correspondence between a user from China and a Binance employee.
The employee under the pseudonym yaya.z suggested the user from China turn on a VPN, register as a Taiwanese resident and then return the location to China. Binance employees also advise customers not to use VPN services from the U.S., Hong Kong and Singapore, because the exchange does not provide services in those regions, writes CNBC. At the same time, Binance freely processes applications from U.S. email providers like Gmail or Outlook for registration.
The exchange even offers specialized mobile applications for customers from China. A CNBC reporter could download a special mobile application from Binance via email. At the same time, no VPN was needed to download the app, as the download was conducted through the domain of binance[.]com. It is also alleged that the exchange still verifies users with Chinese phone numbers.
An exchange spokesperson denied the existence of a special Chinese version of the mobile application. The exchange also added that it has improved the system to identify users from banned regions. CNBC notes that after providing evidence, Binance removed employee messages from corporate chats to circumvent KYC.
We previously reported that the Ethereum (ETH) price crossed the $1,800 mark, opening the way to $2,000.
Why cryptoanalysts expect bitcoin to fall
The market remains in a bearish trend and bitcoin (BTC) will resume its fall and test $16,000. There are two reasons:
The first statement can be confirmed or disproved by a technical analysis of the cryptocurrency market, but there is not enough additional information for the second.
The market capitalization of altcoins (ALTCAP) does hold nearly $605 billion of resistance. Although ALTCAP has risen above it several times, it didn’t develop above this area.
However, the daily RSI has broken through the bearish divergence trendline (green line). Such a breakout often precedes significant reversals into a bullish trendline. As a result, ALTCAP will move higher towards the $680B resistance area. If not, ALTCAP could fall back to the $518B support area.
There are also those who argue that bitcoin will test the $10000-$11000 area because there is a CME price gap that needs to be filled. The gap refers to the difference between the closing price of bitcoin futures on the Chicago Mercantile Exchange (CME) on Friday and the opening price on the following Monday.
We previously reported that Hong Kong has allocated another $50,000,000 to the crypto industry.
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