Crypto Market Shines Amid Regulatory Gloom 💵

Good morning Switchers,

We begin this Monday morning with a big announcement: Switch Daily is now Switch Weekly. Moving from a daily cycle to a weekly one will allow us the opportunity to provide you, our dear readers, with a more comprehensive picture of the crypto market. We hope to make your news feed more insightful and much more detailed.

Your weekly market roundup

Crypto markets surprise with a huge price surge, even as strict US regulatory actions continue to play out

In what can be described as a "surprise rally" even amid increasing regulatory gloom in the US, crypto markets witnessed a sharp surge in prices last week. US consumer data suggested that sentiment remained strong, signaling a likely soft landing, triggering a rally across "risk-on" assets.

However, the rally has sustained spectacularly in crypto prices, sending overall crypto market cap close to $1.2 trillion, with BTC rising by 9% (trading at $25k) and ETH by 5% (trading over $1.7k), over the course of the last week! Traders are describing this as a "short squeeze" playing out, as the markets were in "oversold" territory due to the regulatory moves by the SEC.

SEC Chair Gary Gensler slapped a $30 million fine on Kraken and asked them to halt their staking-as-a-service offering, deeming it a security. Further, the SEC chief announced new custodial rules and directions for crypto assets, which would add further regulatory hurdles for crypto companies operating in the US.

Globally however, the regulatory stance has been in stark contrast to the US, with Dubai's dedicated crypto regulator VARA launching their framework and Hong Kong saw the launch of Interactive Brokers' regulated BTC and ETH trading venue!

BTC is leading the rally for the entire market, and its rising tide has lifted all boats (read tokens) with it. Bitcoin’s market cap dominance is now close to 40%.

In token-specific action, with the SEC's crackdown on staking services, there's an increased interest in decentralized liquid staking protocols like Lido DAO and RocketPool, which saw a steep increase in prices for LDO (up 12.5%) and RPL (up 20%).

Hedera Hashgraph's announcement of its partnership with Dell added fuel to the rally in HBAR token prices. Polygon's MATIC too has continued its upward trend (rising more than 21% over the week) as it becomes the protocol of choice for institutional offerings, including Siemens corporate bond announcement last week.

Hot off the press: Market developments in the news

News is one of the major drivers of the crypto ecosystem. Catch up on all the developments in the space with our quick takes on the latest developments.

🚫Paxos ordered to stop issuing BUSD

The New York Department of Financial Services (NYDFS) has asked crypto company Paxos to stop minting and issuing stablecoin BUSD. The news comes soon after the US SEC asked another crypto exchange, Kraken, to halt staking services. A stablecoin ban could halt crypto market growth because they are a popular on-ramp for users taking their first steps into crypto. The regulatory crackdown on BUSD led Tether’s market cap to grow by nearly $1 billion. Tether’s latest gains bring its stablecoin market dominance to 51.3%. (Source: Coindesk)

💰Abu Dhabi announces $2B Web 3.0 fund

Hub71, Abu Dhabi’s technology ecosystem, announced a new initiative called Hub71+Digital Assets on Wednesday. Backed by capital amounting to $2B, the initiative extends financial support to unicorn-stage startups. The goal is to advance Web 3.0-based innovations, such as blockchain and metaverse applications. The move is part of the efforts to establish the UAE as a Web 3.0 leader. (Source: Coindesk)

🙌Crypto scam revenue fell in 2022: Report

The crypto bear market fended off scams in 2022. Crypto scam revenue fell by almost half in 2022 due to falling crypto prices. A February report from Chainalysis said the lower crypto prices in a bear market led to a fall in scam revenue. The report includes investment, NFT, and romance scams, which amounted to $5.9 billion in the year, down 46% from 2021. As per the report, 82.1% of all stolen funds were taken DeFi protocol through cross-chain bridges. (Source: Coindesk)

〽️ETH supply declined post-Merge: Data  

Ethereum has seen a constant decline in exchange supply over the past six months post-Merge, according to data from Santiment. Since the Merge, there have been 37% less ETH on exchanges making the amount of ETH available to trade lesser. Just weeks before the Shanghai upgrade, the decline in supply on exchanges is considered a bullish sign, as there is less ETH available to trade or sell. (Source: Cointelegraph)

On-chain activity

In the months leading to The Merge, ETH adoption increased significantly, and the ETH owner base has more than doubled in the last six months of 2022. Also, ETH’s circulating supply has become flat and has been around 120.5 million in the last six months, helping it to earn the deflationary tag.

Of the total circulating supply of 120.5 million tokens, 16.7M ETH tokens are staked on the Beacon Chain, according to data from Etherscan.io.

Chart of the week: SOL

In the last seven days, SOL has gained more than 25%, rising higher from its strong support level at ₹1,815 level to its next resistance at ₹2,060 level. In today’s session, if SOL gives a clear breakout above the ₹2,050 level with strong volume, it could reach higher towards the ₹2,880 level over the next few days—if the market conditions remain favorable.

The RSI is also rising, and the 50 EMA line is rising as well, providing strong support to SOL beneath, indicating that momentum is positive in the short term.

If you are new to charts, read our beginner’s guide to TradingView charts.

Coin of the week: DOT

• This week DOT showcased significant strength among the top cryptos. The coin has broken above the resistive ₹580 level and is currently trading close to ₹620 level. DOT has posted gains of more than 70% since the start of the year.

• The buzz around the token is primarily because of the upcoming protocol upgrades to boost network functionality and security. Further, Polkadot is aiming to increase the active validator number to 500, which will make Polkadot a highly responsive and functional blockchain network. The current validator count is 297.

• Messari’s State of Polkadot Q4 2022 report shows that active daily accounts and new accounts increased by 64% and 49%, respectively.

Thanks for sticking around!

See you later, folks.

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