After months of continuous selling, we are finally testing what we hope will be the bottom of the crypto market selloff. One good sign is that on a rolling 7-day basis, 18 of the top 50 cryptocurrencies by market cap have had a positive price performance. (Hyperlink Coin Rankings)
Another sight for sore eyes is that both Bitcoin (BTC) +2.6% and Ethereum (ETH) +1.9% are in the list of coins that are positive this week. However, both of these market benchmarks are now in bearish phases and desperately need to bounce.
The top performers this week were actually the two largest Metaverse cryptocurrencies, Decentraland (MANA) +14.7% and Sandbox (SAND) +20.1%.
Clearly MANA and SAND are correlated with each other, but another important observation is that the metaverse cryptos are clearly still on a trend of their own, and somewhat independent from the rest of the market.
Another interesting note is that both of these top metaverse plays have actually remained profitable for those that bought into the initial Metaverse hype in the final days of October 2021.
With The Sandbox announcing a partnership with Warner Music Group this week to create a music-themed metaverse, it looks clear that after 1 month 2022 still seems to be the year of Metaverses.
Crypto did in fact spend plenty of time in the news this week, but not particularly because of any crazy price action.
There was news coming out of Russia’s Central Bank to begin the week in which they announced their intentions on banning the crypto/blockchain industry and specifically mining, only to be met with a direct statement from Vladmir Putin that Russia would regulate instead of ban.
There appears to be a disconnect between Russia’s government and Central Bank, but we can assume that Putin’s word will be law when it comes to regulating cryptocurrency activities in Russia moving forward.
Here is a Bloomberg piece that goes a bit more in-depth on the Russian crypto situation.
Aside from Russia, there was also some pretty alarming crypto news related to the US government this week as well.
The America COMPETES Act was proposed by the House and endorsed by the Biden administration this week.
In a statement from President Biden, the Act is described as “an important step forward today in advancing legislation that will make our supply chains stronger and reinvigorate the innovation engine of our economy to outcompete China and the rest of the world for decades to come.”
The strange thing is the little part that was snuck into this Act that “would essentially give the Treasury Secretary unchecked and unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions.” according to Jerry Brito of Coin Center.
If approved, this would enable the Secretary of the Treasury (Currently Janet Yellen) to singlehandedly prohibit any cryptocurrency transactions by a company or an individual in the US, with essentially unchecked power.
This makes it pretty clear that there exists a portion of our government that is aiming to covertly regulate the emerging crypto/blockchain industry, rather than allow for the public to decide on the matter. This isn't a conspiracy, it's simply an attempt by our government to maintain some degree of control over an economic future that is looking less clear by the day.
Here is a link to Jerry Brito’s full thread explaining the danger of this act potentially passing.
While the cryptocurrency market attempts to consolidate once again at newer lows, we continue to sit on our hands. We will also continue to keep an eye on trends in global equities to measure whether or not any appetite for risk is re-entering the market before we get gung-ho on crypto.
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