Gnosis safe to airdrop 50 million ETH tokens to wallets
Gnosis Safe has announced plans to airdrop 50 million SAFE tokens to thousands of Safe wallets to ensure the successful launch of its decentralised autonomous organization (DAO). The firm uses smart contracts to support its multi-signature wallet, which requires more than one person’s signature to execute transactions. Gnosis Safe allows users to securely store Ethereum, ERC20 tokens and interact with decentralised applications.
Crypto prices today: Bitcoin falls 6%, ETH down 5%
Cryptocurrencies have fallen sharply, with sudden selling dragging Bitcoin to a three-week low.
Bitcoin is currently trading at $21,953.99, a decline of 6.2% over the previous day. Ethereum fell 5.25% over the last 24 hours to $1,748.29. Solana crashed 10.15% to $36.23, while Cardano is trading lower by 11.8% at $0.475. Avalanche (AVAX) is down 13.5% to $22.32. The global crypto market cap stands at $1.05 trillion, a 6.25% decline over the previous day.
Huobi Bitcoin Exchange’s HUSD stablecoin loses Dollar peg
HUSD has become the latest stablecoin to lose its peg with the U.S. dollar, crashing more than 14.7% on Thursday. Issued by Hong Kong-based Stable Universal, HUSD is an ERC-20 token on the Ethereum blockchain. It is marketed as a “safe and secure stablecoin” that combines the stability of the U.S. dollar with the efficiency of blockchain technology.
Gemini to offer staking support for investors
Crypto exchange Gemini will offer support for clients throughout the U.S., Singapore, and Hong Kong to earn and store staking rewards in their Gemini accounts. The company will support staking MATIC on the Polygon network and will roll out support for Ethereum, AUDIO, Solana (SOL), and Polkadot (DOT) over the next few months.
Ripple unveils crypto on-demand liquidity service in Brazil
Ripple has introduced its crypto on-demand liquidity (ODL) service in Brazil in partnership with Travelex Bank. The company’s ODL uses XRP to accelerate the transfer and exchange of fiat currencies between countries. Travelex will use ODL for payments between Brazil and Mexico for now.
Bitcoin cryptocurrency representation is pictured on a keyboard in front of binary code in this illustration taken September 24, 2021. REUTERS/Dado Ruvic/Illustration/file photo
ED probing crypto exchanges for alleged laundering of over Rs 1,000 crore
The Enforcement Directorate (ED) is probing at least ten crypto exchanges for allegedly laundering more than Rs 1,000 crore as crime proceeds of the accused companies in an instant loan app case. Several loan apps had reportedly approached these exchanges to buy crypto worth Rs 100 crore and send them to international wallets. The crypto exchanges did not conduct any due diligence and also failed to raise suspicious transaction reports.
Crypto prices today: Bitcoin up 7%, ETH jumps 12%
Bitcoin is currently trading at $24,550.8, an increase of 7% over the previous day. Ethereum jumped 12.4% over the last 24 hours to $1,888.64. Solana rose 13.6% to $44.9, while Cardano is trading higher by 6.5% at $0.544. Avalanche (AVAX) rose 9.2% to $29.88. The global crypto market cap stands at $1.16 trillion, a 7.14% increase over the previous day.
CoinFLEX plans $84M restructuring in Seychelles
As per a Bloomberg report, crypto derivatives exchange CoinFLEX is seeking a quick resolution to its latest legal troubles as it files for restructuring in a Seychelles court. It intends to raise $84 million to pay off its debt. CoinFlex is seeking approval from depositors and the court on its proposed plan to issue depositors with rvUSD tokens, equity, and a locked version of its native token FLEX coin.
Ripple to consider buying bankrupt Celsius’ assets: Report
According to a Reuters report, Ripple Labs may be interested in purchasing assets of the insolvent crypto lending company Celsius. CEL, the native utility token of Celsius’ platform, jumped 23% on Wednesday following the news. In June, Celsius froze its users’ assets due to “extreme market conditions”. It quickly paid off its outstanding debts on various DeFi loans, reclaimed its collateral, and filed for bankruptcy a month later.
Ethereum’s final testnet merge goes live
The final test environment network (testnet) merge before the Ethereum blockchain makes its move from proof-of-work to proof-of-stake has been completed successfully. Goerli was the last of three public testnets to run through a “dress rehearsal” of the merge. The mainnet merge is expected to occur towards the end of September.
Proof of Work is a competition between miners to solve cryptographic algorithms or equations and validate the transactions to earn blockchain rewards. Meanwhile, Proof of Stake implements randomly chosen validators to make sure transactions are reliable, compensating them in return with crypto.
Bitcoin is now legal tender in El Salvador. One can now use Bitcoins to make day-to-day transactions. There was quite some stir in the crypto market after the announcement was made. There are some aspects of this move by El Salvador that are of serious concern. In this piece, we talk about why cryptos crashed after Bitcoin was legalized in El Salvador, how this move could affect the country’s economy, and if this move is possible in other countries.
El Salvador, Crypto Crash, and More
El Salvador made Bitcoin legal tender on Tuesday, September 7, 2021. The crash was anticipated, as the announcement was made way back in June 2021. After the decision was finalised, the entire crypto market came tumbling down. Bitcoin, which had hit $52,000 on Tuesday, tumbled close to ~11% after a sporadic bull run lasting months. Bitcoin’s rivals Ethereum (ETH) was down ~10%, Cardano was down ~11%, XRP by Ripple tumbled ~17%, Dogecoin slumped by ~15%.
All currencies tumbled, but there was ONE that defied the crash. Solana, another cryptocurrency, defied odds and rose by ~5% after the move was announced. Solana token has zoomed by ~400% in 30 days. Solana is a blockchain network (similar to Ethereum) that seeks to develop crypto-based products and services with more than 400 projects under it.
Social media handles were anticipating the crash a day before El Salvador finalized its bid to legalize Bitcoin. The crash was triggered by traders booking profits in a move powered by overpriced crypto markets. Additionally, uncertainty arose on the implementation of the system in the country. Chivo, a widely used crypto wallet in El Salvador, crashed after the announcement was made. Right after global cryptos crashed, Salvador’s President Nayib Bukele tweeted that the country is buying 150 Bitcoins. ‘Buying the Dip. 150 new coins added’, read Bukele’s tweet. As of September 9, 2021, El Salvador holds 550 Bitcoins in total.
Sustainability and Suspicion
El Salvador’s move to make Bitcoin a legal tender was seen with suspicion. According to a Central American University (CAU) survey, close to 70% of Salvadorians has opposed the move. The sustainability of the move is also questionable. El Salvador uses the US Dollar as its official currency. In a country where only 30% of the total population has bank accounts, Bitcoin benefits only the rich and not the marginalized.
The World Bank had rejected El Salvador’s request for implementing the Bitcoin system in the country, citing ‘environmental and transparency concerns’.
El Salvador’s Gross Domestic Product (GDP) relies on foreign remittances from Salvadorians living abroad who send back money home. In 2020, Salvadorians sent back $6 billion home in the form of remittances. President Bukele argues that sending money home in Bitcoins will help Salvadorians save on ‘remittance fees.’
The country has budgeted $203 million for the implementation of Bitcoin in the country. It has also set aside incentives for its citizens to use bitcoins. It has set aside $150 million to guarantee the convertibility of Bitcoin into US dollars and close to $23 million for financing the rollout. The country has set aside $30 million for a $30 bonus for new users of Bitcoin.
Conclusion
The idea of a cryptocurrency as an asset or an investment class is widely accepted. Yet, the use of cryptos as a mode of payment is seen as a blunder. First is the problem of cryptos being widely used to finance illicit or illegal activities. Second, comes the issue of taxation of cryptos. A currency that cannot be tracked or regulated cannot be taxed efficiently. The third issue is the volatility of cryptos. They are an extremely volatile asset class, and one might risk losing their savings in case an unprecedented change comes in its exchange value. The latest news is that Ukraine has also legalized and regulated Bitcoins in a law passed by the parliament. Only six lawmakers opposed the implementation of Bitcoin.
Coming to the crypto trading space. Cryptos managed to bounce back as traders across the globe ‘bought the dip’. Bitcoin currently has a support level of $45,000 and a resistance at $50,000. Its fall from $52,000 has eased selling pressure off the market. The next big move that crypto traders need to watch out for is the quantitative easing or interest rate cuts that the US Fed plans to introduce by October-end or November-mid.
