What happened this week in the world of blockchain and cryptocurrencies? The most relevant local and international events as well as appealing background reports in a concise and compact weekly review.
Selected articles of the week:
Bitcoin represents a groundbreaking development in the world of finance and is the first successful implementation of a decentralized digital currency. The distributed payment system enables the secure and direct transfer of digital money without the need for a third party. As part of this vision of an independent network, Bitcoin’s monetary policy is also programmatically predetermined. The inflation of “digital gold” decreases every four years. The fourth halving has already taken place today. What does this mean for the price?
In the next 24 hours, the bitcoin inflation rate will be reduced by another “halving” – all relevant information.
New token protocol on Bitcoin
For a year now, the so-called Ordinal Inscriptions have enabled developers to create fungible tokens (BRC-20s) and non-fungible collectibles (NFTs) on the Bitcoin blockchain. However, Bitcoin is by no means optimized for trading fungible tokens. The handling of BRC-20 tokens therefore has many inefficiencies. The Runes protocol, which was published in the Halving block, is intended to change this.
Runes, a new Bitcoin protocol developed by Casey Rodarmor, is launching with the 2024 Bitcoin Halving. The protocol enables fungible tokens.
A landmark court case for the DeFi sector
Blockchain technology enables the programming of automatically executing protocols, so-called “smart contracts”. In a decentralized way, developers can create applications that run independently of the original team on a distributed network. Today, there is an extensive ecosystem of such decentralized applications (“dApps”), of which Uniswap is the leading protocol for trading cryptocurrencies. The application was developed by the US-based company Uniswap Labs. According to the SEC, Uniswap Labs is providing investors with a non-registered securities offering. Such an interpretation of the law would have devastating consequences for the entire decentralized finance (DeFi) sector.
A SEC lawsuit accuses protocol developer Uniswap Labs of violating United States securities laws.
Asia wants to catch up
The first spot-based Bitcoin ETFs have been trading in the United States since mid-January. By all indicators, these products have been a complete success. Now Hong Kong wants to follow the American example. The relevant authorities have granted approval for spot ETFs on Bitcoin (BTC) and Ether (ETH) and trading should begin in the coming weeks. However, it remains to be seen whether the rush for the products will be similar to that in the US.
Hong Kong’s imminent launch of Asia’s first spot crypto ETFs could position the region as a significant player in the global market.
Altcoins suffer from liquidation cascade
Just under a month ago, Bitcoin reached a new all-time high of USD 73,000 after a breathtaking rally since the approval of spot Bitcoin ETFs. The market then finally calmed down over the past few weeks. Bitcoin entered a consolidation phase, while investors shifted their focus further along the risk curve to altcoins. Over the past weekend, there was then a significant liquidation cascade of leveraged positions. This was triggered by the renewed conflict in the Middle East.
A complete overview of the day’s events on the crypto markets. Compactly summarized in the CVJ.CH Market Commentary.
