The cryptocurrency market is one of the most – if not the most – dynamic and volatile asset market. The volatility and riskiness of the market is what makes it appealing to a major chunk of investors. The bull run of 2021 has also contributed immensely into the growth of the cryptocurrency market. The high risk of the market is translated into high returns and the potential – not just in terms of returns – of the blockchain technology has also been gaining popularity.
The cryptocurrency market continues to operate in a slight informal manner around the globe. As the technology of cryptocurrencies is novel, regulators are unsure about how to navigate the crypto space. Here are some of the major developments that occurred throughout the previous month:
El Salvador becomes the first country to recognize Bitcoin as legal tender. The president NayibBukele is a staunch advocate of cryptocurrencies and plans on incorporating cryptocurrencies in the economy. The president had also been in talks with the national oil and gas company of the country for cryptocurrency mining. The IMF did not take well to the involvement of cryptocurrencies in the country. However, El Salvador is in discussion with the IMF to reach a consensus. Paraguay may become the second country to legalize Bitcoin. Lawmaker Carlos Rejala is leading a bill for this purpose.
Coinbase found itself amidst a class action lawsuit as six cryptocurrency owners went to court for having their accounts disabled without any reason which resulted in losses. The complaint was filed in San Francisco with compensation of $5 million. Kraken has been debating its direct listing after the subpar performance of Coinbase. An IPO may be more likely for the exchange in late 2022. Kraken has also disabled margin trading for US residents.
UK’s Financial Conduct Authority (FCA) issued multiple warnings to Binance regarding its lax anti-money laundering regulations. The FCA has also banned the British wing of the exchange, Binance Markets Limited, which has not registered with the financial watchdog. Although the ban cannot stop users from trading on the Binance app. Japan’s Financial Services Agency (FSA) has also issued warnings to Binance as the exchange has not yet registered in the country.
The venture capital behemoth Andreessen Horowitz raises its biggest yet cryptocurrency fund worth a staggering $2.2 billion. The firm’s Crypto Fund III will be dedicated towards proving that the blockchain technology is revolutionary. The Fund will invest in all sorts of crypto projects – new and old. Blockchain Capital’s venture fund has also raised $300 million for cryptocurrency projects, primarily from Visa and PayPal.
