What happened in crypto, blockchain and the metaverse this week. eToro‘s market analyst and crypto expert Simon Peters gives us his weekly take.
Bitcoin holds above $20k
Bitcoin, the world’s largest cryptoasset, has seen its price hold above the US$20,000 price level in the past week, halting the slides of previous weeks.
It’s too early to say if bitcoin has stabilised at the US$20,000 level. Fear has somewhat died down in crypto markets, but it hasn’t disappeared completely.
Last week the cryptoasset began the week trading around US$19,500 before moving to trade as high as US$21,500 on the eToro platform. Ether likewise began the week around US$1,050 before trading up to finish around US$1,200.
Crypto markets are very sensitive to US markets, in particular to monetary policy decisions from the Fed to combat rising inflation. The raising of interest rates and rising bond yields have affected US equity valuations, and by extension, crypto markets in recent months.
During testimony to Congress last week, Jerome Powell reiterated the Fed’s commitment to bringing down inflation. Reading between the lines, this suggests more rate rises to come. Whether further raising of rates is priced into markets or whether it continues to affect valuations remains to be seen.
Increasing recession risks, poor earnings and forward guidance from companies could further affect stock market prices. Given the recent correlations, crypto prices could also be affected.
Metaverse Standards Forum launches
A group of major tech firms have launched the ‘Metaverse Standards Forum,’ to ensure rigorous standards are met in the fast-growing sector. The move looks like a clear attempt to self-regulate and set basic quality of life standards for users to head off any kind of backlash and ensure some kind of interoperability exists between metaverses.
The new group includes big names such as Epic Games, Huawei, Ikea, Meta, Microsoft, Nvidia, Sony Interactive Entertainment and Qualcomm. However major players including Roblox and Niantic are conspicuously absent from the group.
The news is having a positive impact on metaverse-linked cryptoassets such as The Sandbox (SAND) and Decentraland (MANA). Crypto exists at the centre of the metaverse movement, giving in-metaverse economies grounding and providing usability to players. Developments such as this which help solidify the foundations of the sector could be supportive of the price.
Shiba Inu is spiking
Cryptoasset Shiba Inu (SHIB) is spiking, having risen more than 50% in the past week. SHIB has, to an extent, managed to buck the trend in wider crypto markets at the moment, with the price moving significantly upwards, although not to levels seen last year yet.
A number of factors are driving the token price higher. Part of the trend higher is thanks to major investors buying into the token, with one scooping up 150 billion of the cryptoasset in one swoop.
But the nature of the network is also driving the price higher, with more than 62 billion of the cryptoasset’s tokens burned in the past few days, reducing supply and supporting prices.
This potentially presages changes underway for the Ethereum network through ‘The Merge’, which is looking to move from a proof-of-work to proof-of-stake model – this could have a similar impact to burning by locking coins away through staking.
Tether launches GBP token
Major stablecoin provider Tether has announced it intends to launch a stablecoin pegged to Pound Sterling in July. The firm already has a US dollar token, euro token, yuan token and has announced plans to launch a Mexican peso token too.
The move underlines a growing relevance for stablecoins in the crypto sector. Stablecoins provide important liquidity and stability in the market while maintaining on-ramps for users and investors looking to switch between cryptoassets with ease.
The addition of a pound-backed stablecoin is good news for the UK in that it can position itself as a top player in the sphere. Tether is a well-established player in the space and with regulations around stablecoins imminent in the UK, should be on good ground for changes to come.
This news is republished from another source. You can check the original article here.