Last Week [In] Crypto: Crypto Mining Brouhaha, Increasing Adoption Rates, Trouble with Coinbase NFTs, Central Banks Hiking Rates

It was an interesting week for cryptocurrencies with lots of happenings in almost every corner of the ecosystem between May 2 to 8. While keeping up with all the news might be a mountain to climb, Be[In]Crypto has selected the leading stories over the last week from the approval of crypto mining in Uzbekistan, the adoption of Bitcoin by the Central African Republic, pro-crypto legislation in California, CryptoPunk’s new transaction volume, and the effects of the Feds’ hike on crypto.

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Crypto mining saga 

Last week started with a bang for cryptocurrencies as Uzbekistan legalized crypto mining in the country. A presidential order was issued but it included the catch that miners have to use solar energy to run their plants instead of burning coal and other fossil fuels.

Given the energy concerns around cryptocurrency mining, the Wikimedia Foundation announced that it will stop accepting crypto donations. The Foundation had previously received donations in Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH) which are all proof-of-work cryptocurrencies. The impact of the decision might be insignificant for the foundation because crypto donations accounted for only 0.08% of the total revenue in the last 12 months.

Despite all the flak that Bitcoin has received over its environmental impact, Peter Schiff, an outspoken critic is not in favor of an outright bitcoin ban. The gold proponent referred to mining Bitcoin as a waste of energy but “people have a right to waste energy, as long as they are willing to pay for it,” he said.

The adoption spree continues 

Adoption of cryptocurrencies reached a fervent pitch over the last few days with Argentinian banks bowing to public pressure to offer crypto services to customers. Banco Galicia, Argentina’s largest bank in terms of market value now allows clients to buy BTC, ETH, Ripple (XRP), and USD Coin (USDC) after a bank survey revealed that 60% of clients favored the move.

In the Far East, South Korea’s incoming President is going all the way to foster cryptocurrency adoption in his country by reversing the ban on initial coin offerings (ICOs). According to reports, Yoon Suk-yeol, the president-elect is also planning to classify digital assets as securities and non-securities in a two-lane regulatory framework.

The Central African Republic (CAR) became the latest country after El Salvador to adopt Bitcoin as legal tender but the academia and opposition parties have questioned the validity of the decision. According to the International Monetary Fund (IMF), “the adoption of Bitcoin as legal tender in CAR raises major legal, transparency, and economic policy challenges” but the Fund will be assisting the country’s authorities to address the concerns associated with the decision.

The race for the US crypto hub is in full swing

California has joined the heated race to become America’s crypto capital with the introduction of a framework for adopting digital assets. The executive order by Governor Gavin Newsom gives the green light for authorities to begin drafting the regulatory framework that is widely believed to be the most comprehensive in the entire US.

On the other hand, Colorado has passed a bill to explore how security tokens can be deployed in fundraising for the “best interest of the state”. Jared Polis, the state’s governor, had previously stirred the pot by announcing that Colorado was almost close to accepting cryptocurrencies as a means of paying taxes at the ETHDenver Conference.

Bitter-sweet week for NFTs

Coinbase’s non-fungible token (NFT) marketplace was off to a lackluster start after recording less than 110 transactions worth around $60,000. The figure stands in contrast to the 3.7 million people that signed up for the waitlist in February with the experts touting OpenSea to be the “leader for quite a long time.”

Away from the sour news of Coinbase’s NFT marketplace, CryptoPunks, a pioneering NFT collectible, has reached $2 billion in all-time sales. The new metric places CryptoPunks above Bored Ape Yacht Club, NBA Top Shot, and brings it one step closer to Axie Infinity.

Gary Vaynerchuk, the founder of VaynerMedia, has revealed that he owns 62 CryptoPunks that are worth over $10 million. “There’s probably not an investment I have that I’m more confident in than CryptoPunks,” he said in a podcast with Logan Paul.

Federal Reserve sparking worry for crypto investors

The U.S. Federal Reserve (Fed) has announced the increase of interest rates by half a percentage point to 0.75% making it the highest increase since 2000. Anthony Pompliano, a Bitcoin enthusiast has referred to the latest hikes as proof that the Fed has lost control of the economy as it battles both sky-high inflation and the re-emergence of a second recession since 2020.

The actions of the U.S. Federal Reserve are not solitary as there is a trend among the central banks of G7 countries to increase rates and taper their balance sheets. A report by Bloomberg Economics suggested that the central banks could reduce their balance sheets by as much as $410 billion, sending markets into panic mode.

Despite the murkiness of the markets, the Luna Foundation Guard purchased 37,863 BTC to bring its total BTC holdings to 80,394 BTC. The latest purchase was carried out with the help of Three Arrows Capital and Genesis Trading but it was not enough to save Bitcoin from trading below $35,000.