Crypto prices remained subdued ahead of EU vote on the MiCA proposals on cryptocurrency regulation. Though the controversial proposal to ban proof of work cryptos is reportedly absent, there is still caution ahead of the regulatory initiative. Crypto market capitalization is at $1.73 trillion versus $1.77 trillion on Friday.
The European Commission’s Regulation of Markets in Crypto-assets (MiCA) is a regulatory framework developed since 2018 to help regulate currently out-of-scope crypto-assets and their service providers in the EU and provide a single licensing regime across all member states by 2024.
Earlier, the proposal that crypto-asset service providers shall not provide services related to crypto-assets that do not meet the environmental sustainability criteria, was seen as effectively banning exchanges from listing any Proof of Work (PoW) crypto asset, triggering backlashes from the crypto community.
Proof of Work is a blockchain consensus mechanism involving solving of computationally intensive puzzles to validate transactions and to create new blocks. It has been considered as an effective model to secure the blockchain and deter bad actors from validating fake transactions.
Bitcoin, Ethereum, Dogecoin, Litecoin, Bitcoin Cash, Ethereum Classic, Monero and Zcash are the top Proof of Work coins. Ethereum and Dogecoin are however set to migrate to a Proof of Stake consensus mechanism.
Bitcoin is currently trading at $38,825.35, after having fallen to a low of $37,680.73 in the past 24 hours. The overnight gain is 0.79 percent.
Ethereum’s current price of $2,575.06 represents a gain of 1.12 percent from the levels a day ago.
Among the proof of work coins, 13th ranked Dogecoin is trading at $0.1147, having risen 1.33 percent in the past 24 hours. Favorable comments from Elon Musk, the CEO of Tesla Inc, appears to have helped the surge in the meme coin. 21st ranked Litecoin has gained 0.37 percent and is currently trading at $104.70. However, 28th ranked Bitcoin Cash has lost 0.29 percent overnight. 34th ranked Ethereum Classic is down 0.72 percent in the past 24 hours. 36th ranked Monero is also down 1.41 percent on an overnight basis. 49th ranked Zcash has however gained 3.75 percent in a day’s time.
7th ranked Terra (LUNA) is trading at a premium of more than 6 percent. Other gainers down the hierarchy are 47th ranked THORChain (RUNE) which gained more than 9 percent and 53rd ranked The Graph (GRT) which gained more than 5 percent in the past 24 hours.
Crypto prices have also been influenced by reports that crypto transaction volumes from Russia have dipped substantially. Reports from Ukraine, indicate that the country is trying to illustrate its war efforts in NFTs to raise money for the war. On Monday, Japanese authorities have directed cryptocurrency exchanges to comply with sanction orders and to not process transactions involving digital assets that are liable to asset freeze restrictions on Russia and Belarus over the Ukraine war.
Cryptos remained subdued in early trade, while the stock markets in Europe rallied and Asian stocks closed mixed. Gold ranged between $1,957 and $1,994 ahead of the Fed’s monetary policy review and interest rate decision, that would be known by Wednesday. The Bank of England’s stance and strategy on monetary policy and interest rates would be known by Thursday.
The hyper-inflation narrative has in the past also spurred a debate on whether cryptos can serve as an effective inflation hedge. Though the recent performance of cryptos, especially Bitcoin has not been encouraging enough to warrant an inflation-hedge positioning, Bitcoin can still be in the reckoning if it demonstrates store-of-value over a longer time horizon.
As EU debates the ambit of cryptocurrency regulation, the recent developments from the war zone would definitely be on the top of its mind. The war has catapulted crypto to an unanticipated pedestal, as an array of use-cases suited both for peace-time and war-time get highlighted.
For comments and feedback contact: editorial@rttnews.com