Headlines
▌ECB: Bitcoin is exiting the market and approaching "irrelevance"
The European Central Bank published a blog titled "Bitcoin's Last Stand", detailing the decline of the world's number one digital currency. Interestingly, the bank did not cite FTX and its November crash as the reason why Bitcoin performed so poorly. Instead, it suggests that Bitcoin was on its path to destruction long before the company started to be forgotten. The blog also stated that bitcoin's conceptual design and technical flaws cast doubt on its use as a payment method. Real bitcoin transactions are cumbersome, slow and expensive. Bitcoin has never been used to any significant degree for legitimate real-world transactions. Bitcoin is also not suitable as an investment. It does not generate cash flow (like real estate) or dividends (like stocks), it cannot be used productively (like commodities) or provide social benefits (like gold). Therefore, the market valuation of Bitcoin is entirely based on speculation.
Policies
▌Romania carried out 17 raids last fall to investigate crypto tax evasion
According to local media, Romanian police and tax officials conducted 17 raids last fall, involving related parties accused of evading taxes by concealing cryptocurrency trading profits. Cristian Roman, partner at Iordăchescu & Asociații law firm, told Romania Journal that they searched for relevant addresses in the capital, Bucharest, and in the counties of Dâmbovița, Ilfov and Olt. According to data provided by the Romanian police, between 2019 and 2022, 19 targeted individuals formed or joined an organized criminal group with the aim of evading taxes. Investigators say the taxable income they tried to conceal came from cryptocurrency trading. According to preliminary estimates, their activities have cost the state budget a total of 3 million Romanian Leu (nearly 650,000 US dollars).
Cryptocurrency
▌Report: The Ethereum ecosystem is in the lead
Nansen released some emerging trend reports for 2023. The report shows that the market showed signs of improvement in the first week of 2023, with the Ethereum ecosystem leading the way. According to the report, this surge is mainly due to the upcoming Shanghai upgrade of the ethereum network, which will go live in March. The highly anticipated upgrade will allow investors to withdraw assets currently locked in various staking protocols, while significantly reducing the risk involved in staking ETH. Just as the merger that occurred last year built bullish momentum in the weeks leading up to the event, the upgrade in Shanghai is currently fueling massive hype within the crypto market. The Nansen report further noted that Ethereum Layer 2 solutions, such as Arbitrum and Optimism, have been gaining traction over the past few months, with the number of transactions on these chains increasing significantly.
▌MakerDAO released a new proposal to change some parameters of DeFi operation
In a new proposal, the Open Market Committee of the MakerDAO governance team is seeking community approval to make changes to some parameters of DeFi operations based on recent events in the lending vertical of the DeFi ecosystem. According to the new proposal, MakerDAO’s Aave-DAI direct deposit module (Aave D3M) is proposed to be reactivated with a limited debt ceiling, and the Compound v2 D3M debt ceiling will be increased. Stability fees for the protocol's WSTETH-B vault type will also be standardized. Additionally, USDP PSM fees will be increased to prevent increased exposure. According to the Open Market Committee, if implemented, these changes are expected to result in an increase in annual revenue of approximately 525,000 DAI and increased COMP rewards from Compound D3M’s Maker vaults.
▌Wall Street Journal: FTX seeks to recoup SBF's multi-million dollar charitable donation
FTX’s new management is seeking to recover millions of dollars donated by the encryption exchange and its former CEO SBF. A spokesman for SBF said charitable donations did not come from customer deposits but from trading profits. Announced in February 2022, the charity plans to deploy more than $100 million in its first year, with donations of up to $1 billion.