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Crypto Winter Can’t Keep Institutions From Boosting Their Crypto Allocations

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The well-known crypto trading platform Coinbase surveyed institutional investors, and the results show that despite the industry’s continuous “Crypto Winter,” these investors have boosted their allocations to cryptocurrencies.

According to the report, 62% of current cryptocurrency investors have increased their allocation over the past 12 months, while only 12% have decreased their holdings. 

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Source: Coinbase

Additionally, over the following three years, 58% of investors anticipate increasing their allocations. Whereas 59% of investors either utilize buy-and-hold strategies now or plan to do so in the future.

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Source: Coinbase

The overall perception of digital assets has remained favorable, with 72% of respondents agreeing that “digital assets are here to stay.” When considering both those who already invest in them and those planning to do so, there is an overwhelming acceptance for crypto – at 86% and 64%, respectively.

Despite continued bullish optimism, the crypto winter has dimmed prospects for near-term price growth. As per investors’ expectations for price movements, 54% believe prices will stay range-bound during the upcoming year, while 29% believe prices will decline.

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Source: Coinbase

The survey’s findings also show that investors are sowing seeds for the future. They were questioned about particular actions they have taken or intend to take while investing in cryptocurrencies. The top replies were to get research and insights (44%) and market data (36%).

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Source: Coinbase

Attitudes Towards Crypto Assets 

Additionally, the survey further reveals the reasons for investing and attitudes regarding the asset class:

Investors pointed to the goal to improve funded status,access yield opportunities, invest in innovative technology, and potential for long-term appreciation as main reasons for investing in the asset class.

Some investors believe that digital currency is either a commodity or an asset, but more investors are creating categories for it themselves. “This is also evidence of a long-term opportunity that may emerge in the future.”

Of all the asset classes surveyed, 56% of investors chose US corporate bonds for the most beneficial returns over the next 3-year period. Digital assets came in second place at 35%, followed by the property at 35%.

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Source: Coinbase

When looking at the cryptocurrency market from an investor perspective, it becomes clear that regulation is needed. A 47% of investors see past crashes such as Terra Luna and 3AC going bankrupt as a call to action for policymakers to make things fairer for everyone and put in place regulations that can help limit potential future losses. 

However, more than a third (36%) find these events proof enough that firms need better risk management strategies – particularly when navigating volatile markets.

Related Reading | $575 Million Crypto Fraud & Money Laundering Scheme Busted in Tallinn

Crypto Regulations in Kenya: 4 Million Kenyans Will Be Affected If Proposed Bill Accepted

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Business Daily Africa reported on November 21 that if the Kenyan parliament accepts the proposed changes to crypto regulation and taxation, the Kenya Revenue Authority (KRA) will go after 4 million Kenyans with cryptocurrency holdings.

The Capital Markets (Amendment) Bill 2022 seeks to introduce an excise duty structure like the one applied to bank transactions. It will apply a 20% excise duty deduction on all commissions and transaction-related fees.

According to TripleA research report, Kenya ranks number one in the world for peer-to-peer cryptocurrency trading volumes while coming in at number five when it comes to total cryptocurrency activity. 

With an estimated 4.5 million Kenyans owning cryptocurrency, 8.5% of the country’s population has embraced this phenomenon – making Kenya rank number one globally regarding percentage ownership rates.

The country is in the top ten global and African countries for both bitcoin ownership and blockchain-related transactions. Kenya is rated fifth internationally for overall digital currency activity and first globally for P2P crypto trading volume, which enables merchants to conduct business directly with one another without the need for a centrally located third party.

However, Kenyan investors purchase digital currency to save their money from being devalued due to the region’s inflation, so they can easily send money internationally without going through rigorous bank processes. They also use it for personal financial transactions, such as using it when abroad or buying goods from outside.

As per Business Daily Africa’s report, Governor of the Central Bank of Kenya Patrick Njoroge believes that while digital currency can be hazardous to financial stability, it can also serve as an asset for integration into the current banking systems.

Kenya’s Crypto Bill “The Capital Markets”

According to the report, if Kenyans sell or use digital currencies, the higher market value will be subject to the KRA capital gains tax. Those who make cryptocurrency trading their company may have to pay income taxes on their profits.

The bill, sponsored by Mosop MP Abraham Kirwa, said:

Where the digital currency is held for a period not exceeding twelve months, the laws relating to income tax shall apply or for a period exceeding twelve months, the laws relating to capital gains tax shall apply.

For the first time ever, cryptocurrency transactions in Kenya will be regulated and brought into the public eye. Even in industrialized nations, where exchanges are more closely monitored, cryptocurrencies are still largely unregulated and uncontrolled. 

Estimating how much money Kenyans hold (or are owed) through digital assets is difficult due to the lack of reliable data – but it’s believed to be an astronomical amount, considering that most citizens have a high literacy level when it comes to technology.

For the first time, if the bill will be approved, cryptocurrency will be regulated by law. For businesses and people in Kenya, the increasing mainstreaming of cryptocurrency might spell significant changes.

Those who hold crypto assets need to report the information about it to the Capital Markets Authority (CMA) for tax purposes. They are required to provide details about when they acquired it and when they sold it.

According to the bill:

A person who possesses or deals in digital currency shall provide the Authority with the following information for tax purposes—the amount of proceeds from the transaction, any costs related to the transaction and the amount of any gain or loss on the transaction.

Related Reading | The True Potential Of Dogecoin: Insights From A Former Ethereum Researcher

The True Potential Of Dogecoin: Insights From A Former Ethereum Researcher

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Alex Valaitis, the founder of W3T and former Ethereum researcher, posted research through his Twitter thread about Dogecoin basics and its implications for scalability as well as use cases.

In the tweet’s comments section, Alex stated that he selected three major areas of the DOGE coin to concentrate his investigation, including technology and protocol, instances of using Dogecoin, and “The Dogecoin community.”

He started by speaking about its’s fundamentals, specifically how it is a “standalone layer-1 blockchain” that employs Proof of Work as its consensus process. He went on to say it was based on other blockchains in existence, such as LuckyCoin and Litecoin, but unlike those two, he told DOGE had some additional features.

According to the statement:

While Dogecoin is a PoW blockchain like Bitcoin, its use of Scrypt technology means that SHA-256 bitcoin mining equipment cannot be used to mine DOGE. Instead, miners must purchase less powerful FPGA & ASIC devices for mining.

Dogecoin Mining More Approachable Than BTC

Theoretically, this should make DOGE mining more approachable than Bitcoin mining for the average individual. There are currently 5,896 nodes in total, which are evenly scattered over the world. 

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Source: Alex Valaitis Twitter Thread

It’s also important to think about scalability and processing speeds when considering DOGE’s consensus method. Their average transaction time is only one-tenth of the duration it takes for BTC transactions; additionally, it can process up to 33 transactions per second at full capacity – which is 10x faster than BTC without a lightning network enabled.

Source: Alex Valaitis Twitter Thread

Moreover, Alex said:

One question that came up in my research, was whether or not Dogecoin supports smart contracts, like Ethereum does. Dogecoin developer @inevitable360 pointed out that while Dogecoin does not have smart contracts, it does support “Script Opcodes

One concerning thing found from the research was the high concentration of Dogecoin in just a few wallets. In comparison, there are very few addresses for Bitcoin that account for 5%

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Source: Alex Valaitis Twitter Thread

Alex also highlighted that the block reward had been set at 10,000 $DOGE per block, and one is mined every minute. It creates an additional 5 billion new coins annually, giving the current inflation rate of 3.87%. In addition, he stated that there are 132.6 billion coins in circulation right now.

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Source: Alex Valaitis Twitter Thread

Dogecoin Use Cases & Community

After examining the various options for custody wallets on Dogecoin’s website, Alex said he “ultimately went with TrustWallet.” Sodogetip was also an option worth considering because it allows users to link their Reddit and Twitter accounts in order to get tips directly. 

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Source: Alex Valaitis Twitter Thread

He believes that the most viable uses of Dogecoin appear to be as a payment method that could supplement already-existing institutions- including large retailers/social media sites- or as a complimentary form of currency.

Furthermore, the long-term viability of a layer-1 blockchain depends on the existence of a sizable and fervent core community. The active community is shown in the DOGE instance; some have even given it the moniker “the people’s currency.”

As demonstrated by the enormous online communities it has on popular websites, such as the 3.5 million followers it has on Twitter, the 2.4 million “Subscribers” it has on Reddit, and the 31,285 members it has on Discord.

According to the statement:

In conclusion, I believe Dogecoin is one of the most misunderstood blockchains in crypto. It would have been easy for me to dismiss Dogecoin and chosen to never research it, however, I’m glad I took the time to dive deep.

Related Reading | Weekly Market Update: LEO & OKB Marks Significant Gains While Others Are Struggling

BIS Report: Why Bitcoin Adoption Is Growing Among Retail Investors

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On November 14th, the Bank for International Settlements (BIS) published a research report that outlined the factors that lead retail investors to participate in the cryptocurrency market. 

They provide support for the notion that the majority of investors perceive cryptocurrencies as speculative investments as opposed to methods of settlement for legitimate business dealings.

Their key findings indicate that more entrance by retail investors has been associated with price rises for Bitcoin globally. Notably, data from 2015 to 22 shows that users are more likely to use cryptocurrency trading applications actively in the months after a spike in the price of Bitcoin.

It was also highlighted that this positive association holds up well when other possible causes are taken into accounts, such as the general state of the financial markets, uncertainty, or national characteristics.

Moreover, for the protection of investors and consumers as well as for financial stability, this finding is also pertinent for policy discussions on the regulation of cryptocurrencies. Simple calculations show that it is highly likely that between 73 and 81% percent of individuals lost money in investments involving cryptocurrency.

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Source: BIS Working Papers

However, the findings point out a major concern among retail investors that they may not be aware of the risks involved with investing in cryptocurrency. Events from recent times, such as an increase in interest rates and other financial burdens, can cause this newfound asset class to suffer a significant blowback.

Crypto App Adoption When Bitcoin Was On Spike

The report says:

We find that 73% of the users downloaded their app when the price of Bitcoin was above $20,000 – above the price of Bitcoin in October 2022.

Screenshot 2022 11 15 185308
Source: BIS Working Papers

The second finding in the research is that, when the demographics of crypto app users are examined, it is discovered that 40% of users are males under 35, a group that is typically considered to be the most “risk-seeking” in society. 

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Source: BIS Working Papers

Compared to female users and older males, these users are more sensitive to changes in the price of Bitcoin. Additionally, they discover a user sensitivity for Android users, who typically earn less than iOS users.

The highest rates of crypto exchange app adoption across the research period were seen in Turkey, Singapore, the United States, and the United Kingdom, as assessed by the total number of downloads per 100,000 individuals. China and India have the lowest rates of retail use, where legislative constraints probably limit broader implementation.

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Source: BIS Working Papers

Related Reading | FTX’s Collapse Prompts Urgent Regulation From French Central Bank

Hong Kong To Become Virtual Asset Hub Despite FTX Collapse

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According to the publicly available statement from the Foreign Service Officer, the recently issued Policy Statement on the “Development of Virtual Assets in Hong Kong” outlines the SAR plans to deal with those who use this new technology and those developing it.

The Government of Hong Kong Special Administrative Region (SAR) issued its new Policy Statement at the end of the last month.  

In this Policy Declaration, they proposed several pilot programs – such as issuing a new batch of Green Bonds to be tokenized for institutional investors – expecting it to be launched at the end of this year and becoming the world’s first “Tokenized Issuance Government Green Bond.”

Additionally, the Hong Kong Monetary Authority (HKMA) is also researching the possibility of introducing the Digital Hong Kong Dollar, which would act as a link between fiat currencies and blockchain-based virtual assets. 

The HKMA recently held a meeting to discuss regulating stablecoins that can be used as payment methods. They will release the findings of this discussion shortly, and it will “provide the necessary support for promoting more innovations.”

According to the official statement:

the entire policy declaration aims to construct a comprehensive regulatory framework for the virtual asset industry, actively encourage technological innovation and application, and at the same time ensure proper risk management and control.

 Balanced Regulatory Framework For Virtual Assets

Along with aggressively embracing innovation, they also believed that there should be flexible regulatory support that keeps up with the trends.

The notice highlighted that it is necessary now that many cryptocurrency prices have decreased significantly or certain crypto-related companies, such as FTX, have gone bankrupt. Insiders call this a Crypto Winter, leading people to think about new ways of regulating things.

The government notice further claimed that to protect investors and promote innovation, The China Securities Regulatory Commission (CSRC) has closely monitored the developments of new technology – specifically when it comes to virtual currency.

Two virtual asset exchanges have received licenses from CSRC on the regulatory tenet of “same business, same risk, same rules.” These exchanges are required to meet all financial resource and operating expense requirements stipulated to be allowed to operate legally under these regulations.

Moreover, the SFC authorized two brokerages to carry out virtual asset transactions for their customers under the omnibus account structure and gave licenses to eight virtual asset fund management firms.

This new statement from the SFC suggests there will be public consultations on how to ensure small-scale retail investors can access virtual assets under their newly implemented licensing system. They may introduce ETFs investing in virtual assets, which the Hong Kong government supports.

Related Reading | How To Make Money During The Crypto Collapse With Orbeon (ORBN) and Solana (SOL)

Get Paid In XRP! Uphold Launches Crypto-Linked Debit Card With Generous Rewards

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Customers in the United Kingdom can now take advantage of the newest product from Uphold, a worldwide multi-asset digital trading platform, “a crypto-linked debit card.” These cards have reward rates of up to 4% in the $XRP cryptocurrency.

According to the press release, the card’s “US version” will be released next week and will be fully available in the United States by the end of this month. But the US Card will not work in the US states of New York, Louisiana, Colorado, California, and Nebraska. 

Additionally, the Uphold Card does not charge foreign transaction fees which makes it ideal for travel and conducting business internationally.

Simon McLoughlin, CEO of Uphold, said: 

We’re thrilled to offer the most competitive crypto rewards and zero non-sterling transaction fees for UK customers. Making crypto easy is what Uphold does best.

Uphold Rewards In XRP

The platform said rewards are accumulated in “GBP (UK) or USD (US)” and paid out as XRP. There will be no charges for domestic or international transactions. In addition, the Uphold app allows users to exchange their assets.

In particular, they mention that:

As a special launch promotion, the Uphold Card will pay out a 4% reward for all spending through March 2023, and 2% thereafter (subject to the Card’s Terms and Conditions).

Crypto credit and debit cards continue to grow from the first quarter of 2022, when Visa (V) customers made $2.5 billion worth of payments through crypto-linked cards.

Some cryptocurrency debit cards require users to stake platform-specific tokens for a set period of time to gain approval, while others reward successful applicants with cashback given in the form of coins, such as the Visa issued by Binance.

XRP Price Analysis

According to CoinMarketcap’s data, Ripple’s XRP, the most popular cryptocurrency, is currently trading at $0.3704. However, there has been a significant drop of 4% in the last 24 hours and 25.17% in the past seven days.

XRPUSD 2022 11 12 02 53 05
Source: Tradingview.com

The weekly chart’s price movement reveals that since April 2021, the token’s price has fallen below a long-term downward resistance line. Before tumbling to a low of $0.28, it made several failed tries to climb again.

Nevertheless, the price of Ripple is expected to climb by 22% from now until the end of 2022, reaching $0.45. The cost will increase by 39% to $0.51 in 2023 from its present level.

Related Reading | FTX Hack Leads To Mysterious Outflows Of Over $600M

Cryptocurrency Now Recognized As Regulated Financial Instruments And Goods: UK Lawmakers

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The United Kingdom’s newest prime minister, Rishi Sunak, is a huge crypto enthusiast. As Sunak supports cryptocurrency it has been made clear that he wants to turn the UK into a major center for it. In the midst of this, UK Lawmakers have decided to accept cryptocurrencies as regulated goods and financial instruments.

The inclusion of stablecoins in the draft report was approved by the House of Commons as well. The UK’s parliament has decided to publish new stablecoin regulations on Thursday. In a few weeks, the UK government also intends to hold a discussion on cryptocurrency regulations and the digital pound.

Global Cryptocurrency Usage Soars

The use of cryptocurrencies is expanding globally. The required regulations are being introduced by governments all around the world. The focus of governments is likewise shifting to stablecoins. This is because they are less volatile and pegged to either the value of the US dollar or the pound.

Recently appointed Economic Secretary to the Treasury Andrew Griffith claimed that specific cryptocurrency assets and distributed ledger technologies could bring about seismic shifts in the financial sector. The financial security of the users is also at risk, he added.

Griffith further stated,

“We wish to tentatively seize those opportunities … not fall behind other markets, but also proceeded in a cautious way. The government’s position is to start with those most stable, least volatile coins likely to be used by intermediaries as a settlement currency and then we will go forward and consult from there.”

Griffith further stated that to implement the framework and weigh its risks and benefits, the Treasury will communicate with numerous stakeholders and business leaders. As of right now, the House of Lords must give the regulations its final approval. This is necessary since King Charles III of England holds the ultimate authority.

Griffith also brought up the potential for a digital pound to be issued. In the following weeks, this issuance will also be the subject of consultations between the Treasury and the Bank of England.

The new crypto regulation bill received a unanimous vote of support from the committee’s legislators. It seems as though the House of Lords must currently approve the rules.

Binance And Kazakhstan Join Hands To Test CBDC On BNB Chain

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The cryptocurrency sector has seen Binance and Kazakhstan make news over the past several months. The nation was shown warmly embracing the cryptocurrency exchange. More recently, the company was successful in getting a permit to work there. Changpeng Zhao, CEO of the exchange, also disclosed that the nation would test the integration of its CBDC on the BNB Chain.

The CEO of Binance, CZ, noted in a recent Twitter conversation that the exchange has presented the idea of the BNB Chain to the National Bank of Kazakhstan [NKB] earlier. The notion of fusing the BNB Chain with the Digital Tenge emerged. To further explain, CZ tweeted,

“Looking forward to NBK preparing CBDC use cases to see how they could be integrated into #BNB Chain to bridge the gap between traditional banking and the crypto ecosystem.”

It should be mentioned that the government and central bank of Kazakhstan have been preparing to launch their own CBDC for a while now. NKB had previously stated that the Digital Tenge would be released by the end of 2022.

The NKB recently conducted a CBDC “pilot in a controlled environment and with real consumers and merchants,” CZ added.

Binance To Head Kazakhstan’s Crypto World

Binance was spotted building the groundwork to dominate the Kazakhstan cryptocurrency industry, as was previously mentioned. Binance is anticipated to assist the country in market regulation, despite the exchange already having permits to operate in the area. In accordance with a Memorandum of Understanding [MoU] that had already been signed, the company aimed to assist the nation in developing crypto-related rules.

With the Agency of the Republic of Kazakhstan for Financial Monitoring, the company just inked another MOU. The exchange is anticipated to help the authorities in this by identifying and removing cryptocurrencies that have been gained unlawfully.

Now that the exchange is supporting Kazakhstan’s CBDC initiatives, Binance is probably unstoppable.

In other news, the crypto exchange has also announced the launch of Binance Oracle, a new data feed network that enables blockchain smart contracts to interact with actual data, starting with the cryptocurrency exchange’s own internal blockchain service, BNB Chain.

Gemini lands in Ireland with its crypto services

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Numerous cryptocurrency businesses, Gemini per se, have been strutting their stuff in Europe. While many people believe that Europe may become the next hotspot for cryptocurrencies, another exchange joined the Euro bandwagon. Gemini, the Winklevoss twins’ exchange, has succeeded in getting approval from Irish regulators.

Recent rumors claim that Gemini has started offering cryptocurrency trading and custody services to Irish citizens. The exchange’s most recent action comes a few months after the Central Bank of Ireland gave its blessing.

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Now, users in Ireland can buy cryptocurrency through the exchange’s website or the mobile app. Over 100 cryptocurrencies are available for users to deposit or trade. You can buy cryptocurrency assets using either Euro [EUR] or British Pounds [GBP].

Additionally, Irish customers will be able to buy cryptocurrency via Apple Pay, Google Pay, debit cards, or even bank transfers.

Gillian Lynch Head of Ireland and Europe at Gemini further stated,

“Financial institutions, fintech, and other corporations in Ireland now have access to Gemini’s institutional-grade, a crypto-native platform through which they can access custody, clearing, trade execution, price discovery, and portfolio management services, all in one place.”

Gemini Garners Central Bank approval

As reported earlier, Gemini received the central bank’s blessing back in July. The exchange thereafter became Ireland’s first authorized provider of virtual assets.

Elaborating on the exchange’s latest move, Lynch stated,

“Ireland is an internationally recognized finance and technology hub that serves as a gateway to the wider European fintech market. We are excited to service the strong demand for accessible and secure crypto services among the highly educated and tech-literate consumer base here.”

She added that the exchange’s foray into the Irish market was built on “proactive and positive engagement” with the local regulators.

A number of platforms have been testing the waters in Europe, including Binance, Crypto.com, Coinbase, and others. Therefore, Gemini’s most recent action was not unexpected. The aforementioned discussions are likely to include Ireland in the upcoming days as well.

28% cryptocurrency tax proposal in 2023 Portugal budget

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The state of the cryptocurrency market is not ideal right now. Since the beginning of the year, it has been in a protracted bear market and declining. The current crypto bear market has seen some of the biggest losses in the industry. Adding to the dismal is the crypto tax being imposed in countries globally.

In its 2023 budget, Portugal will impose a 28% cryptocurrency tax, according to a Bloomberg article. The tax, which would be implemented for the first time in Portugal, is being pushed for inclusion in the budget for the following year.

The idea, according to authorities, aims to create standards so that Portugal may boast a system that encourages expansion of the local crypto industry. Portugal’s government wants to capitalize on the growing adoption of cryptocurrency across much of Europe.

The proposed legislation would impose a 28% crypto tax on all digital assets in Portugal, although not all of them would be subject to the new legislation. According to the announcement made on Monday, only virtual currencies purchased and held for less than 12 months would be liable to taxation.

The plan from lawmakers also maintains the tax exemption for digital assets held for more than a year. A 10% tax on free crypto transactions, which might include airdrops, was also proposed by policymakers. According to reports, the proposal also includes a 4% tax on the commissions paid by crypto brokers.

However, the budget must first receive approval from the Portuguese parliament before becoming a law.

Portugal’s history with cryptocurrency

Deputies from the Portuguese government spoke during a discussion of the State Budget for 2022. There were a number of up-front proposals. It was intended for the discussion to go on all week.

Different suggestions from various parties were turned down. One of many recommendations was the taxation of cryptocurrency. A news site called ECO Sapo reported in May 2022 that the taxing proposal for cryptocurrencies was rejected.

One of the most crypto-friendly nations in Europe, Portugal, recently announced that it would start taxing cryptocurrencies. The days of tax-free benefits for cryptocurrency investors in Portugal, according to many, are over.