Whilst Bitcoin holds the $43,000 level as support, Bitcoin adoption continues to expand at a tremendous pace. Two more territories are adopting Bitcoin as legal tender, following El Salvador’s integration in September 2021.
These territories are Madeira, an autonomous region in Portugal and Prospera, which is a jurisdiction on the Roatan island off the northern coast of Honduras.
Furthermore, Strike announced that Shopify are integrating the Bitcoin Lightening Network at the Bitcoin 2022 Conference in Miami. This is THE cryptocurrency event of the week, if not the month, with many hedge funds we know also attending. Strike CEO Jack Mallers said Strike have also partnered with NCR, the world’s largest point-of-sale (POS) supplier, and payments firm Blackhawk. This means you will be able to pay across the Lightning Network at millions of American storefronts. This is a huge milestone for Bitcoin and one which I think is crucial for the expansion of the network.
The metaverse continues to see progress with institutional interest as Volkswagen have joined the bandwagon. They have begun an interactive advertising campaign for their latest Polo model IQ.Drive which will be co-ordinated in the metaverse.
Furthermore, the Starbucks CEO has confirmed the $96 billion company will enter the metaverse this year, potentially with an NFT marketplace. Seen as the biggest NFT marketplace, OpenSea, is $13 billion in comparison, there is significant scope for businesses like Starbucks to developing businesses related to NFTs and the metaverse.
Lael Brainard is stating the obvious
The Federal Reserve’s Lael Brainard has said that the central bank needs to start acting quickly and aggressively to fight inflation. She said that the Federal Reserve could start reducing the balance sheet as soon as May and at a rapid pace.
As Brainard is typically dovish, meaning she normally favours low rates and accommodative policy, global markets including Bitcoin reacted negatively earlier in the week. “I think this is an over-reaction from the markets, as Brainard pointed out things that we are already aware of,” noted Marcus Sotiriou, an analyst with UK digital asset broker GlobalBlock.
Brainard also confirmed that the Federal Reserve wants to raise rates steadily and methodically, indicating that they will raise rates by the planned 0.25% in May. Federal Reserve Chairman Jerome Powell has said that he will try to emulate a tightening cycle like that of 2004 where the Federal Reserve raised rates by 0.25% 17 times.
“Therefore, unless inflation data being released next Tuesday on April 12th is significantly worse than expected, I am not concerned with how aggressive the Federal Reserve will be in the short term,” added Sotiriou.
CoinShares reports further inflows into US funds
Institutions have been largely unfazed by the macro headwinds recently, as cryptocurrency funds attracted inflows for the second consecutive week, according to a report from CoinShares. Around 99% of the inflows went into European funds, with some into Americas-based funds. Crypto funds saw $180 million of net inflows last week, which was lower than the $244 million of inflows during the prior week, yet still the second highest number of inflows in 17 weeks.
Big news of the week, which we’ll be looking into further is the UK government’s plan to make the country a global crypto hub. This plan includes establishing a regulatory framework for crypto, regulating stablecoins, and working with the Royal Mint to create a non-fungible token (NFT) to be issued by the summer.
UK Chancellor Rishi Sunak said, “It’s my ambition to make the U.K. a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate, and scale up in this country….We’re on the cusp of something important…we have the opportunity to shape and lead it.”
“This is a promising step for the U.K. as it seems as though they are beginning to understand the opportunity that presents itself by being open and accommodative of the unstoppable revolution,” noted Sotiriou.
