Virtual currency market analysis [February 15]

Cryptocurrency Practical Investment Article February 15

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【Awarded 5th place in MagMag Newsletter Awards】

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and we were able to win a prize.

（Reference）2020 MagMag cryptocurrency newsletter won 5th place in the Asset Management category!!

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https://bitcoin-newstart.com/2020magmag

【Crypto Market Analysis】

The price fluctuation of cryptocurrencies since last week

over one week is summarized as follows

Display: current price (change from one week ago)

Bitcoin5,000,000 yen (0％）

Ethereum360,000 yen(0%）

Ripple96 yen（-5％）

Cardano126 yen（-7%）

Polkadot2300 yen（-9%）

Binance Coin49,700 yen(5％）

Solana12,000 yen(-10%)

Avalanche 10,300 yen(10%)

Uniswap1,300 yen（-6%）

ICP　2,500 yen（-6％）

Bitcoin fell from last week’s 5,000,000 yen to a brief down adjustment, and then returned to the same level as last week.

Bitcoin daily chart

Last week we mentioned that Bitcoin might be in a range market; the 5,000,000 yen level is a price milestone, and it could be said that it entered a range of 4,800,000 to 5,200,000 yen with this price near the upper bound.

Of course, whether it will continue to move within this band or break up or down will become clear only in the moment, but for now there doesn’t seem to be a definite direction.

Yesterday, news that Russia withdrew troops from Ukraine caused Bitcoin to rise slightly, while gold fell instead.

Usually gold is considered a safe asset, so perhaps that’s why it dropped as a safe-haven asset; yet Bitcoin, despite being known as digital gold, rose in price as well.

Compared with before, it is starting to move similarly to the stock market.

【Bitbank adopts Bitcoin’s Lightning Network】

Bitbank, a domestic exchange I also use, has adopted the Lightning Network (LN).

https://www.itmedia.co.jp/business/articles/2202/16/news029.html

The Lightning Network enables fast transfers with very low fees and is currently used in El Salvador for small payments.

For small payments at vending machines and at McDonald’s, etc., it is actually used, but this time Bitbank hasLNadopted it.

Regarding Bitcoin, for example, for large remittances overseas there is no need to use LN (even compared to international transfers, ordinary transfers already have significant advantages); however, for everyday payments, LN will be highly important.

Therefore, it is expected that Bitbank’s app will be able to pay using the Lightning Network in the future as well.

【GMOCoin listsMKR and StablecoinDAI listing】

GMOCoin is a major domestic exchange, but it is said to have strict requirements for overseas remittances. They have adopted the stablecoinDAI.

DAI is said to be an algorithmic stablecoin, pegged to the dollar.

The fact that they adopted thisDAIhas become a major topic among investors due to the advantages for overseas remittance.

When trading overseas, during profit-taking people often use dollar-pegged stablecoins, soDAIis helpful in such cases. Also, withDeFi (decentralized finance) and other platforms, you can deposit stablecoins likeDAIto earn interest, making this stablecoin highly user-friendly for transfers to exchanges as well.

Previously, people would exchange on exchanges like Binance to domestic currencies, then transfer domestically and quickly convert back to JPY; but this always involved price fluctuations of intermediate currencies, making procedures more cumbersome.

Also, even people who trade only domestically can hold money in JPY and convert to a dollar-peggedDAI when holding overseas currencies, and convert to DAI during profit-taking to benefit from a weaker yen and stronger dollar, increasing assets further,

In just under a year, the yen has weakened about 10% against the dollar; if you held 10,000,000DAI, you would have become effectively 11,000,000 yen plus 1,000,000 yen.

From the middle of 2020, cryptocurrencies rose substantially, so those who held profits in stablecoins benefited not only from crypto gains but also from the yen weakness against the dollar.

With this in mind,GMOCoin has attracted investor attention.

https://news.yahoo.co.jp/articles/86f1077bd631e469c4d7fe0bc562b67a509db6e1

【JP Morgan: Bitcoin could be as high as $150,000】

U.S. major financial institutionJPMorgan said that Bitcoin could potentially reach $150,000 (about 16 million yen) in the future.

JP Morgan’s price fluctuations are well known, but with regulations for BitcoinETFand the like becoming more established, I personally think 10 million yen may be a milestone price.

In the long term, opinions among experts vary between 50 million and 100 million yen; it is worth watching what role Bitcoin, as a digital asset, will play compared with traditional finance.

https://forbesjapan.com/articles/detail/45815

【Are Hackers Targeting Ethereum?】

“The structure of stolen crypto assets from North Korea has dramatically changed. The share of Bitcoin remains around 20%, while Ethereum has risen to 58%. With more asset variety, laundering has also become more complex.”

https://news.yahoo.co.jp/articles/64553ba9a472d91137d99465104cbdebfdf697c1

As such, there have been reports that North Korea previously stole Bitcoin from neighboring countries like South Korea, but recently news indicates Ethereum has been stolen more frequently.

The exact reason why it is Ethereum in particular is not stated, but personally:

○Ethereum’s performance in recent years has been outstanding even when compared to Bitcoin

○DeFiandNFT use cases have become globally widespread, strengthening Ethereum’s ecosystem

○Its market capitalization is still smaller than Bitcoin’s, and its price increase may be higher

Many experts think it may surpass Bitcoin in market cap

For these reasons.

There are said to be many other reasons, but Ethereum is undeniably a very compelling asset as a real-use case.

【El Salvador’s rating downgraded】

“ Fitch downgraded El Salvador’s rating from B- to CCC, explaining that the country’s short-term debt dependence and the imminent $8 billion global bond payment (about 920 billion yen) increased financing risks.” 

The country’s President Bukele’s unorthodox political moves, such as conducting Bitcoin transactions using public funds on his phone, have led investors and rating agencies to view the country more skeptically.

https://www.bloomberg.co.jp/news/articles/2022-02-10/R72AXNT0G1KX01

El Salvador has been adopting Bitcoin as legal tender since 2021 and has actively been making purchases.

Judging by the timing of these purchases, it seems likely that a seasoned investor has been providing advice rather than amateurs.

If they continue with only the dollar as legal tender and rely on IMF loans, and face high remittance costs from abroad, it is unlikely that there will be significant improvements.IMF funding could continue to pose issues.

If Bitcoin’s price rises significantly in the future, El Salvador’s assets could grow substantially, and it will be worth watching how the country develops economically and how citizens’ lives change, as well as how other developing countries perceive this.

Personally, I am paying close attention.