Decentral Block Post

Despite the myriads of state and federal regulatory hurdles faced by crypto businesses in the region, the United States plays a major role in preserving the Bitcoin (BTC) and crypto ecosystem. With China moving out of the picture following a permaban on crypto, the United States maintains the top position in terms of hash rate contribution and ATM installations worldwide. 

Prior to cracking down on BTC mining, China historically represented over 50% of the total hash rate up until Feb 2021. With China out of the competition, the US picked up the slack to become the highest BTC hash rate contributor — representing 37.84% of the total mining power by Jan 2022.

As shown above, Chinese miners resumed operations in September 2021. However, the miners in the US continued to dominate the space while increasing their hash rate contribution month-over-month. 

In addition, the US is home to the highest number of ATM installations, representing nearly 88% of the total crypto ATM installations worldwide. Over 90% of the overall crypto ATMs installed over the past several months are in the United States. Data from Coin ATM Radar confirms that the trend continues to July as the US saw the installation of 641 out of the 710 Bitcoin and crypto ATMs installed in the first 10 days of the month.

Further strengthening North America’s position in the crypto ecosystem, Canada represents the second-largest network of crypto ATMs after the United States. Outside of the Americas, Spain houses the highest number of crypto ATMs, 210 or 0.5% of the total active ATMs.

The economist Benjamin Graham, known to some as the father of value investing, once compared the market to a voting machine in the short run and a weighing machine in the long run. While Graham likely would have been skeptical at best about crypto and its built-in volatility had he lived to see it, his economic theory nevertheless applies to certain aspects therein.

Since the emergence of altcoins, the blockchain space has operated almost exclusively as a “voting machine.” Many projects have, by and large, been financially unsuccessful and even detrimental to investors and the space at large. They have, instead, turned crypto into a memelord popularity contest, and their success on that front can hardly be understated. Sometimes that competition is based on who promises the best future use case — but whether that future actually arrives is another issue altogether. Often it’s based on who markets themselves best, through sophisticated-looking infographics or ridiculous token names and a series of associated “dank” memes. Whatever it is, the success of the majority of projects is based on speculation and little else. This is what Graham was referring to as that “voting machine.”

So, what’s wrong here? Many prescient people have made life-changing money while playing the game, and the constant talk of funding and building potentially world-changing decentralized tech is the norm, so it seems like the space could be an ideal environment for founders and developers, right? It isn’t. These successes have often come at the expense of unsophisticated, desperately misguided investing rookies. Furthermore, most of that value ends up in the hands of the ubiquitous so-called vaporware merchants who propagate little more than misplaced value and broken promises. So, where is Graham’s weighing machine, and when will it start to enact its force? As it happens, right now.

Related: The decoupling manifesto: Mapping the next phase of the crypto journey

The crypto crash vs. the dot-com bubble

The dot-com bubble is an ideal historical precedent for our purposes. The two spaces share an exuberance to shoehorn developing tech into problems that don’t exist, excessive access to capital, ambitious promises with no hard tech backing them, and finally, a gross misunderstanding of what any of this is even about on the part of the investor (see the domain claims for pets.com, radio.com, broadcast.com, etc.)

Ether (ETH) price is up 16% since July 1 and has outperformed Bitcoin (BTC) in the last 7 days. The move could be partially driven by investors clinging to their hopes that the Ethereum network transition to proof-of-stake (PoS) consensus will be a bullish catalyst.

The next steps for this smart contract involve "the Merge," which was previously known as Eth 2.0. The final trial on the Goerli test network is expected in July before the Ethereum mainnet gets the green light for its upgrade.

Since Terra’s ecosystem collapsed in mid-May, Ethereum’s total value locked (TVL) has increased and the flight-to-quality in the decentralized finance (DeFi) industry largely benefited Ethereum thanks to its robust security and battle-tested applications, including MakerDAO.

Ethereum currently holds a 57% market share of TVL, up from 51% on April 8, according to data from Defi Llama. Despite this gain, the current $35 billion in deposits on the networks' smart contracts seem small compared to the $100 billion seen in December 2021.

Further supporting the decrease in decentralized application use on Ethereum is a drop in the median transfer fees, or gas costs, which currently stand at $1.32. This figure is the lowest since mid-December 2020 when the network's TVL stood at $13 billion. However, one might attribute part of the movement to higher use of layer-2 solutions such as Polygon and Arbitrum.

Bitcoin (BTC) rallied to the 200-week moving average on July 8, a level that could act as a battleground between the bulls and the bears. Several analysts are watching this level because a break and close above it could be the first sign that the bear market may be ending.

Bloomberg senior commodity strategist Mike McGlone said that Bitcoin’s 50-week and 100-week moving averages are showing similar signs as made before the 2018 bear market bottom. Therefore, McGlone expects Bitcoin to give a strong rebound in the second half of 2022.

Another positive sign is that Bitcoin rose above $22,000 on July 8 even as the United States dollar index (DXY) continued its northward march. This suggests that the strong inverse correlation between Bitcoin and the DXY may be starting to weaken.

Could Bitcoin extend its recovery pulling the crypto markets higher? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin broke above the resistance line of the symmetrical triangle and the 20-day exponential moving average (EMA) ($21,233) on July 7, indicating that bulls are making a comeback.

When it comes to nonfungible tokens, or NFTs, the subject is often a hit or miss for traditional gamers. While some players welcome the idea of being able to trade in-game digital collectibles for real money, others lament that NFTs could potentially take away the inherent entertainment built within games. So can NFTs contribute any additional value to traditional games, other than turning them into play-to-earn "moneymakers?"

To answer this, Cointelegraph Markets Pro spoke to Enjin's chief technology officer and co-founder Witek Radomski via an ask-me-anything session. Enjin offers a comprehensive suite of products for creating, tokenizing, trading, distributing and integrating NFTs into the virtual world of GameFi. Notable projects using the service include Lost Relic. In addition, Microsoft Azure is working with Enjin to gamify their developer experience with Azure Heroes NFTs. When asked about the future of GameFi, Radomski explained that it's difficult to build a good-looking game that's also fun to play, and it's even harder to grow a community around a game that sticks:

"We'll experience a renaissance of blockchain gaming once things settle down with the bear market and more established developers focus on fun games, NFT utility and thinking beyond simply earning crypto coins through playing a game."

Radomski is a big believer in using NFTs to gamify businesses. "Anywhere you can grant users access, special experiences, or exclusivity, NFTs are amazing. Nearly everyone online is creating some kind of digital content these days, and easy-to-use NFTs can help people give history, ownership, digital rights, and utility to everything being created." Radomski elaborated that NFTs fit specifically into this niche as game developers are constantly creating insanely cool games and content and need a way to present their idea to gamers that's immutable. In addition, he emphasized their role in validating one's digital identity in the face of a looming impersonation crisis:

"In a couple of years, bots can perfectly deepfake any human or artwork. Artists, designers, and musicians may have identity crises where celebrities, politicians, game streamers, and eventually, ordinary people will be constantly scammed by them. If you value your digital identity, your consciousness, and your validity in the new society, blockchain is the only thing that can both prove you created something."

Elon Musk’s tunnel construction firm The Boring Company (TBC) has begun allowing customers to pay for rides on its Las Vegas transit system using Dogecoin.

A July 6 report from CNBC said the new payment option via Bitpaysurfaced on Friday, a day after the opening of its new Loop station at the Las Vegas Convention Center.

While the Boring Company has not officially confirmed the new payment method, founder Elon Musk seemingly did when he responded to a tweet about the news, saying: “Supporting Doge wherever possible.”

On the same day, DogeDesigner, a graphic designer for Dogecoin Foundation, shared a video with his 13,600 Twitter followers with him navigating through the Vegas Loop booking page and making a purchase of a day-pass using 37.52 DOGE via BitPay.

The new Loop station is located underneath an integrated resort called Resorts World Las Vegas, and is the fourth stop on the 1.7-mile Las Vegas Convention Center Loop. 

Bitcoin (BTC) is attempting to rise above the psychological level of $20,000 on July 6, a sign that bulls are trying to stall the brutal bear market. The retail traders are making the most of the current fall and are on a buying spree. Proof of this comes from Glassnode data showing that wallets holding less than one Bitcoin scooped up 60,460 Bitcoin in June, at “the most aggressive rate in history.”

In a recent report, Glassnode analysts said that the activity on the Bitcoin network shows that “all speculative entities, and market tourists have been completely purged from the asset.” This means that mostly long-term investors are left holding Bitcoin.

However, not everyone is bullish about Bitcoin’s prospects in the short term. According to Arcane Research, the ProShares Short Bitcoin Strategy ETF (BITI), the first exchange-traded fund (ETF) to be "short" Bitcoin, has increased its short exposure “by more than 300% last week.”

Could the rush into the first inverse Bitcoin ETF act as a contrarian signal that indicates a possible bottom formation? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin is trading inside a symmetrical triangle pattern. The buyers tried to push the price above the resistance line of the triangle on July 5 but the bears held their ground.

The cryptocurrency market has experienced a turbulent period as of late, with several firms filing for bankruptcy or shutting down. Voyager Digital announced its bankruptcy on Wednesday, becoming the second crypto lender to default following Three Arrows Capital.

In the light of present market circumstances, Circle has sought to reaffirm its commitment to openness and user security in a blog post published on Tuesday. Jeremy Fox, CFO of Circle, said that his firm's priority is to preserve the financial integrity of the system - robust, trustworthy, and safe. He added that other financial institutions offer fraudulent promises of preserving user money, only to abandon them when the going gets tough.

The CFO said that Circle's business model is to minimize risk, not “taking and managing risk.” He also explained how the firm protects its USD Coin (USDC) reserves, emphasizing that Circle does not own these assets and that they are 100 percent owned by USDC holders in segregated accounts labeled "for the benefit of USDC holders." Fox wrote:

"Circle is not allowed to use the USDC reserves for any other purpose. Unlike a bank or an exchange or an unregulated institution, we cannot lend them out, we cannot borrow against them, and we cannot use them to pay our bills."

As a result, in extreme situations like bankruptcy, the USD Coin (USDC) is purportedly still redeemable at face value. Also, the USDC reserves are completely disconnected from Circle's other activities, minimizing the risk of them being used to covering other losses.

Despite the Chinese government banning all kinds of cryptocurrency transactions last year, some firms apparently still use stablecoins like Tether (USDT) to pay their employees.

Beijing’s Chaoyang District People’s Court has ruled that stablecoins like USDT cannot be used for salary payments, the local news agency Beijing Daily reported on July 6.

The Chinese court stated that virtual currencies like USDT cannot circulate in the market as a currency, which requires all employers to only pay their workers using the official currency, renminbi (RMB).

The ruling came as part of a court case involving a staff member at a local blockchain firm suing his employer for not agreeing to pay his wages in RMB. The plaintiff argued that instead of paying him in RMB, the firm had paid his salary and bonuses in the USDT stablecoin.

Citing China’s blanket ban on crypto enforced in September 2021, the court pointed out that digital currencies like USDT do not have the same legal status as legal tender. The court noted that the plaintiff's request to pay wages and bonuses in the form of RMB fully complies with local laws and the court supports it.

An average crypto asset holder in Great Britain would be young, male and hodler. And they would consider crypto to be a ‘fun investment.’ Such are the findings from the fresh research, conducted by Her Majesty Revenue and Customs (HMRC) with the help of research agency Kantar UK and published on Tuesday. 

Taking a quantitative approach, the research sought to establish the prevalence of owning crypto assets, the types and amounts held, and the platforms individuals use to buy crypto assets. It consisted of a survey with a representative sample of 5,916 United Kingdom adults, including 713 crypto asset owners.

The report revealed that 10% of the U.K. citizens hold or have held crypto, with 55% never having sold any (equivalent to 5% of the adult population). Only 7% are currently holding more than £5,000 (almost $6000 by press time) in value, while 52% of current owners have holdings of up to £1,000 ($1200).

Related: UK government seeks public input on DeFi taxation

Other significant findings come as no surprise — crypto owners tend to be younger than the general population with 76% of them 45 years, and mostly they are male (69%). A vast majority of them hold cryptocurrencies (79%), while the second most popular type of asset is utility tokens (20%).