GB Market Commentary 27/09/2021
by Jonas Luethy
Following last Friday’s news that China would once again ban crypto, BTC fell by nearly $5000, sending a shockwave through the market. Most coins have now recovered to their previous levels, with some analysts suggesting that bitcoin is forming a bullish pattern and could break out above 45k. Ethereum is back above $3000, and most altcoins are back in the green.
Many have criticised the dip last week as FUD (fear, uncertainty, and doubt) since China has already banned cryptocurrency many times before. This kind of news usually causes a short-term pullback in the market but doesn’t really impact the fundamentals in the mid to long run. Offshore Chinese exchanges such as Huobi are no longer accepting new customers from mainland China and are closing all Chinese accounts from December 31st. Decentralised exchanges Uniswap and Sushiswap have seen a surge in usage, which is likely a result of China’s ban on centralised exchanges. Since DEX’s only require a crypto wallet and no KYC, it is much easier to use and can be set up in a matter of minutes. Decentralised derivatives exchange DYdX has seen a massive influx of new users, with DYdX having a higher trading volume than Coinbase for the first time ever. China-based cryptocurrency reporter Colin Wu mentioned that an increasing number of Chinese citizens are taking an interest in DeFi and he expects more and more Metamask and DYdX users to come out of China.
The controversial $1 trillion infrastructure bill that was debated earlier this year is set to be put to a vote on September 30th. The bill, which would require tax reporting on virtually any entity related to crypto, has been heavily criticised by the crypto community and certain lawmakers amid fears the bill would stifle innovation within the space. From software developers and wallet providers to node validators, stakers and miners, these entities will have to report transactions to the IRS. Speaker Pelosi says she is confident that the bill will pass, as the bill aims to raise $28 billion dollars in tax revenue. There has been little real opposition to the measures that will be imposed on crypto, with only a handful of senators actively opposing the bill for reasons relating to cryptocurrency.
Finally, Cardano has announced 3 exciting new partnerships that will further it’s use-case for real-world activities. Software development firm COTI is creating an algorithmic stablecoin called Djed which CEO Charles Hoskinson has called a “game changer”. The Cardano network will also power the AI module of a new humanoid robot that will be used for healthcare and eldercare. The implementation of the Cardano blockchain will drastically improve the robots performance when processing biodata. Cardano has also partnered with Chainlink, an industry leading oracle service built on Ethereum. The native token LINK, is the 15th biggest by market cap and this partnership makes Cardano an even stronger contender as the Ethereum killer.