Crypto weekly update
31. March 2022  • clock 5 min •  Daniel Mitrovsky

Institutional Demand Is Growing Again – Crypto Weekly Update

This week, the total market capitalization exceeded 1.93 trillion EUR. The increase at the 7-day interval is 8.42%. Bitcoin increased by 7.61% during the week to a current value of over 42,200 EUR. Bitcoin dominance is 41.5%.

Source: Coinmarketcap

Institutional demand is growing again

The institutional demand for cryptocurrencies is growing again. Various cryptocurrencies, including Bitcoin, reclaimed several key resistance points and skyrocketed to the highest levels of 2022. As a result of a recovery in the cryptocurrency market, the largest crypto funds have seen significant capital inflows from institutions.

According to the latest edition of CoinShares’ Digital Asset Fund Flows Weekly Report Volume 72, digital assets investment products saw inflows totaling $193 million last week, the largest volume since mid-December 2021.

Up to 76% ($147 million) of last week’s inflows came from companies in Europe, while inflows from the American funds were roughly 23% ($45 million).

Investors have traditionally invested most of their capital into Bitcoin, which saw a net capital inflow of $98 million. This catapulted year-to-date inflows to $162 million.

Solana also experienced significant capital inflows last week. Institutions invested $87 million into this innovative blockchain platform during the last week, representing Solana’s largest single week of inflows. Moreover, Solana is now the 5th largest investment product and the largest single altcoin other than Ethereum.

Other altcoins also thrived. Ethereum saw a capital inflow of $10.2 million last week, while Cardano and Polkadot saw inflows of $1.8 million and $1.2 million, respectively. Source

Rio de Janeiro will accept Bitcoin

Rio de Janeiro, a city with more than 6.5 million habitants, will officially start accepting Bitcoin payments for taxes related to urban real estate within their city limits.

The rollout of this initiative will place Rio de Janeiro as the first Brazilian city to make BTC payments mainstream. Supporting this cause led by the Brazilian Mayor Eduardo Paes, Binance CEO Changpeng Zhao announced the opening of a new office in the region.

“To enable the operation, the municipality will hire companies specialized in converting crypto assets into reais. In this way, the City Hall will receive 100% of the amount in the currency,“ Brazilian secretary Pedro Paulo stated. This suggests that the conversion from cryptocurrencies to Brazilian reals will be processed by Binance. Source

Ripple co-founder campaigning against Bitcoin

Ripple co-founder Chris Larsen, Greenpeace and other climate groups havelaunched a new campaign to change Bitcoin to a more environmentally friendly consensus model.

The “change the code, not the climate” campaign aims to pressure key industry leaders, Bitcoin miners and influencers like Elon Musk and Jack Dorsey into moving over to a new consensus model.

Greenpeace cites concerns that the energy required to mine Bitcoin comes mostly from fossil fuels and that miners are using coal waste and associated natural gas to fuel their operations. Greenpeace adds that Bitcoin could be inspired by Ethereum, which is in the final stage of a lengthy and complicated process of a new proof-of-stake mechanism.

Larsen stated he owns Bitcoin and Ethereum and wanted to see both cryptocurrencies succeed, but that Bitcoin is heading down an unsustainable path. He added that if he had concerns about Bitcoin as competition for Ripple, he would let it continue.

The likelihood of such an initiative becoming a reality is practically zero. Proof-of-Work is an established and especially safe way of reaching a consensus in the Bitcoin network. Chris Bendiksen, an analyst at Coinshares, said that: “I’d put the chance of Bitcoin ever moving to PoS at exactly 0%. There is no appetite among Bitcoiners to destroy the security of the protocol by making such a move.” Source

Ronin Network Victim of Hacker Attack

The crypto industry was hit by such negative news on Tuesday. The Ronin Network, which powers the popular blockchain game Axie Infinity, has fallen victim to one of the biggest hacks in the booming digital assets sector, where more than $600 million has been stolen.

On Tuesday, Ronin Network, a „bridge“ that allows users to transfer assets in and out of Axie, said it had discovered a security breach that resulted in 173,600 ether and 25.5 million USD Coin being removed by unidentified hackers from the system on March 23.

Ronin said it was “working with law enforcement officials, forensic cryptographers and our investors to make sure all funds are recovered or reimbursed”. The cryptocurrencies would be worth about $615mn at current prices.

The hack of Ronin joined a growing list of security breaches in the growing digital assets industry. For example, last August, a hacker stole more than $600 million of cryptocurrencies from the Poly Network program. Fortunately, it turned out that it was an ethical hacker who later returned the money. Source

MicroStrategy buys the dip

Michael Saylor, CEO of MicroStrategy, announced via Twitter yesterday that MacroStrategy, a subsidiary of business intelligence firm MicroStrategy, said it will purchase Bitcoin after obtaining a multimillion-dollar loan from Silvergate Bank.

In a Tuesday announcement, MicroStrategy said Silvergate issued a $205 million loan “secured by certain Bitcoin held in MacroStrategy’s collateral account.” The firm’s subsidiary MacroStrategy will be using the proceeds of the loan to purchase Bitcoin, pay fees and interest related to the loan and handle general corporate expenses.

Launched in 2020, the Silvergate Exchange Network leverage service allows firms to secure BTC-collateralized loans. MicroStrategy already owns 125,051 BTC, and it is expected that this number will increase again soon. Source

Grayscale may be suing SEC

Grayscale, the largest institutional digital assets manager, is reportedly considering suing the SEC.

In the coming months, the SEC will adjudicate on Grayscale’s application to transform the GBTC into a spot Bitcoin ETF. However, the Securities and Exchange Commission remains skeptical about spot ETFs and has denied a long list of crypto ETF applicants so far.

Grayscale CEO Michael Sonnenshein hinted in a recent interview with Bloomberg that if their application is rejected again, they could even sue the SEC, because they see no reason why spot ETFs can’t be approved.

The SEC’s reasoning for allowing Bitcoin futures ETFs while denying Bitcoin spot ETFs is related to the fact that its sister agency, the Commodity Futures Trading Commission, has regulatory oversight over derivatives exchanges. Neither agency has much in the way of regulatory power over the trading of Bitcoin. Source

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Daniel Mitrovsky


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