Bitcoin BTC price remains rooted near $23.5K

Bitcoin Holds Near $23.5K

Bitcoin continued its weekend camp near $23,500 into Monday as investors spent another day weighing fiendishly stubborn inflation and the prospects of the US Federal Reserve raising interest rates more aggressively than previously expected.

The largest cryptocurrency by market capitalization recently traded at $23,481, about level over the last 24 hours, but lower than the highs a week ago over $25,000 – before surprisingly strong jobs and price data left markets increasingly pondering the prospect of a rate of 50 basis points instead of 25 basis points.

“Markets have recently priced in rates that will stay high for longer than previously expected due to inflation rates that seem rather stubborn,” Brent Xu, CEO and co-founder of Web 3 bond market platform Umee, wrote in an email to CoinDesk. a possible 50 basis point increase could now also be in the offing.”

Still, Xu also noted with hope that cryptomarkets have not seen “massive pullbacks… which the more alarmist crypto Twitter commentators have been warning about.”

“I suspect we have not seen a massive pullback because the forced sellers have already sold,” he wrote, adding: “Last year’s chain of blowouts seems to have largely come to an end. This is not to say that we cannot lower from here. But a bottom to this cycle is probably in now, and in turn we’re probably in an accumulation phase. I think we should be prepared for sideways action for some time.”

Ether was almost flat for a while, changing hands at around $1,630. Most other major cryptocurrencies were flat or slightly down with layer 2 platform Polygon’s MATIC token and decentralized finance protocol Aave’s AAVE token both recently down about 3%. The CoinDesk Market Index, a measure of the overall performance of crypto markets, fell about 0.36%.

After a week to quickly forget, the stock markets returned to their winning ways, however small. The tech-focused Nasdaq, S&P 500 and Dow Jones Industrial Average (DJIA) all rose a few fractions of a percentage point. Treasury yields fell slightly, but remained eerily high at over $3.90 on a 10-year note.

To be sure, some crypto news Monday was ominous for markets, nothing more than a report from crypto asset manager CoinShares that short-bitcoin funds had $10 million in inflows in the week ending Feb. 24 and that long-bitcoin- funds bled $12 million, the third consecutive weekly outflow. And later in the day crypto exchange Coinbase tweeted that it would suspend trading in Binance USD (BUSD) from March 13 due to the stablecoin failing to meet listing standards – the latest blow to the stablecoin sector.

Still, at least one other analyst was at least partially bullish on crypto prices. In an interview with CoinDesk TV, Bruno Ramos de Sousa, head of emerging markets at crypto asset manager Hashdex, said the markets were “already in the recovery phase… past the bottom.” Ramos de Sousa has noticed an increasing interest from institutional investors in recent months.

“They are trained in the industry and they are looking for interesting windows to enter,” he said. “These are hedge funds, family offices, people dealing with bottoms and ups.”

Layer 1 Blockchain Conflux has a complicated relationship with China

Beijing is pro-blockchain, but anti-crypto. It considers the former a key technology, as important in the 21st century as the hypertext transport protocol (HTTP) is in the 20th century; the latter is a speculative asset that puts the brakes on the worst parts of capitalism.

Meanwhile, the “China” tokens are rising. “China” is in quotes because most of these projects like NEO, VeChain (VET), and Conflux (CFX) are doing everything they can to limit their exposure to China. They have development teams in China, but the company is registered offshore.

You can use the technology in the country, but not trade the token. For example, there is a version of NEO available on China’s Blockchain Service Network, but it exists as a separate universe from the NEO that the rest of the world sees to comply with local law.

In many cases, these tokens are separate from the project. You can’t see the Chinese data on-chain and it may be questionable what’s driving the token’s growth.

Conflux’s CFX token is the exception to this.

Can you trade Conflux’s CFX token in China? No.

Can someone in China communicate with the west-facing part of the Conflux chain? Also no, these parts are separate.

But at the same time, CFX is the bond that binds the two together.

“There is only one chain, but we have two spaces,” Fan Long, the co-founder of Conflux, told CoinDesk by email. “You can imagine the spaces acting like independent chains, but they share the same consensus engine. There’s no security risk in moving assets across two spaces.”

Within China, CFX relies on Conflux’s sponsorship mechanism, which allows regular users to interact with smart contracts without holding crypto. The stuff still exists on the chain minus the gas cost.

Developers of decentralized applications, such as the Chinese version of Instagram called “Little Red Book”, buy CFX directly from Conflux. They pay in fiat and receive an official receipt. In many ways, it would be similar to paying for a hosting bill for a cloud service.

“Because the public chain must have its own token that regulates its sources for gas, and China does not encourage anything related to fungible tokens, we choose to have foreign entities to regulate CFX token issuance,” Long said.

One can see on-chain how CFX is used. Below is the on-chain activity for a digital collectible, the Chinese version of a non-fungible token (which it calls “digital collectibles” and tolerates when no speculation is involved) on its version of Instagram.

In many ways, CFX can be seen as a proxy for success for Conflux in China. But is there enough interest to drive and sustain triple-digit growth on the CFX token?

The price of Solana (SOL) has surged over the past 24 hours after the protocol crashed over the weekend, freezing trades. The Solana Foundation said an investigation into the cause is underway and will be updated as new information becomes available. CoinDesk Managing Editor for Data and Tokens Danny Nelson provided an update and CoinFund Managing Partner Seth Ginns shared his response. Additionally, Chainalysis Director of Research Kim Grauer discussed the outlook for illicit crypto volumes in a new report.


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