Cryptocurrency markets were rattled on Friday as it emerged that China is implementing a complete ban on crypto-asset trading within the country. Despite announcing the ban earlier, markets reacted poorly with significant drops in bitcoin and other altcoins.
BTC last week entered a downtrend and already hit a low of $40,500 by Wednesday morning, but it was steadily recovering until news from China fell more than 8% on Friday. The price then stabilized before Sunday’s jump and is back at over £44,100 this morning.
Similarly, ETH hit a weekly low on Wednesday, touching £2,700 before rallying again to over $3,100. After dropping more than 9% on Friday, ETH then stabilized with BTC over the weekend and is trading again at over $3,100 this morning after strong gains on Sunday.
Twitter launched encryption features
Social media platform Twitter has launched a series of crypto-related features on its platform.
Users will now be able to guide popular Bitcoin tweeters through Strike, a third-party payments app built on the Bitcoin Lightning Network. Twitter users in iOS will now have access to the Tips feature while the platform says it will roll out Android functionality soon.
The company is also looking to make non-fungible tokens (NFTs) more prominent on the platform, giving creators more tools and moderation functions. Twitter says it is exploring NFT authentication that will allow users to link their crypto wallets directly to their social media accounts in order to display their owned artwork in their profiles.
Sorare secures $680 million in seed funding from SoftBank
Market NFT Sorare announced Wednesday that it has secured a massive $680 million funding round led by high-profile Japanese technology investment firm SoftBank.
Sorare is a marketplace for non-fungible tokens (NFTs). The platform is now valued at around $4.3 billion following its Series B funding round. SoftBank led an earlier round of investment in July, injecting $532 million. The company plans to use the new cash injection to expand NFT’s sports offering.
The company will expand its football portfolio of NFTs by seeking partnerships with football associations and associations. It has already made deals with French heavyweight team Paris Saint-Germain, English Premier League champions Liverpool, and La Liga.
Sorare is also looking to diversify NFT’s offering, exploring sports outside of football. Problems have arisen among other sports, however, major leagues such as the NFL in the United States specifically prohibit players and clubs from creating or selling NFTs.
Evergrande is causing a reckless week for the cryptocurrency markets
The news focused heavily on events in China in the past week, with cryptocurrencies not being immune to permutations.
Early in the week, news began emerging of the Evergrande crisis causing the infection to spread to all markets. Crypto assets felt the effects as the broad sell-off continued on Monday.
Evergrande has significant debt exposure – more than $300 billion – and has failed to make timely payments to its creditors. The implications for the broader crypto markets are not direct, but with debt concerns looming, crypto assets like Tether may be affected.
Stable currencies such as Tether are linked to fiat currencies such as the US dollar. But to maintain the correlation, it takes holdings that match the value of the crypto asset. Many cannot hold large amounts of cash and instead use commercial paper – a form of short-term debt – to calculate value.
The problem here is that with Evergrande creating a 2008-style contagion risk for debt markets, stablecoins could run into problems if the commercial paper they hold loses value. Unfortunately, since such a crisis is unprecedented, it remains to be seen what happens next.
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Crypto assets are volatile instruments that can fluctuate widely in a very short time frame and are therefore not suitable for all investors. Unlike CFDs, crypto-asset trading is unregulated and therefore not supervised by any regulatory framework in the European Union. Your capital is at risk.
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