This Week in Crypto: Bitcoin Surges Past US$46K, Hits 3-Month High

28th March 2022
This Week in Crypto: Bitcoin Surges Past US$46K, Hits 3-Month High
John Angel, Unsplash

Bitcoin was up by nearly 5% on Monday, building on incremental gains throughout the past week.

At the time of writing, Bitcoin (BTC) is trading at US$46,846.53 (+4.78%) while Ethereum (ETH) is trading at US$3,302.70 (+4.60%). Altcoins, including the SoLunAvax trio, have also been trading in green over the past 24 hours.

BTC 24-Hour Chart. Data: CoinMarketCap

BTC LFG!

BTC’s gains may also be due to unconfirmed reports that Singapore-based nonprofit Luna Foundation Guard (LFG) purchased US$125 million worth of BTC this week, after its announcement last month that it will create a BTC-denominated reserve as an additional layer of security for UST, Terra’s US dollar-backed stablecoin.

“Asia morning BTC pump seems to have been triggered by another US$125 million purchase of BTC by Luna Foundation Guard”, said Singapore-based crypto trading firm QCP Capital in a Monday market update.

On that same note, Terra-based DeFi protocol Anchor announced that it will adjust interest rates each month following a community vote that passed on Thursday.

Anchor currently pays its depositors up to 20% yield from lending the TerraUSD stablecoin (UST) to borrowers in addition to staking rewards on their collateral. For every new UST created, US$1 worth of LUNA is burned on the Terra blockchain.

However, concerns over the rate’s sustainability have surfaced, after Anchor’s community noticed the protocol was burning its yield reserves at a faster speed to maintain the high yield.

A drop in rate will prompt a drop in UST demand, which means that the stablecoin’s ability to maintain its peg could be at risk.

With the new proposal, the protocol’s payout rate change will be capped at 1.5%. Payout rates would increase by 1.5% if yield reserves increase and decrease by 1.5% if yield reserves fall by 5%.

South Korea exchanges implement “travel rule

Meanwhile South Korea has moved to enforce the “travel rule” – a virtual asset-tracking regulation recommended by the global anti-money laundering agency the FATF (Financial Action Task Force) last year.

The Travel Rule is applicable when VASP (virtual asset providers) transfer virtual assets worth KRW 1 million (US$819) or more to another VASP upon a user’s request – the names of senders and receivers as well as wallet addresses have to be passed on to the receiving VASP.

VASPs are now obliged to keep relevant user information on senders and receivers for five years, or face a fine of up to KRW 30 million (US$24,600).

The travel rule has been applicable since January 2020 to all crypto exchanges in Singapore with a payment services license, regardless of transaction amount.

Trading Volume

The global crypto market cap is US$2.11 trillion, a 4.12% increase over the last day. The total crypto market volume over the last 24 hours is US$91.40 billion, which makes a 47.63% increase. The total volume in DeFi is currently US$10.68 billion, 11.69% of the total crypto market 24-hour volume. The volume of all stable coins is now US$72.34 billion, which is 79.15% of the total crypto market 24-hour volume.

Fear & Greed Index

The Crypto Fear and Greed Index uses 5-6 measurements to assess the current sentiment of the market and then rates that level of emotion on a scale of 1 to 100 – 1 is extreme fear and 100 is extreme greed.

The current score of 60 (Greed) is a significant increase from last week’s score of 30 (Fear). More consolidation above US$46,000 for Bitcoin is likely to sustain the bull run. However, the cryptocurrency market has traditionally performed better at the end of the quarter, which means that more volatility could be on the cards amid a hawkish outlook.

Written by Bread News Team
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