Bitcoin suffered a sharp setback on Friday as news emerged of the impending failure of crypto bank Silvergate. Other cryptoassets fell away too as investors mulled what the news meant for the market more broadly, writes Simon Peters, cryptoasset analyst at multi-asset investment platform eToro.
Bitcoin began last week trading above $23,200, reaching above $23,600 on the eToro platform on Wednesday. But as news emerged last Friday around Silvergate the market took a significant knock, with the bitcoin price falling below $22,250.
Ether likewise began the week well around $1,625 before trading up to just above $1,650. On Friday however the cryptoasset plunged, taking it below $1,550 where it continues to trade in a relatively tight range.
Ethereum launched network upgrade EIP-4337 over the weekend, a new token standard first proposed in September 2021.
This upgrade has enabled Ethereum wallets to become ‘smart’ wallets and enables a series of features using smart contracts such as lost key recovery. Other benefits such as automated payments and time-based spending limits are now also possible.
Ethereum as a network has proven time and again to be among the most forward-thinking in the crypto space in terms of adaptation to demand and flexibility. The network is increasingly looking like a sophisticated payments and financial ecosystem for users and makes a compelling case for its usage.
The next upgrade, the so-called Shanghai upgrade which will enable users to withdraw staked ETH could be a gamechanger too. This is slated to appear some time this month and could have interesting implications for the market as a result.
Brazil records crypto market tax bounce
Brazilian Tax Authorities give an interesting early insight into crypto market movements as it collects tax information regularly. For January the country’s tax collectors witnessed a bounce in crypto market transactions of over 10% compared to December 2022.
The total level of transactions has yet to reach 2022 highs in the country however, but gives some insight into regional investors returning to the market after a volatile H2 in 2022.
In terms of the most transacted cryptoassets, Tether’s USDT stablecoin took the top spot as a key interfacing token for investors in the region. The stablecoin has benefits locally for Brazilians too as it protects purchasing power vs the US dollar and allows them to avoid expensive fees.
