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3.16 AI Daily The cryptocurrency market ushered in a new climax, and the regulatory policies of various countries accelerated their implementation
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I. Headlines
1. Bitcoin futures crossed the $100,000 mark for the first time, triggering a chain reaction
Bitcoin futures crossed the $100,000 mark for the first time in the last 24 hours, triggering a massive liquidation. The data shows that more than $505 million of Bitcoin futures positions have been liquidated in the past 24 hours. Still, analysts expect the Bitcoin spot price to reach $100,000 by the end of the year, as global demand for bitcoin and monetary policy easing are increasing.
At the same time, Donald Trump's new administration has vowed to prioritize cryptocurrency policy, which is one of the main reasons why bitcoin has skyrocketed by more than 44% since the election. Condé Nak Fitz's CEO, Howard Lutnick, who has also been nominated by President-elect Donald Trump for secretary of commerce, has been a significant supporter of cryptocurrency, which could shape a more favorable regulatory framework and boost market confidence.
2. Hong Kong Securities and Futures Commission: 15 applications for virtual asset trading platform licenses are being processed
Dr Yip Chi-hang, Executive Director of the Intermediaries Division of the Securities and Futures Commission of Hong Kong, said that virtual assets are now at the top of the agenda of every financial regulator. Three virtual asset trading platforms have been licensed in Hong Kong and 15 virtual asset trading platforms are being processed.
This initiative aims to provide investors with more diversified asset allocation options, while ensuring that trading activities are strictly regulated. Hong Kong is picking up its pace to compete with other financial hubs, attracting crypto companies to set up operations there. The support of the regulator will lay the foundation for Hong Kong to become a cryptocurrency hub in Asia.
3. Ripple XRP is expected to break above $2 and lead the crypto bull market
Ripple XRP has recently emerged as a frontrunner amid the rise in cryptocurrency prices, bringing tremendous growth to investors and driving optimism. In less than three weeks, the XRP price has soared by an incredible 225%, and the momentum continues.
If the important support level is maintained, the analyst's target will be $2. This level has not been broken since 2018. XRP's rise is largely due to its key role in cross-border payments and decentralized finance, as well as regulatory policies that support blockchain adoption. However, overall market conditions, economic factors, and the development of the Ripple ecosystem can also have a significant impact on the results.
4. The state of Texas requires certain crypto miners to register and report information such as electricity demand
According to rules recently passed by the Texas Public Utilities Commission (PUCT), Bitcoin miners who use the grid maintained by the Texas Energy Reliability Commission (ERCOT) must share their facility's location, ownership information, and power needs with state agencies.
Miners have only one business day to register from the date their facilities are connected to the ERCOT grid and must renew on or before March 1 of each year. ERCOT is an independent system operator that accounts for 90% of the state's electricity load.
This regulation aims to strengthen the regulation of crypto mining and ensure that its operations do not unduly strain the power grid. It also reflects that the authorities are closely monitoring the development of this emerging industry and taking proactive measures to manage its impact.
5. Research Institute: AI proxies have great potential in DeFi advisory, consumer services and other fields
In a recent report, the Institute discussed the integration and synergy between blockchain technology and AI (AI). The report notes that the adoption of AI agents in areas such as decentralized asset management and community-driven governance is growing, with some potential use cases including:
However, the report also points out that AI agents face a number of challenges that need to be addressed, such as scalability limitations, privacy and security risks. Only by continuing to innovate can AI agents reach their maximum potential in the blockchain space.
II. Industry data
1. PI
Last traded at $1.4404, down -14.40% on the day.
2. BTC
Last traded at $83882.3000, an intraday gain of +2.00%.
3. XRP
Last traded at $2.3966, an intraday gain of +4.40%.
4. GT
It was last traded at $21.4170, an intraday gain of +4.20%.
5. TON
It was last traded at $2.9170, an intraday gain of +4.30%.
3. Industry news
1. The price of bitcoin met resistance at the $85,000 mark, and investors were cautious
Bitcoin is facing resistance at $85,000 and the RSI is below 60, indicating upside potential. The previous rejection at $92,000 led to a pullback, but the current buying pressure could lead to a breakout. Traders are keeping a close eye on Bitcoin's performance at these key levels to predict potential market movements and future price trends.
Analysts noted that bitcoin met resistance at $85,000, mainly due to cautious investor sentiment. Although the demand for bitcoin remains, the decline in trading volume indicates that market participants are waiting on the sidelines. If Bitcoin is unable to break above this key resistance level, it could trigger a further pullback.
On the other hand, the Bitcoin options market shows moderate optimism, with a bearish/bullish ratio of 0.72, indicating that traders expect the price to rise. However, the large number of put positions also reflects the market's concerns about future volatility. Overall, there is still uncertainty about Bitcoin's short-term trajectory, and investors need to keep an eye on the performance of key support and resistance levels.
2. Ethereum is under selling pressure, but the long-term outlook remains bullish
Ethereum has experienced significant selling pressure over the past 24 hours, with the price briefly falling below the $2,000 mark. Analysts say this is largely due to the massive sell-off by whale investors. The data shows that 420,000 ETH has been transferred to exchanges in the past week, possibly to cash out.
Still, Ethereum's long-term outlook remains bullish. Ethereum's upcoming Pectra upgrade is designed to improve scalability and is expected to attract more users and developers to the ecosystem. In addition, as applications such as DeFi and NFTs continue to grow, so does the utility of Ethereum.
Some analysts believe that the price of Ethereum has found strong support near $1,886. If it can hold this key support level, Ethereum is on track to retest the all-time high of $3,000 in the coming months. However, investors also need to be wary of potential downside risks, especially against the backdrop of increasing regulation.
Overall, Ethereum's long-term outlook remains positive, but there may be some volatility in the near term. Investors need to pay close attention to market dynamics and make investment decisions based on their own risk appetite.
3. The Solana ecosystem continues to heat up, and SOL prices are supported by capital inflows
The Solana ecosystem has continued to heat up recently, and the price of SOL has also been supported by capital inflows. According to the data, in the past 24 hours, the net inflow of SOL spot funds reached $33.54 million, ranking first.
Analysts believe that the continuous heating up of the Solana ecosystem is mainly due to its advantages of high throughput and low fees. As more and more DeFi projects and NFT projects choose to deploy on Solana, the ecosystem continues to grow in activity, thus attracting more investors' attention.
However, the Solana ecosystem also faces some challenges. Recently, there has been a heated debate in the Solana community about inflation, but in the end, the proposal was not passed. This has raised concerns among some validators about the future prospects of Solana.
Overall, the Solana ecosystem is still a force in the cryptocurrency space, and its development prospects are worth paying attention to. But investors also need to pay close attention to the dynamics within the ecosystem, as well as potential risk factors.
4. Project News
1. Sui Network: The new star of the Move ecosystem continues to make efforts
Sui Network is a brand new blockchain project created by engineers who worked on the Diem project. Powered by the Move programming language and an all-new execution engine, it is designed to deliver high throughput, low latency, and high scalability.
What's new: Sui Network recently released its mainnet beta, introducing several innovative technologies. These include a new parallel execution engine, Narwhal, and a Trie-structured object model that promises significant increases in throughput and scalability. At the same time, Sui also launched a native USDC stablecoin to lay the foundation for ecological construction. In addition, Grayscale Trust has also announced that it will launch a Bitcoin trust product on Sui.
Market Impact: As a rising star in the Move ecosystem, Sui's emergence has injected new vitality into the development of blockchain. Its innovative technology is expected to solve the performance bottlenecks currently faced by blockchains and pave the way for large-scale adoption. At the same time, Sui also brings new development opportunities to the Move ecosystem, which is expected to attract more developers and projects to settle in.
Industry feedback: Industry insiders are optimistic about Sui's technological innovation and development prospects. Haseeb Qureshi, a well-known investor, said that Sui is expected to become a masterpiece of the next generation of blockchain. Delphi Digital analysts believe that the emergence of Sui will promote the further development of the Move ecosystem and bring new opportunities to the entire cryptocurrency industry.
2. Aptos: A high-performance blockchain built by a former metaverse engineer
Aptos is an emerging blockchain project created by former Meta employees that aims to offer high throughput, low latency, and high scalability.
What's new: Aptos recently announced the closing of a $350 million funding round led by renowned investor a16z, PayPal founder Peter Thiel and others. At the same time, Aptos also released a beta version of its mainnet, introducing a number of innovative technologies, including smart contracts based on the Move language, a parallel execution engine, and a new consensus mechanism.
Market Impact: As a high-performance blockchain built by former metaverse engineers, the emergence of Aptos has brought new development opportunities to the entire industry. Its innovative technology is expected to solve the performance bottlenecks currently faced by blockchains and pave the way for large-scale adoption. At the same time, Aptos has also injected new vitality into the Move ecosystem, which is expected to attract more developers and projects to settle in.
Industry feedback: Industry insiders are optimistic about Aptos' technical strength and development prospects. Chris Dixon, a well-known investor, said that the Aptos team has a wealth of engineering experience and is expected to build a truly high-performance blockchain. Delphi Digital analysts, on the other hand, believe that the emergence of Aptos will propel the entire blockchain industry forward, paving the way for large-scale adoption.
3. Movement: The first public chain mainnet of the Move ecosystem was launched
Movement is the first public chain project in the Move ecosystem, launched by Mysten Labs to provide infrastructure support for the Move ecosystem.
What's new: Movement recently announced the official launch of its public mainnet beta, the first public mainnet launch in the Move ecosystem. The Movement mainnet employs an innovative HotStuff consensus mechanism and supports the deployment of smart contracts and decentralized applications. At the same time, Movement also launched its native token, Mov, which is used to pay fees and incentivize network participants.
Market Impact: As the first public chain in the Move ecosystem, the launch of Movement marks a new stage of development for the ecosystem. It provides developers with a decentralized infrastructure platform that is expected to drive more innovative applications. At the same time, Movement also brings new development opportunities to the entire blockchain industry, which is expected to promote the further development of the Move ecosystem.
Industry feedback: Industry insiders welcomed the launch of Movement as an important milestone in the development of the Move ecosystem. Haseeb Qureshi, a well-known investor, said that the emergence of Movement will bring new vitality to the Move ecosystem, which is expected to attract more developers and projects to settle in. Delphi Digital analysts, on the other hand, believe that the launch of Movement will propel the entire blockchain industry forward, paving the way for large-scale adoption.
V. Economic dynamics
1. The Fed raised interest rates by 25 basis points, sending hawkish signals
The U.S. economy experienced persistent inflationary pressures in 2022, with inflation climbing to its highest level in 40 years. In an effort to curb inflation, the Fed has raised interest rates eight times in a row since March last year, bringing the federal funds rate from near zero to the current range of 4.75%-5%.
In its latest interest rate decision on March 22, the Fed raised interest rates by another 25 basis points, raising the target range for the federal funds rate to 5%-5.25%. Although the rate hike was narrower than before, the Fed sent a hawkish signal, suggesting that further rate hikes may be in the future.
Data from the U.S. Department of Labor showed that core inflation rose 5.5% year-on-year in February, higher than expected. The job market remained solid, with the unemployment rate remaining low at 3.6%. Against the backdrop of persistently high inflation, the Fed believes that further rate hikes are still needed to achieve the 2% inflation target.
Investors reacted mixed to the Fed's hawkish stance. On the one hand, interest rate hikes can help control inflation expectations and inject confidence in the economy. On the other hand, excessively tight monetary policy could also lead to a hard landing, triggering a recession. The stock market saw a lot of volatility after the interest rate decision was announced.
Goldman Sachs Chief Economist Jan Hatzius said the Fed's hawkish stance was as expected, but it still needs to be closely watched for changes in inflation and employment data. He expects that the Fed may raise interest rates again in May or June, raising the interest rate range to a high of 5.25%-5.5%.
2. The European Central Bank stepped up its efforts to combat inflation, raising interest rates by 50 basis points
The eurozone economy faced severe inflationary pressures in 2022, with inflation briefly topping 10% in October last year. In order to curb the spread of inflation expectations, the European Central Bank has raised interest rates six times in a row since July last year, raising the deposit rate from a negative value of -0.5% to the current 3%.
In its latest interest rate decision on March 16, the ECB stepped up its efforts to raise interest rates by 50 basis points in a unified manner. This is the third consecutive 50 basis point rate hike by the ECB, reflecting its determination to fight inflation.
Eurostat data showed that inflation in the eurozone reached 8.5% year-on-year in February, well above the ECB's 2% target. Core inflation also climbed to 5.6%, suggesting that inflationary pressures have begun to spread across the economy.
ECB President Christine Lagarde said at a press conference that inflationary pressures remain ongoing and are expected to remain elevated for an extended period of time. Therefore, the ECB will continue to raise interest rates until inflation falls significantly. She hinted that aggressive rate hikes will continue in the coming months.
Markets have had mixed reactions to the ECB's decision. European stocks edged lower after the interest rate decision, reflecting investors' concerns about the economic outlook. However, the euro appreciated against the dollar, suggesting that the market believes that raising interest rates will help curb inflation expectations.
Commerzbank analysts said that the ECB's decision was in line with expectations, but it is still necessary to be wary of the risk of slowing economic growth. He expects the ECB to continue raising interest rates by 50 basis points in May and June, raising the deposit rate to a high of 3.5%.
3. The Bank of Japan maintained its ultra-loose policy, triggering a sharp depreciation of the yen
In stark contrast to the United States and Europe, the Bank of Japan (BOJ) decided in its interest rate decision on March 10 to maintain its ultra-loose monetary policy, keeping short-term interest rates unchanged at a low level of -0.1%. This decision triggered a sharp depreciation of the yen against the dollar.
Japan's economy slowed in 2022, with Q4 GDP growing just 0.1% year-on-year on an annualized basis, well below expectations of 1.9%. However, inflationary pressures have eased, with core inflation coming in at 3.8% year-on-year in February, down from 4.2% in January.
In view of the easing of inflationary pressures and weak economic growth, the Bank of Japan decided not to raise interest rates for the time being, and continued to implement a large-scale bond-buying program to maintain ultra-loose monetary conditions. This is in stark contrast to the austerity policies of the United States and Europe.
Bank of Japan Governor Haruhiko Kuroda said that inflationary pressures mainly come from rising prices of imported goods, and there is no sustained inflationary pressure on domestic demand. Therefore, the Bank of Japan will continue to wait patiently for inflation to stabilize at the target level of 2%.
The decision of the Bank of Japan immediately triggered a sharp depreciation of the yen against the dollar. The USD/JPY exchange rate briefly broke through the 135 mark, hitting a new high since 1998. The depreciation of the yen will further push up Japan's import costs and exacerbate inflationary pressures.
Goldman Sachs analysts said that there are risks in the decision of the Bank of Japan, which could trigger capital outflows and exacerbate the pressure on the yen to depreciate. They expect the Bank of Japan to eventually start a rate hike cycle in the first half of 2024 to prevent inflation expectations from spreading.
VI. Regulation & Policy
1. Pakistan has set up a cryptocurrency committee to regulate blockchain and digital assets
The Pakistani government has established the Pakistan Cryptocurrency Council (PCC) to oversee the integration and use of blockchain technology and digital assets in the country's financial landscape. The initiative was launched by the Ministry of Finance with the aim of developing clear regulatory guidelines for cryptocurrency adoption, partnering with international cryptocurrency and blockchain organizations, and promoting responsible innovation.
The Commission will focus on consumer protection and financial security through a sound legal and compliance framework. Finance Minister (Muhammad Aurangzeb) Mohamed Aurangzab will chair the committee, leading a diverse committee that includes senior officials from key financial and regulatory bodies. The leadership, which consists of the Governor of the State Bank of Pakistan, the Chairman of the Securities and Exchange Commission of Pakistan, and the Federal Minister of Law and Information Technology, aims to ensure a comprehensive approach to regulatory oversight, financial stability, and technological advancement.
Pakistan currently has one of the highest crypto adoption rates, with an estimated 20 million active crypto users and more than $20 billion in crypto transactions. The country's government wants to promote the orderly development of the cryptocurrency industry by establishing a regulatory framework.
Experts believe that the establishment of the committee is a sign that the Pakistani government is taking positive steps to integrate cryptocurrencies into the mainstream financial system. This move will provide greater certainty and protection for cryptocurrency businesses and investors, while also providing regulators with oversight tools. However, developing sound regulatory policies is not an easy task, and there is a trade-off between promoting innovation and maintaining financial stability.
2. ECB Governing Council Member: The United States supports crypto assets or triggers financial turmoil
François Ville de Ville de (Francois Galhau), a member of the ECB's Governing Council, said that U.S. support for cryptocurrencies and non-bank finance could trigger the next financial emergency.
In an interview with the French weekly Sunday Tribune, Gallo said: "It is possible for the United States to commit crimes through negligence. Financial crises often originate in the United States and spread to other parts of the world. By encouraging crypto assets and non-bank finance, the U.S. government is sowing the seeds of future turmoil. "
Gallo's comments reflect the ECB's concerns about the deregulation of crypto assets in the United States. In recent years, the U.S. government has taken a number of measures to support the development of cryptocurrencies, including allowing bitcoin futures trading, approving the listing of bitcoin ETFs, and more. Some argue that this could increase the risk to the financial system.
However, U.S. regulators are also stepping up regulations on crypto assets. Last year, the U.S. Securities and Exchange Commission conducted enforcement actions against a number of cryptocurrency exchanges and offerings. In March, the U.S. Senate Banking Committee passed a stablecoin regulatory bill, bringing a landmark regulatory framework to the fast-growing industry.
Gallo added that regulation in Europe is more secure and that there is no risk of a banking crisis in the EU. The ECB has been cautious and opposes excessive support for cryptoassets.
Industry insiders believe that the regulation of crypto assets is a global challenge that requires greater cooperation between governments and regulators. Overly lax or overly restrictive regulation can be detrimental. Only by formulating reasonable and coordinated regulatory policies can we truly promote the healthy development of the crypto asset industry.
3. Xinhuanet: Be wary of using AI to hype up metaverse investment scams
Xinhuanet's article "Focusing on "3.15"|Using AI to Swap Faces and Hype Metaverse Investment" pointed out that with the explosive development of AI models, many netizens have begun to use AI to assist work and life, but financial fraud has also used new "vests".
The article points out that some criminals use blockchain, virtual currency, artificial intelligence, metaverse, biotechnology, cloud farming and other concepts to weave various fraud traps and carry out online financial fraud. Under the banner of "future currency" and "high returns", they falsify trading platforms and exaggerate income data, making people mistakenly believe that investing in virtual currencies is a good business that will make sure you don't lose money. Once the funds are earned, the scammers manipulate the market, causing the value of the "currency" to plummet, or even shutting down the trading platform.
In addition, criminals also use AI face-swapping technology to impersonate well-known entrepreneurs or celebrities to promote so-called "metaverse concept stocks" in live videos to trick investors into being deceived.
Experts said that although emerging technologies such as the metaverse and AI have broad prospects, there are also large investment risks. Investors need to be vigilant and beware of falling for scams. At the same time, the regulatory authorities should also strengthen supervision and crack down on financial fraud crimes committed by using new technologies.
Industry insiders believe that the development of new technologies has added new means to traditional financial crimes, but its essence has not changed. Investors should look at emerging concepts rationally and invest cautiously. At the same time, strengthening fintech education and raising public awareness of risks is also a key part of preventing such frauds.