Market Recap: BTC, ETH Rise as India Embraces Crypto – Blockworks

  • India has reversed its stance on cryptocurrency and now seeks to regulate the industry and introduce its own digital rupee
  • Cryptos and stocks continue higher as investors begin to price in the coming tightening of monetary policy

India embraces crypto

After years of uncertainty surrounding its stance on the crypto industry, India’s Finance Minister Nirmala Sitharaman said Tuesday that the country will not seek to ban the asset class and will instead regulate and tax it at 30%.

Sitharaman also said India plans to introduce a digital rupee as soon as April 1 of this year.

Separately in Russia, Putin clarified his country’s position on cryptocurrency. Sources familiar with the matter told Bloomberg that the government would seek to regulate and tax the mining of cryptocurrencies rather than banning the practice outright.

The embrace of digital assets among larger nations is positively impacting the price of bitcoin and other cryptocurrencies after early January sell-offs. Bitcoin’s rough start in January saw it drop by nearly 30%. Since then, it has climbed almost 15%. Ethereum experienced an even more volatile January, dropping as much as 40%. It has since climbed back 22.81%.

Investors price in new Fed policy

The January sell-off of both the crypto market and equities can largely be attributed to fear among investors about the Fed’s tightening of monetary policy. Increases in interest rates and fewer asset purchases by the Fed have historically been followed by market downturns.

The possibility that the sell-off in January can be attributed to investors’ pricing in the coming Fed monetary policy changes may be growing as we see the markets begin to fight back. At the tail end of January, the S&P 500 climbed 6.27% and the Nasdaq climbed 7.36% from their mid-month lows.

Top stories

Story: Castle Island Ventures Raises Hundreds of Millions For New Fund

  • The firm is expected to finalize its fundraise in the next couple of weeks, sources said.
  • Castle Island has previously hit on winning VC stakes in companies including Bitwise and BlockFolio.

Story: Four Ex-Facebook Developers Join Forces to Build Future of Web3

  • “We have high conviction that we made the right move,” Cheng said.
  • Since leaving, the co-founders had “technical breakthroughs” that Cheng says they wouldn’t have had if they stayed at Meta.

Story: 21Shares Aims to Have ETPs for Top 50 ‘Quality Assets’ by End of 2022

  • 21Shares manages more than $2 billion in 26 cryptocurrency ETPs and 87 listings across 10 European and Swiss exchanges.
  • The firm plans to feature dozens more cryptocurrencies in ETPs by year-end.

Story: ConsenSys Acquires Open Source Ethereum Wallet to Expand MetaMask

  • MetaMask will soon support desktop, mobile, extension and browser wallets.
  • MyCrypto is an Ethereum wallet integrated with web browsers and desktops.

Earnings season

Today’s earnings reports from Alphabet, PayPal and MicroStrategy have the potential to impact the cryptocurrency market. Tomorrow, Meta (formerly Facebook) will report earnings while Amazon reports on Thursday.

Going forward

With both India and Russia signaling that they will not ban cryptocurrency and major companies piling into the industry, a disconnect has formed between markets and the narrative of digital asset adoption. This trend is likely due to the fact that cryptocurrency has become correlated with the traditional equities market. It’s unclear how long this correlation will remain and how much effect Fed policy will have on crypto markets going forward.

Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.

  • Editor, Evergreen Content

    As Editor of Evergreen Content at Blockworks, Luke Conway oversees the creation of comprehensive educational guides on all things crypto to help users navigate the space. Before Blockworks he worked as an associate editor for Investopedia, managing broker reviews and a cryptocurrency news desk.

Leave a comment

Your email address will not be published. Required fields are marked *