Welcome to the second edition of Shrimpy’s brand new newsletter, a place for staying up to date on the latest trends, news, and events in the cryptocurrency industry.

Digital assets evolve and move faster compared to any other market. For those who do not have time to constantly scroll Crypto Twitter, we wrote a special weekly update that covers everything major that happened this week.

Summary

Bitcoin failed to breach resistance at $52k and fell to $46.3k after Fed Chairman Jerome Powell shared bearish news
Ethereum core developers have agreed to integrate the EIP-1559 proposal into July's London hard fork
Bybit has decided to cease its operations in the UK in reaction to FCA's crypto derivatives ban
MicroStrategy invested another $10M in Bitcoin
The DeFi community faced two major exploits
Andre Cronje decided to end the partnership between Yearn Finance and Cover Protocol
Ripple will pilot a private CBDC blockchain network
Binance’s CZ announced new marketplace controls following Polkadot’s flash crash

Powell’s concerns over financial conditions tumble both stocks and crypto

Federal Reserve Chairman Jerome Powell marked this week’s most striking event. After acknowledging the lack of stability in the bond market and the U.S.being far from an economic recovery, the stock market started a sell-off that impacted cryptocurrencies as well.

During his speech on Thursday, Powell’s bearish comments resulted in a 4% dip for Bitcoin. Despite the fact that the leading crypto asset could indeed act as an inflation hedge in the future, the market has decided that a temporary correction is overdue. Cryptocurrencies have slightly recovered after only a day, but a cloud of doubt still floats above our shoulders.

Ethereum confirms EIP-1559 for July

Ethereum core developers announced on Friday that the project would launch an Ethereum Improvement Proposal (EIP-1559) in July that will shift the blockchain’s fee system. Once implemented, users will have the chance to transact on a network with lighter congestion, aided by a fixed-per-block network fee.

EIP-1559 is planned to become a part of the London hard fork package that launches this summer, despite the fact that miners heavily oppose the idea. Blockchain validators are discontented since the upgrade has severe implications on rewards.

A group of miners holding control over half of the network could theoretically launch a 51% attack to prevent the decision. However, experts do not expect the potential event to be highly unlikely.

Bybit suspends UK operations after FCA regulations

A ban on crypto derivatives made by UK’s chief regulatory authority, the FCA, led to Bybit suspending its operation in the country. A blog post released on Friday revealed that the Singapore-based exchange would no longer provide its services to UK citizens, urging them to close all positions and withdraw their assets by the end of March.

Starting from April, UK-based customers will be restricted from accessing and trading on the platform. As a reminder, the Financial Conduct Authority’s decision came into effect on January 6 this year.

Michael Saylor buys $10 million worth of BTC

Saylor’s software firm MicroStrategy decided to once again invest in Bitcoin, this time buying only $10 million worth of BTC following a dip on Thursday. Michael Saylor announced that the company bought 205 BTC for $10 million at an average price of $48,888.

Since the last purchase, MicroStrategy owns a total of 91,064 BTC. With an average overall purchase price of $24,119, Saylor still sits in profits given that Bitcoin currently costs $49,000. The bad news? MicroStrategy’s stock price fell by 50% since making a new all-time high

Ripple to power a CBDC blockchain network

Ripple will pilot a private ledger for issuing central bank digital currencies with the same blockchain technology that the XRP ledger uses. Ripple revealed in a blog post on Wednesday that the so-called CBDC Private Ledger will be used for both issuing CBDCs and processing payments.

The main objective of the new blockchain network is to transfer money at low costs and at a level of scalability that supports standard central bank demand, while simultaneously upholding a high degree of security.

Three DeFi dramas unfold

1. Yearn Finance ends partnership with Cover Protocol. Andre Cronje announced on Twitter that Yearn Finance and Cover Protocol, who have merged last year, will split ways. Cronje gave no specific reasons for why the partnership broke up and ended up deleting the tweet.

Cronje specifically stated: “I personally find it sad. I had very high regard, trust, and faith in the Cover Team. Lesson learned. Won’t trust them again.”
After deleting the earlier tweet, Cronje stated that it was an emotional response and that he forgot that ‘ethics and money don’t mix.’

2. DeFi protocol Paid Network lost $37 million in an exploit. Polkadot-based DeFi platform Paid Network was attacked by a hacker this week who exploited the project’s token minting smart contract, stealing 60 million PAID tokens.

The crypto community is uncertain whether the exploit is part of a rug pull event or a serious exploit by an anonymous individual.
PAID dropped more than 70% after the hack occurred.

3. Meerkat Finance loses $31 million worth of assets. A project on the Binance Smart Chain lost $31 million in crypto assets only one day after launching. The team claims that an outsider drained the project’s vaults.

On-chain data implies that an original Meerkat deployed account interacted with the exploited smart contract.
Binance announced that it would freeze the assets if they flow into the exchange.

BitMEX Founder Arthur Hayes will surrender to the U.S. next month?

All main executives of the cryptocurrency exchange BitMEX were caught in a legal chokehold with the CFTC in October 2020. After half a year, the exchange’s former CEO Arthur Hayes may surrender to U.S. authorities next month, according to a statement made by a federal prosecutor.

Based on a court transcript that dates to February 16, Hayes is located in Singapore. If willing, he could voluntarily surrender to the U.S in the coming months. An assistant U.S. attorney for the Southern District of New York told the court that Hayes proposed to have his initial appearance in Hawaii, after which he would legally surrender in New York.

Binance will reconsider marketplace controls following the Polkadot Flash Crash

On Friday morning, a Polkadot (DOT) whale set a sell order that sent prices from $33 to 25 cents in mere seconds. The event occurred on Binance’s DOT/USD trading pair, which prompted the exchange’s CEO Changpeng Zhao to consider new marketplace controls.

The exact measures to be implemented remain unknown. However, Zhao noted that Binance would attempt to prevent similar future events by controlling stop market order sizes. Will it be enough to combat a serious bidding imbalance?

Quote of the week

The Good News

The popularity of non-fungible tokens spiked after crypto investors bought a famous Banksy Piece and burned it, only to issue an NFT version of it.
PayPal will further entrench itself into the crypto space by acquiring Curv, a tech firm that provides digital asset custody services.
Goldman Sachs reports that 40% of its clients have crypto exposure.

The Bad News

A recent survey by JPMorgan showed that 78% of its institutional investors do not plan to invest in crypto.
Former CFTC Commissioner Heath Tarbert, a crypto-friendly regulator, will leave the leading U.S. regulatory agency today.
A set of AML laws proposed by the former Trump administration could have a negative impact on Bitcoin’s price if President Biden passes the legislation.

Crypto Twitter Highlights

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