Good morning Here’s what happens:
Prices: Crypto and Asian stock markets opened strong as the White House announced an agreement to avert a debt crisis, with Bitcoin and Ether posting gains of 5% and 4.9%, respectively.
Insights: China didn’t say much new about Web3 in a paper released over the weekend, but the report represents progress in a country that has scaled back its approach to cryptocurrencies.
Crypto starts the Asian trading day well in the green after the White House announced it had reached an agreement to avert a debt crisis.
Bitcoin starts the Asian trading day up 5% to $28,249, while Ether is up 4.9% to $1,917. Overall, the CoinDesk Market Index (CMI) is up 4% to 1,209.
Bitcoin is still down 2.8% over the past month as the looming debt ceiling crisis weighed heavily on the asset class.
“Bitcoin found support around $25,000 and consolidated for about two weeks before rallying today,” wrote Joe DiPasquale, CEO of crypto fund manager BitBull Capital, in an email. “Whether this move will sustain to $30,000 remains to be seen, but we expect the market leader to retest this key resistance in the near future.”
DiPasquale added, “On the upside, the $22,000-$25,000 range is acting as reliable support for bulls.”
House Speaker Kevin McCarthy told reporters over the weekend that there is still work to be done on the bill and it is expected to be completed by Sunday and voted on by Wednesday.
Meanwhile, President Biden said in a statement the deal was “an important step forward,” calling it a compromise.
Stock markets in Asia also open strongly on this news. In Japan, the Nikkei 225 is up 2% in the first 30 minutes of trading, while Australia’s ASX 200 is up 1.18%.
China’s Web3 is not our Web3
Over the weekend, authorities at the Beijing Municipal Science & Technology Commission, which oversees Zhongguancun Chaoyang Park — a cluster of China’s leading technology companies and academic institutions — released a white paper proposing China’s Web3 policy.
On Crypto Twitter, this excited the usual crowd, spurred by a tweet from Binance CEO Changpeng Zhao, who said the timing was “interesting” considering Hong Kong’s crypto regulatory framework will soon be rolled out on June 1.
The reality, however, is that this white paper is more a reflection of China’s existing policy of backing blockchain rather than cryptocurrency.
Web3 in China means an internet enhanced by artificial intelligence, blockchain, faster computer chips and more resilient networks.
The white paper is more interested in defining and enhancing the layers of infrastructure behind the Internet, which it identifies as infrastructure layer, interactive terminal layer, platform tools layer and application layer, in a way reminiscent of the Open Systems Interconnection (OSI) ) model of network layers, which has been the bible of network topology since the 1980s.
And that’s by no means a bad thing. It might be time to update our understanding of a network layer to accommodate emerging technologies, and China is keen to write the next generation of tech standards to wrest that from a US-led western tech trading bloc.
But this has nothing to do with crypto.
Proponents of the China narrative say mainland China is just a few steps behind Hong Kong in opening its doors to crypto trading, just as it sought lessons in the stock markets in the semi-autonomous territory before opening its own. This could be the case now, but until then, much remains to be clarified, such as how to enable crypto trading without clashing with mainland China’s capital control rules.
However, that is the topic for another day. Meanwhile, China isn’t adopting cryptocurrencies – yet.
Digital Currency Group (DCG), CoinDesk’s parent company, shut down its trade settlement and prime brokerage services unit, TradeBlock, citing the crypto winter and regulatory uncertainties. Gerber Kawasaki Director of Get Invested Brett Sifling shared his analysis of the crypto markets. Additionally, Columbia Business School associate professor Austin Campbell discussed the state of stablecoin regulation in the US, and Ari Redbord, head of legal and government affairs at TRM Labs, explained why crypto hacks slumped in the first three months of the year decreased significantly in 2023.
UPDATE (May 29, 2023 1:10 UTC): Joe DiPasquale adds a comment.
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